In the brave new digital world of the 21st century, you might think that the direct marketing companies of yesteryear are a dying breed. Not so! Yes, they’ve had to change with the times, but direct marketing (including direct mail) is still the second-largest ad medium in the U.S. and is a $46 billion industry. Entrepreneurs who want a piece of the action have a surprisingly solid short-list with these top 5 advertising services franchises of 2019.
Even though more and more of life seems to be taking place online, everyone still gets their mail every day and looks through it. Direct snail-mail generates response rates as high as 5.1%, whereas most digital ads see a response rate of under 1%. And don’t forget that consumers also redeem as many as 3 billion coupons every year.
This is all to say that even while direct marketing has changed a lot in recent years, its core components are still going strong. However, it’s worth noting that whereas last year all five of the companies on this list were ranked on Entrepreneur magazine’s Franchise 500 list, only two are ranked this year.
Here are the 5 best advertising services franchises of 2019:
1. Money Mailer
Money Mailer bills its franchisees as “small business advertising consultants” focused on helping small businesses with effective marketing in their local communities. The company achieves this through a combination of targeted advertising by mail and online, on mobile devices, and through social media.
Direct mail forms a primary pillar of the business, and Money Mailer sent 7 billion coupons to consumers in 2016. In fact, the online, mobile, and social media pieces of the marketing puzzle are seen as strategies to extend the reach of the direct mail component.
The direct mail serves up hyper-local offers to affluent consumers divided into 10,000-household zones, and Money Mailer is successful because the companies who sign up for it get good results.
It’s also worth noting that franchisees make use of digital technologies for efficient workflow – requesting ad designs from corporate headquarters, receiving and distributing ad proofs for approval – it all happens online.
Founded in 1979 and franchising since 1980, the number of locations has held relatively steady in recent years and currently stands at 233 (down from last year’s total of 238), of which 65 are company-owned and all are located in the U.S.
2. Valpak Direct Marketing Systems
Valpak Direct Marketing Systems dates back to the late 1960s when it was founded by Terry Loebel in St. Petersburg, Florida. Like Money Mailer, the core feature of the business model is direct mail coupons in communities from local businesses.
Each month, the company’s Blue Envelope is delivered to upwards of 39 million targeted households in 45 states and four Canadian provinces. The reach of its direct mail program is further extended by its digital suite of products, including the valpak.com website, which reaches as many as 110 million users.
As the company tag line explains, “Valpak is at the heart of communities across North America, helping people save, businesses grow and neighborhoods thrive…”
The most recent company development is the integration of direct mail, digital offers, and custom social content into an omnichannel solution called SKUlocal, which appears to be achieving robust returns on the integrated ad spends that identify and activate specific shopper segments.
Founded in 1968 and franchising since 1988, the number of locations has declined in recent years from 179 in 2012 to 143 in 2017 (the last time data was reported), of which 14 were company-owned and four were located outside the U.S.
3. Welcomemat Services
Welcomemat Services is a direct mail marketing service that specifically targets people who have recently moved to a community. The idea is that when a person is newly moved into a community, they are not a loyal customer of any business, and reaching them first makes them five times more likely to stay loyal to a business.
The company claims to have the most advanced technologies in its new mover marketing program with timely, targeted, and trackable results. Coupons in its welcome pack for new movers can see redemption rates as high as 50%. Welcomemat has also developed email and social marketing programs designed to engage consumers with local business brands to grow a loyal customer base through a consistent digital presence.
The company also runs a special Perfect Match Postcard program to profile and target consumers in the local community that are most likely to become loyal customers with a jumbo, custom-designed, full-color postcard. There is also a special “Cultural Edition” program just for cultural organizations (theaters, museums, etc.).
Founded in 2003 and franchising since 2010, the number of locations has grown in recent years from 12 in 2010 to the current total of 75 (up from last year’s total of 70), 27 of which are company-owned and all of which are located in the U.S.
4. Our Town America
Our Town America is another new mover marketing program focused on exclusivity and targeting. The company will only partner with one of each type of business in a given zip code, allowing that business to “lock out” competitors.
When the new mover goes to redeem one of the gift certificates in the mailing they receive, they have to fill in their name and address, which is then used to trigger the mailing of a follow-up “thank you” postcard that invites them back to the business with an additional offer.
The company notes that with approximately 14% of the U.S. population moving each year (that’s 40 million people), this is a rich and strategic market to target. New movers typically end up spending more in order to establish their business loyalties.
Our Town’s proprietary system estimates response rates and achieves a high level of accuracy to avoid wasted coverage and maximize the return on every advertising spend.
This company currently ranks #428 (down from last year’s position of #320) on Entrepreneur magazine’s Franchise 500 list. Founded in 1972 and franchising since 2004, the number of locations has grown in recent years from 41 in 2010 to the current total of 65 (two more than last year), none of which are company-owned and all of which are located in the U.S.
5. Town Money Saver
Town Money Saver sends a direct mail advertising flyer each month to more than 2.2 million mailboxes of residents in 150 communities across multiple mid-western states. Each edition is packed full of coupons and opportunities for consumers to save money at businesses in their local area.
Perhaps the most unique thing about this company is its approach to franchising. Its Performance Awarded Franchise Opportunity means ambitious entrepreneurs can start a franchise without fees. How is that possible?
A franchisee doesn’t need a storefront, inventory, or employees to get started, and corporate headquarters handles all the graphic coordination, printing, and mailing so the franchisee can focus on customer relationships and growth. Income for the franchisee is based on a portion of the revenue from selling ad space in the monthly flyer.
This company currently ranks #490 (down from last year’s position of #475) on Entrepreneur magazine’s Franchise 500 list. Founded in 1992 and franchising since 2005, the number of locations has grown in recent years from 33 in 2010 to the current total of 52 (three more than last year’s total), none of which are company-owned and all of which are located in the U.S.
An Important Note About Our Methodology
The franchises on this list were ranked according to the number of units in the franchise system. If you are a prospective franchisee searching for franchise opportunities that meet or exceed certain performance benchmarks for sales, profits, and return on investment, please check out this list of America’s Most Lucrative Franchises.