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Direct Marketing Market Report 2005
Key Note Publications Ltd, June 2005
In 2004 and early 2005, the direct marketing industry was looking positive, having seen the end of the dip in the UK economy of 2001 to 2003. Seeing the effectiveness of direct marketing, advertisers revised their budgets upwards — at the expense, perhaps, of more traditional media marketing. In 2004, the direct marketing industry was worth an estimated £14.99bn at current prices, a rise of 10.1% from 2003.
The economic dip taught advertisers that they need to justify their marketing spends in terms of the returns they obtained on their investments. The challenge has already been issued to other marketing investments — the public relations (PR) industry, for example, is already working hard to find ways of measuring investments in PR. However, measurement has always been one of the strengths of direct marketing: companies print a number of customer telephone numbers to call, count how many calls are received or mail out thousands of coupons, and count how many are redeemed. For this reason, budgets will always be diverted into direct marketing if savings have to be made.
There is more of a challenge to prove effectiveness in new media marketing. E-mail marketing can be demonstrated to be immediate and effective, but as it is a relatively new media, there is not the same depth of analysis available as there is in more traditional database or door-drop marketing methods. Nevertheless, the market leaders profiled in this report are making much headway in this respect.
In addition, there is a new avenue to explore: mobile marketing. The short messaging service (SMS or texting) phenomenon has been well recorded, but even before third-generation (3G) mobile phones have reached the same kind of coverage as second-generation (2G) mobile phones, media messaging service (MMS) is becoming increasingly available to consumers. Marketers are keen to explore how it is best to exploit this medium, especially in reaching the 16 to 35 year-olds, who are the most likely users.
Unsurprisingly, of the sectors covered in this report, new media is the one that showed the most growth in 2004, but telemarketing is also strong, despite criticisms that offshore outsourcing would adversely affect it. In contrast, direct-response radio and direct-response cinema are beginning to slip beneath the direct marketing radar.
Also, direct mail — for so long the mainstay of direct marketing — is beginning to slow in terms of the number of items mailed. However, this report will show that, in database marketing especially, marketers are using the resources available to them to more carefully target their campaigns.
Direct marketing has always proved itself to be reasonably recession-proof. As this report shows, it is practically future-proof too. Although direct marketing is a broad industry — there are many disciplines within it — practitioners have all of these resources available to them. In addition, as the larger media and communications corporations concentrate on networking the services within their groups, direct marketers can network their offerings to provide integrated solutions to their clients.
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