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It's always dangerous to predict the death of businesses. They have a habit of evolving, and successful niches will long outlive the demise of the bulk of the market.

What we are seeing now is the rapid growth of digital communications, a new business that's a cost-effective substitute for direct mail. The question is, how profound will the impact of this be on direct mail, and is this enough to kill it off as an acquisition tool?

The internet is already faster, cheaper, greener, more accountable and less wasteful than direct mail. Right now it doesn't reach everyone, but its reach among economically active individuals (the people most advertisers want to talk to) is very high.

But the key factor that will drive cost-effectiveness further, and thus sound the death knell for direct mail, is relevance.

I'm not talking here about the ability to drop a recipient's name into copy, but to make content relevant to that recipient's behaviour. Users can be targeted (and copy selected) on the basis of products they've consumed, web pages they've visited and indications they've given of their interests.

This can often be done without knowing any personally identifiable information, and without any opt-in or out.

Importantly, this isn't just about replacing direct mail with email.

Behavioural and contextual targeting is enabling a new generation of direct advertising to emerge, creating an electronic armoury that's providing a cost-effective alternative to shipping around tons of dead trees.

And as the business environment demands greater flexibility and responsiveness to customer demands, faster speed to market both with products and marketing becomes a critical competitive advantage.

So although some dotcoms (such as Lastminute) are launching customer magazines that will be mailed out, the trend is overwhelmingly in the other direction.

Email has become the defining tool for maintaining ongoing customer relationships in many businesses.

Placing physical material in peoples' hands is a powerful communication tool. But this isn't the point. If demonstrably the same end can be achieved at lower cost electronically, then this is what will happen.

So although direct mail isn't likely to die as a customer acquisition tool, it faces increasing substitution by electronic channels, and increasing marginalisation into niches - targeting less digitally connected people.

What is worrying for the direct mail sector is that typically, these tend to be less attractive to most advertisers.

IN SUMMARY

- E-marketing is a cost-effective substitute for direct mail

- It's less wasteful and greener

- It reaches a high proportion of economically active individuals

- E-marketing is more relevant, with internet users targeted on what they've bought

NO: PATRICK SARGEANT, managing director, Response One

A cursory glance at our own doormats is often enough to confirm our worst fear about direct mail. Examples of poorly conceived and executed campaigns are not hard to find. As a result, the scaremongers find it easy to bang their drums and welcome the demise of direct mail.

But this is a pretty shallow view, overlooking the fact that direct mail has, for the innovative pioneers at least, reached new levels of sophistication and performance.

Yes, the market has changed and yes, it is tougher now to make direct mail work than it was five or ten years ago. But therein lies the challenge.

The reality is that while consumers have changed, they haven't changed as much as we think. They are wiser to marketing techniques, but ultimately people still enjoy the tactile feel of print on paper, and if the offer is right they will respond.

The bottom line is that when we get it right, direct mail works. And now, more than ever, we are able to improve our chances of getting it right. Never before have analytics, segmentation, modelling, customer insight and contact strategy been blended so successfully in direct mail prospect communication. We may be witnessing a new digital era, but we are equally witnessing the resurgence of an old channel.

Direct mail is finally growing up. After a few false dawns it is now delivering real insight and long-term ROI, but only for those able and willing to push the boundaries and challenge conventional wisdom.

I'm happy to concede that direct mail isn't as sexy as its digital counterparts. Channel choice is not, however, determined by fluffy values. If we keep our eye on the bottom line, properly delivered direct mail will always form part of the mix.

We all relish the introduction of new media channels, but those who herald new champions at the expense of direct mail are frankly missing a trick. The future lies in integrated multi-channel communication.

I don't condone bad direct mail, but those people who hail direct mail as an outdated medium are themselves living in the past. The industry has moved on and those who recognise it are happily reaping the rewards.

The situation leaves us with two extreme camps: direct mail practitioners with their heads in the sand who refuse to acknowledge the need for change, and digital evangelists who predict channel revolution.

Me, I'm happy. At my company we understand how to make direct mail produce exceptional results. So while others pontificate, we will continue to deliver campaigns with enduring value.

IN SUMMARY - Direct mail has reached new levels of sophistication - Consumers still enjoy the tactile feel of print on paper - Segmentation, modelling, customer insight and contact strategy are all blending successfully in direct mail production - The future lies in integrated communications