The letters we love

Net advertising revenue in Switzerland is stagnating. According to the latest advertising statistics, direct marketing generated net revenue of 747 million francs last year. This means that nearly 18 percent of Swiss advertising spending falls into this category. Only promotional items, with revenue of 875 million Swiss francs, surpass direct mail or direct marketing (DM). Press, online, and TV advertising follow in third, fourth, and fifth place, respectively. The 747 million generated through DM is divided between unaddressed and addressed mailings. In 2023, 62 percent of advertising mailings were unaddressed. However, all these brochures and flyers in our mailboxes accounted for only 22 percent of net revenue. The lion’s share—namely 78 percent of the 747 million—came from addressed mailings. This was despite the fact that their volume accounted for «only» 38 percent.

«Targeted advertising will become even more effective in the future because it will reach target audiences more precisely.»

Even though advertising revenue from direct marketing declined by nearly six percent last year, «physical» dialogue marketing still has its place, according to Christian Huldi, president of the Swiss Dialogue Marketing Association (SDV). The expert highlights the importance of customer centricity and customer relationship management, which cannot be successfully implemented without «dialogue.» «The importance of these topics is growing rapidly.» For Huldi, one thing is clear—companies must do more and more in this area, because a successful customer journey cannot be achieved without direct marketing.

The barrier at the mailboxes

As the NZZ recently reported, the percentage of mailboxes with «No Advertising» stickers is increasing by about 1.3 percent each year. According to Swiss Post, approximately 1.7 million Swiss households currently do not have a «No Advertising» sticker on their mailbox. As Daniel Schönmann, Head of Advertising Research and Communication at Swiss Post, notes, the proportion of mailboxes with «No Advertising» stickers—around 45 percent—is significantly lower in rural areas than in larger metropolitan areas, where about 55 percent of mailboxes have such a sticker. In Switzerland’s major cities, however, about 70 percent of mailboxes had a «No Unsolicited Advertising» sign last December. According to Schönmann, it is important to note that the number of “No Unsolicited Advertising” signs refers to mailboxes and not to people. This reach would therefore differ from the advertising reach. “In a single-person household, the notice has a different impact on reach than it does in an extended family,” says the marketing expert.

Advertising reach is reflected in the MACH Strategy published by WEMF AG for Advertising Media Research. According to the latest MACH Strategy, 55 percent of the Swiss resident population aged 14 and older does not have a «No Junk Mail» sticker. When considering regular users, unaddressed direct mail achieves a reach of 46 percent. For addressed direct mail, the figure is as high as 56 percent. «Direct mail therefore remains one of the media formats with the widest reach in Switzerland,» emphasizes Daniel Schönmann. Cost-conscious industries in particular—such as retailers and nonprofit organizations, which pay close attention to return on investment (ROI) when selecting their media mix—rely heavily on physical mailings. The coffee specialist Tchibo Switzerland, for example, which has been on the market here for over 20 years, has worked with magazines and brochures from the very beginning. «We send out a catalog every month, which has a direct impact on the success of our online channel,» explains Eva Wasser, Senior Manager of CRM & Communications at Tchibo Switzerland. The catalog focuses exclusively on presenting the products, although the selection online is considerably larger than in the stores. Sales generated through direct mail are measurable and can be clearly linked to this marketing measure. Tchibo (Switzerland), headquartered in Wallisellen, employs around 340 people and has operated its own stores, distribution centers with major retailers, and its own national online store since 2001. As an owner-managed company, Tchibo does not disclose specific figures: “What I can say is that we continue to believe in the brick-and-mortar channel and regularly serve it with a relatively large volume of sales,” explains Wasser.

«The Swiss Direct Marketing Association maintains a very active exchange with direct marketing associations in the DACH region.»

Tchibo Switzerland evaluates the success of every mailing. Thanks to targeted selection, all direct marketing campaigns break even within two weeks of being sent out and generate significant sales. For the company, which was founded in Hamburg in 1949, 360-degree communication is a given and has become indispensable.

The Future of Direct and Dialog Marketing

The trend toward «No Advertising» stickers is on the rise. A study by Ipsos Switzerland commissioned by Swiss Post concludes that those who do not have a «No Advertising» sticker are making a conscious choice not to have one. Such individuals therefore wish to receive direct mail. Precisely because of this conscious decision to receive unaddressed mail, Swiss Post expects that the proportion of mailboxes without a «No Advertising» sticker will gradually stabilize. According to Dr. Christian Huldi, an expert in customer relations and customer experience, a personal and individualized approach remains indispensable. He also notes that, both today and in the future, there will be industries and companies for which direct mail will continue to be a worthwhile investment. Huldi is 100 percent convinced that dialogue marketing will survive—«including the physical kind»! As an example, the SDV president cites the «revival» of physical customer magazines in many industries. “In my opinion, this is linked to the oversaturation of email newsletters.” The Zurich native, who brings 30 years of industry experience to the table, therefore recommends direct marketing to all companies. He sees great potential especially in the B2B sector: “As soon as a company relies on CRM, it won’t work without dialogue marketing.” Christian Huldi also specifically recommends dialogue marketing to startups, due to the quick and easy scalability and measurability of ROI, as well as their limited budgets.

A More Personalized Approach Thanks to AI

The use of artificial intelligence will benefit DM. This is because, according to Frank Hannich of the Zurich University of Applied Sciences, AI will make it much more efficient to tailor communications based on customer data and customer responses. «This will reinforce the trend away from mass marketing toward personalized communication, thereby also increasing the appeal and affordability of dialogue marketing,» says the head of the Customer Management & E-Commerce Department at ZHAW. Professor Hannich also sees the expected flood of digital messages produced using generative artificial intelligence as an opportunity for physical mailings: «Physical mailings will stand out as a result and are more likely to be perceived by customers as thoughtful and personal.» Daniel Schönmann of Post Advertising echoes this sentiment: «Addressed advertising will become even more effective and important in the future because target groups can be addressed in an increasingly data-driven and thus more targeted manner.» Through this targeting, physical advertising catches up with online advertising in a key area while retaining its advantage in terms of attention and impact. This is because direct marketing always appeals to multiple senses at once.

The Decline in Unaddressed Advertising

If you take a closer look at the latest figures from the Swiss Advertising Statistics Foundation, you’ll see that unaddressed direct mail declined slightly more sharply last year than addressed mailbox advertising. From Post Advertising’s perspective, this can be explained by two special factors: First, some major advertising clients are no longer distributing their brochures in mailboxes but instead as inserts in the print media of their parent companies, namely the Coop newspaper and the Migros Magazine. These volumes are therefore still present but are not captured in the direct mail statistics. Second, there were several bankruptcies among previous advertising clients in the mail-order sector in 2023.

A Look at the DACH Region

Direct marketing is a major topic throughout the DACH region. In Germany, direct marketing figures are compiled annually in the «DM-Monitor.» The latest edition of the Monitor shows that four out of ten companies have recently increased their dialogue marketing budget. However, direct marketing is defined slightly differently in this study. According to Christian Huldi, owner of DataCrea, it’s important to note that in Switzerland, due to the smaller market, customer retention is much more important than customer acquisition. The Swiss Dialog Marketing Association maintains very close ties with the DM associations in the DACH region. The associations are currently working on a new and appropriate definition of dialog marketing. «We want to convey that dialog marketing is indispensable for modern, digital marketing as well as for CRM and CEM.»