Direct-mail sector staying the course

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For the direct-mail industry, Sept. 11 was just the beginning. Within weeks of the attacks, the $582 billion industry faced another, potentially greater threat: anthrax.

Despite initial public fears about bioterrorism, most direct-marketing experts predicted anthrax would be a short-lived obstacle. The Direct Marketing Association, which revised fourth-quarter expenditures and sales downward after the attacks on the World Trade Center, did not further reduce estimates after the anthrax scare; DMA President H. Robert Wientzen anticipated the bioterrorism threat would subside within a week or two and not have a long-term negative effect on the industry.

"I guess I could feel a little smug about that view, because indeed that has turned out to be the case," Mr. Wientzen said.

Marketers spent $46.5 billion on direct mail last year, and the DMA expects expenditures to increase 5.6% to $49.1 billion in 2002. Sales generated from direct mail are expected to rise to $636.7 billion this year, up 9.4%.

David Sable, president of Wunderman, New York, a unit of WPP Group's Young & Rubicam, has seen no changes in clients' direct-marketing programs, nor did he expect any. "It didn't really affect our business. My mailbox is still full."

Devon Direct Euro RSCG, anticipating the anthrax threat could linger and concerned that some corporations were shutting down mail-room operations, scrambled to launch a non-proprietary Web site to help recipients check the legitimacy of packages. But the Havas Advertising-owned agency shut down the quickly as it built it, because authorities revealed the possibility of spreading anthrax through the air and via postal sorting machines.

But six months later, Devon, like most agencies, has not witnessed any fallout. "My clients are continuing to move forward on all fronts," said Ron Greene, president-CEO of Devon.

What has led to cutbacks is rising postal rates. The lingering threat of terrorism has required the already-struggling U.S. Postal Service to shell out money to increase manpower and security, concerning already cost-conscious direct marketers. Rising rates have made direct mail cost-prohibitive for some smaller companies. Mail volume is down 5%, according to Mr. Wientzen.

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