I wouldn't say that direct mail is dead, it just plays a much less prominent role in an advertiser's portfolio. When used selectively and when targeted to the right demographic, direct mail still is an effective tool.
Rather than focusing on the advertising channel, I would spend more effort as an advertiser strategizing on the type of campaign to use. Hard sell is definitely out. Today it's all about relationship building and trust. A direct mail campaign can definitely play a role in this type of long-term communication strategy.
It all depends on your target audience and how good your list is. It can be a very effective form of advertising. For example if you are looking to sell to software engineers you wouldn't use it because they spend more time "online". If you are selling to housewives or school teachers then direct mail is an excellent option. You really have to determine where and how your audience interacts.
I wouldn't say it's dead yet. Personally, I still like the form factor of a magazine/brochure/etc. And despite owning a bunch of different electronic devices, I was actually prompted to make a purchase within the year thanks to a direct mailing.
With that said, it's definitely declining. It's far more expensive for companies to produce and is probably more effective for older demographics than younger demographics. And tablets are definitely coming pretty close to being able to compete on the form-factor level.
No. but the return rate is much lower then it used to be.
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No, direct mail is definitely not dead.
Your success will hinge on three fundamental factors:
1. Did you select the right audience for the product or offer?
2. Did you secure the best list?
3. Is your mailer compelling and strongly differentiating?