Is email marketing more effective than direct mail?
The real answer is... "It Depends."
It depends on who you're trying to reach.
It depends on your type of business.
It depends on what you're trying to achieve.
It depends on your budget.
It depends on how you measure effectiveness.
For local B2C companies, email marketing may not be very effective unless marketing to your existing client base. Purchasing personal email lists are hard to come by for very local markets, and consumers are very quick to write off unsolicited email as spam, no matter how brilliant you think your subject line is. Generally speaking, I'd recommend direct mail for B2C companies with a local or regional reach. But it can be expensive and require a lot of repetition.
B2B email lists are far easier to generate or purchase. Lists are available by industry, by geography, and by profession. Plus you can tap into industry sources and associations for some of these prospects. Its considerably less expensive and allows for better tracking and customization. But don't over do it. Its a trap that a lot of over zealous small businesses run into. An email every few weeks is already too much. I generally recommend no more than once per month. And like all branding, the message needs to look consistent, professional, fresh, and of course... make sure there is a call to action on all of your communications.
So there really is no clear answer that email marketing is more effective. The truth is, if you're in question, you probably should be doing both... and a lot more.