Suppliers have lowered their prices in response to the recessionary fallout, a highly fragmented market and the rising popularity of digital advertising alternatives.
Los Angeles, CA (PRWEB) May 05, 2014
Direct Mail Advertising Services have a buyer power score of 4.4 out of 5. “This score reflects strong negotiating power for buyers,” says IBISWorld procurement analyst Andrew Rebhan. Prices for direct mail advertising services have declined over the past three years as companies struggled to recover from the recessionary fallout and digital advertising solutions grew in popularity. Nevertheless, strengthening corporate profit levels are encouraging businesses to increase their advertising expenditure once again, which will boost prices for direct mail services higher in the three years to 2016. Although buyers will not benefit from the forecast rise in prices, this market will continue to experience low price volatility, which has reduced the likelihood of large price swings.
Buyers currently benefit from a low level of market share concentration, which gives them a greater range of vendors to choose from for their advertising campaigns. “The highly fragmented market has encouraged more price-based competition, which has made it difficult for suppliers to maintain strong profit margins,” says Rebhan. Furthermore, the emergence of digital and online advertising has only heightened the competitive environment. This tough competition has encouraged a trend of consolidation among market suppliers in an effort to regain financial stability and better control over pricing. Prices for direct mail advertising services will begin to rise as more vendors start to merge with digital advertising firms to offer integrated marketing solutions. Major vendors include Valassis Communications Inc., Harte-Hanks Inc., Quad/Graphics Inc. and Cenveo Inc.
Although digital alternatives have greatly impacted the overall advertising market, traditional direct mail still remains an effective tool to reach downstream clients due to its targeted and measurable approach. Although buyers may encounter high costs for mailing lists and postage, particularly when they send out large quantities of mail, this advertising method is generally cost-efficient. Buyers will also benefit from other purchasing factors, such as the low level of specialization, short buying lead time and high number of substitute services.
For more information, visit IBISWorld’s Direct Mail Advertising Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of direct mail advertising services. Suppliers providing these services assist buyers by designing advertising campaigns for the sake of distributing marketing materials directly to targeted customers through postal mail. Services typically consist of material concept development, art design, printing, labeling and addressing. Advertising goods may consist of postcards, flyers, catalogs or other commercial merchandising materials. Some market vendors may also compile and manage mailing lists for buyers. This report does not include print distribution services or digital advertising services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.