In the next five years, money spent annually on direct mail will decline by as much as 40%, from $49.7 billion in 2008 to $29.8 billion in 2013. At least, that’s the dire prediction of a new study just published in a report by research firm Borrell Associates.

“Direct mail has begun spiraling into what we believe is a precipitous decline from which it will never fully recover," said Borrell. But email advertising continues to surge and is now the number one online ad category.

Frogloop wrote about the seeming decline of direct mail in February due to rising costs and the fact that direct mail appeals largely to an aging demographic. The younger generation seems to prefer to donate online, rather than through the mail. Furthermore, many people view direct mail as “junk mail.” Accordingly, 12 states are developing laws to ban or limit “junk mail” despite strenuous efforts by the Direct Marketing Association and others to fight such legislation.

“Direct mail is not just simply annoying,” said Corinne Ball, Online Communications Specialist for environmental group Forest Ethics and manages the Do Not Mail campaign. “The environmental impact of direct mail is huge, with 100 million trees logged each year to make junk mail. Even though the vast majority of Americans don't want it, 30% of all the mail delivered in the world is U.S. junk mail,” Ball said.

Forest Ethics speaks with authority on such topics. The group’s grassroots campaigns have forced several paper manufacturers, office supply chains and retail catalog companies (who can forget Forest Ethics’ “Victoria’s Dirty Secret” campaign from a few years ago?) to dramatically increase their use of recycled paper content.

But the impact on the environment from direct mail actually goes far beyond the number of trees cut down. The U.S. Environmental Protection Agency estimates that 4 million pounds of direct mail is thrown away annually, with less than one-third of it recaptured through recycling. All told, an average of only 2.8 percent of direct mail pieces sent to consumers each year succeeds at producing a response, so direct mailers have to send out about 36 pieces of mail for every one response that they get back.

Forest Ethics has stopped using direct mail entirely, in favor of communicating with their members online.
“When we decided to completely stop using direct mailing, it was in response to our supporters,” said Ball. “More and more, our supporters who had traditionally donated through the mail started making online contributions,” said Ball. This online approach also has provided the benefit of increased speed and agility, she added. “Moving to an online fundraising structure allows us to move quickly and react to campaign needs in a way that direct mail never could.”

In contrast, NARAL Pro-Choice America continues to use direct mail to fundraise, but has noted a decline in its effectiveness lately. “There is no question that it is down for most organizations. The economy is hitting most of us pretty hard in all channels,” said Jennifer Donahue, Deputy Director of Membership and Development for NARAL.

But at the same time, direct mail is continuing to raise money for her organization, Donahue added. “For all our online donors, only one-third give a subsequent gift online,” said Donahue. “The other two thirds give via the mail and phones. It really is an integrated approach that continues to drive our revenue. That being said, I don't know what form direct mail will take in the future.”

The typical donor to nonprofits is 65+ years old and still gives via the mail, so it’s not surprising that many nonprofits are not giving up on their direct mail programs, despite talk about the coming death of direct mail. “Good marketers know -- or are trying hard to figure out -- how to manage their marketing mix for the best result,” said Karin Kirchoff, Vice President for Membership for Defenders of Wildlife. “That includes sending direct mail to drive traffic online, as well as sending direct mail to get a response in the mail, and sending email to reinforce an offline message,” Kirchoff said.

So what’s the verdict? Is direct mail headed quickly for the dustbin of history? Or is news of its imminent death – to borrow from Mark Twain -- “greatly exaggerated?”

Regardless of whether the dire predictions of direct mail’s speedy demise prove true, it seems vital for nonprofits to start preparing now for a younger generation of donors who strongly prefer the online medium -- not the mail -- for managing their lives, including for donating money to their favorite organizations. Furthermore, as more states propose laws that would ban or restrict “junk mail,” it’s essential for organizations to immediately start building a strong online fundraising program and to work on growing their base of online supporters.

What do you think? Does direct mail fundraising still work well for your organization? With all donor age groups? Are you detecting a decline in direct mail’s effectiveness, above and beyond the recent economic downturn? Is there a debate in your organization about cutting back on direct mail because of its negative impact on the environment? Let us know!

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