Mobile Ad Dollars Will Top Direct Mail Spending in Local Media for the First Time

Up until next year, direct mail advertising will have attracted the lion’s share of local ad budgets. But those days appear to be gone forever, according to BIA/Kelsey’s 2022 local media expenditures forecast. Marketers will put $34 billion into local mobile advertising in 2022, local media researcher BIA predicts. That gives it a 21% share of the total $161.5 billion expected to be spent on local efforts next year. In contrast, direct mail will hold a 20.7 percent share with $33.4 billion. The other three largest local media categories in BIA’s report are PC/laptop ads (17.1%, or $27.5 billion), local TV (13%; $21 billion) and local radio (7.9%; $12.7 billion). “Our direct mail estimates are comprehensive, capturing all direct mail spend in the U.S.,” a BIA rep told Adweek, when asked to compare national trendlines for local mobile and direct mail. “And all of it is considered local.” The gravitational pull of Google and Facebook For app and smartphone browser-based ads, however, there is a national mobile component that BIA estimates separately, though it does not publicly break out those details. If that national spend were added on top of local mobile, the company’s rep said, together that combined mobile outlay would surpass direct mail now even more significantly than local mobile alone. In that sense, the local breakout reflects the larger trend toward mobile ad spending, which is primarily due to gravitational pull on online marketing dollars by Facebook and Google. Foursquare and Clear Channel Outdoor Partner to Advance Cross-Platform DOOH Measurement In general, BIA estimates that digital ad spending hit $76.8 billion in 2022, with Google and Facebook controlling over half of those media expenditures. Google takes the bulk of it at $26.8 billion, compared with Facebook’s $14.3 billion. “For a long time, we’ve been talking about direct mail as the king of the share of wallet in local ad spending,” said Rick Ducey, managing director of BIA Advisory Services. “This coming year, for the first time, we pass the crown over to mobile, as its momentum drives it to be the biggest overall piece of the spending wallet—and we expect that to continue in the foreseeable future.” Ducey cited four reasons mobile has become the number one advertising medium: --Covid-19’s impact on consumer’s increased time spent with mobile and other digital media making digital the place to find and target consumers -- Digital’s overall momentum in winning more revenue share of media time from traditional media -- The rise of virtual consumer channels like delivery, curbside pickup and ecommerce in top categories like retail, restaurants and CPG where physical channels like retail store visits decline -- Greater consumer acceptance and use of virtual and ecommerce channels National and local, or 'apples and oranges' As a standalone ad category, direct mail can be seen as a declining force. But as an integrated marketing channel, direct marketing is still seen as a valuable component by brands, particularly when it comes to finance services, insurance, real estate, education and politics. For direct mail specialists, the shrinking of its slice of the ad spend pie is not a surprise. As with most things right now, the change in the category’s fortunes has only been accelerated by the upheaval of the past year-and-a-half. To put the direct mail industry’s travails in further context, last year, GroupM estimated that direct mail would generate around $13 billion in revenue during 2020 for a fall of 26%. The WPP Group media intelligence unit has forecast a partial rebound in 2021, with 17% growth before resuming single-digit declines. Ultimately, discerning between local and national when it comes to ad spending trends on mobile and direct mail is beside the point. Definitions matter, noted Brian Wieser, global president, business intelligence at GroupM, told Adweek, “as it’s otherwise apples and oranges here.” As Events and Meetings Go Hybrid, Can Real-Time Sentiment Analysis Help ‘Read’ the Room? A 'victim of trends' Wieser strongly argued that a distinction between mobile and non-mobile digital advertising is practically meaningless. Most advertising that appears on mobile devices is digital advertising bought from a media owner independent of what device it runs on. Digital more generally has been growing as the marketers, whose businesses are built around digital environments, are increasingly important components of the wider marketplace where consumers and advertisers connect, he said. “Direct mail, if we’re talking about traditional home-delivered direct mail, has generally been declining by single digits annually, excluding the effects of the pandemic,” Wieser explained told Adweek. “It’s a victim of the trends impacting the businesses who have historically been predisposed to use direct mail—which are typically locally-oriented or geographically constrained marketers, whose businesses are losing share of the overall economy.”