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News Release from: Direct Marketing Association | Subject: Economic Impact of the UK DM Industry report
Edited by the Marketingservicestalk Editorial
Team on 25 July 2007
Future Foundation study reveals huge
value of DM
The DMA has called for a responsible approach to sustain industry growth after new studies have revealed the true impact of the direct marketing and direct mail industry on the UK economy.
The Economic Impact of the UK Direct Marketing Industry report shows that the overall value of direct marketing to the UK economy stands at GBP43.7 billion and that total employment accounted for by the direct marketing industry has grown by 9.5 per cent since 2004 to 886,000 - representing 3.1 per cent of total UK employment A separate Future Foundation report which looks solely at the direct mail industry, the largest element of the direct marketing mix, paints a similar picture of growth with direct mail expenditure in the UK standing at GBP8.6billion and employment accounted for by direct mail at 182,000
This article was originally published on Marketingservicestalk on 26 Jun 2007 at 8.00am (UK)
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The report shows that over 75,600 companies with a turnover greater than GBP1m undertake direct mail, spending an average of GBP35,000 per annum.
Robert Keitch, director of Media Channel Development, DMA, said: "The continued growth of the industry highlights its resilience and adaptability to changing conditions.
"However, to sustain such growth, it is vital that the industry continues to adapt and takes a responsible approach by balancing consumer and business needs with environmental and social responsibility".
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Findings from the study put the total value of consumer and business sales generated by direct marketing at GBP125 billion with consumer sales estimated to be GBP72 billion, just over 9 per cent of total UK consumer spending.
Emphasising the size and maturity of the market, this puts expenditure as a result of direct marketing above other significant sectors such as the clothing and footwear industry (GBP45 billion) and alcoholic drinks industry (GBP42 billion).
The report also highlights the dramatic increase in the proportion of sales accounted for by the internet, increasing nearly fourfold from GBP14bn in 2004 to GBP52bn in 2006 while sales attributed to direct mail are estimated to be GBP17billion.
While both B2B and B2C direct marketing expenditure has increased over the past two years, the increase in B2C has been faster at 18.9 per cent compared to 11.8 per cent for B2B.
This overall growth is reflected in the expenditure on direct marketing budgets which rose by 16.2 per cent from GBP14.1bn in 2004 to GBP16.4bn in 2006.
The report also reveals the proportion of direct marketing expenditure budgets allocated to different channels.
Confirming its significance to the industry, direct mail accounts for the largest proportion of all expenditure at 26.1 per cent with internet advertising and email combined following closely at 21.5 per cent, demonstrating the increasing reach of interactive media.
Other more traditional forms of direct marketing such as door drops (8.6 per cent), inserts (7.3 per cent) and direct response magazine advertising (9.8 per cent) continue to perform strongly.
Underlining the increasing value of integrated marketing campaigns, similar proportions were allocated to customer magazines, email marketing, telemarketing and field marketing.
As well as an analysis of total employment accounted for by the direct marketing industry, the report also revealed that the average salary for people directly employed in direct marketing in the UK stands at GBP28,400.
Melanie Howard, Future Foundation, commented: "Our research findings paint a picture of a dynamic industry which makes a significant contribution to the UK economy.
"While traditional DM sectors maintain steady growth, the accelerated rise in new media, together with a heightened use of cross-media integrated campaigns, have provided a new dimension to the industry.
"It is interesting that despite the challenges faced by direct marketing as a fast moving and rapidly evolving industry, it always seems to be able to adapt accordingly and ultimately continues to grow.
"This demonstrates direct marketing's maturity as a marketing discipline, showing that it is ready and willing to change in response to new circumstances whether regulatory, technological, or consumer driven".
The research carried out by the Future Foundation was commissioned by the Direct Marketing Association in conjunction with Royal Mail.
It is intended to provide an assessment of the total value of the direct marketing industry to the UK including expenditure, employment and sales.
The basis for the analysis comprised original research covering a representative sample of UK businesses.
This ensured that the view of the economic impact of direct marketing produced by the study is the broadest possible.
The research was conducted via the telephone with decision makers responsible for direct marketing using a questionnaire designed by the Future Foundation in consultation with the DMA, which repeated key questions from the earlier study and added some new ones.
The research questioned 418 companies (weighted to be representative of usage of direct marketing by sector within the economy on the basis of the comprehensive organisational omnibus used in 2004 to establish the best sample frame).
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