As part of our continuing interest in predicting the future, we were intrigued by the recent USPS Office of the Inspector General’s report outlining five different bulk mail growth scenarios for the coming decade.
Perhaps not surprisingly, the predictions in Advertising Mail: Future Prospects in Five Scenarios cover the spectrum from tremendous growth to massive decline. Starting from 2015’s base of 80 billion bulk mail pieces, the projections for bulk mail volume in 2025 range from 119 billion pieces (+49%) to 53 billion pieces (-34%).
This range is, unfortunately, so broad as to be essentially worthless. So let’s dig into the underlying assumptions and come up with our own prediction.
The first factor we need to consider is how quickly total U.S. advertising spending will increase between now and 2025. As the following chart from the Advertising Mail report shows, total advertising spending in the U.S. has grown consistently since 1991 with the exception of the period during the 2007-2009 Great Recession:
Interestingly, total advertising spending has grown more slowly in the last 5 years than in the pre-recession years.
The biggest change during the last 25 years has been in how these advertising dollars have been spent. Internet-based advertising (search, email, social media, banner ads, mobile & digital video) has grown from essentially zero in 1990 to account for 29% of all U.S. advertising spending in 2015:
Source: Advertising Mail: Future Prospects in 5 Scenarios
While Internet advertising exploded, the share of U.S. advertising dollars spent on newspaper and magazine advertising plummeted by 77% and 55%, respectively. Interestingly, throughout this 25-year period of massive change, direct mail’s share of total U.S. advertising spending consistently remained between 10% and 12%.
If we assume that total U.S. advertising spending continues its current slower 2.5% annual growth rate between now and 2025 and that direct mail maintains its 11% share of all advertising, 2025 bulk mail volume would be about 102 billion pieces, an increase of 28% over 2015.
So that’s our prediction. What do you think is going to happen in the next decade?
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