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Slower Direct Mail Growth Predicted Overall as Interest Rates Rise, Despite Strong First Half Showing
Chicago (September 7, 2006)- Consumers have received more credit card direct mail for the first half of this year than in 2005, according to Mintel Comperemedia, a competitive intelligence service that analyzes direct mail and print media. The service estimates that close to 4.2 billion direct mail pieces were distributed to U.S. consumers during the first half of 2006. This is significantly higher than last years estimates, which reached close to 3.9 billion pieces during the same time period. The mailings include acquisition, cross-selling, and follow-up mailings.
The top mailers remained the same as last year, with Chase, Capital One Bank, American Express, Citibank and HSBC leading in direct mail distribution. Chase and Citibank have both shown decreased direct mail activity in the credit card sector by 7 and 8 percent respectively for the same first half-year period from 2005 to this year. American Express experienced a 20 percent bump in direct mail activity during the same period, primarily due to their new cards and offerings.
"Credit card distributors are doing more targeted marketing initiatives," said Jenny Roock, director of Comperemedia research. "As interest rates continue to rise, companies are going to have to really work hard to attract consumers to their offers. Comperemedia data shows that offers have increased for homeowners, while they have decreased for renters. This can be attributed to the fact that more homeowners are now using credit cards as extended lines of home credit, as opposed to applying for home equity lines of credit."
Bank of America remained in the bottom half of the top 10 mailers, experiencing a 43 percent drop in its direct mail activity from the same point last year due to its merger with MBNA. MBNA experienced a 17 percent upswing in direct mail activity. The top 10 company that experienced the biggest direct mail distribution increase, comparing the first half of 2005 to the same period this year, was Juniper Bank, with a 76 percent difference.
Despite a strong showing in the first half of the year, there is a strong possibility that direct mail activity will decrease. As companies review their targeting efforts, this remains to be seen by the industry.
"Were going to see a slowdown with the economy, which will impact the credit card industry," said Roock. "Although were seeing card offers grow, they are not growing as fast this year. Home equity lines are not as attractive as they were, due to rising interest rates."
Mintel Comperemedia provides competitive intelligence for businesses looking to advance and improve their direct marketing strategy. Tracking direct marketing (including mail, email and print advertising) targeted at consumers, small businesses and insurance agents, Mintel Comperemedia offers a unique perspective on everything from banking trends to insurance trends to credit card statistics. For more than 38 years, Mintel has provided insight into key worldwide trends, leading the industry for consumer, product and media intelligence.
Joanna Peot
Public Relations Executive
312-628-7946
jpeot@mintel.com