Direct Mail Industry Sees Revenue Growth Slow
Growth in direct mail appears to be slowing with revenue increasing by just 0.6% year on year to £557 million in the three months to September 2003, according to the latest figures from the Direct Mail Information Service.
Direct mail has been one of the main beneficiaries of the trend towards more targeted and cost effective forms of marketing. However, data for the third quarter reveals the industry has failed to recreate the significant revenue increases it has seen in the past (see Direct Mail Gets Off To A Flying Start In 2003).
A break down of the sector’s total expenditure shows that postage generated £243 million and accounted for 44% of overall spend in the three months to September. Meanwhile, production made up 56% of the total and brought in £315 million during the same period.
However, direct mail volume increased by 5.4% year on year to 1.3 billion items, with business to consumer mailing rising by 7.5%. However, this was offset by a 1.8% decrease in the business to business sector, which has been in decline since the beginning of last year.
Financial services and home shopping remain the largest mailers with volumes of 241 million and 135 million respectively. The financial services sector recorded an increase of 13.6% year on year, whilst home shopping dipped by 6% during the same period.
The sectors showing the largest growth since the third quarter of 2002 were the health sector, which increased by nearly 31% year on year to 11.5 million items and the utilities sector, which rose by 26% to 54.2 million items.
Analysis shows that volume growth across all socio-demographic groups continued to rise. During the three months to September mailings to both C1 and C2 groupings increased by over 8%. Mailings declined by 7.2% in the 16 to 34 age group, but increased by 14.4% to 55 to 64 year-olds.
Recent research from the Direct Marketing Association shows that the direct marketing industry saw a distinct improvement in business conditions in the three months to September 2003, with imbalances between the sectors stabilising and some media appearing particularly buoyant (see Direct Marketing Industry Has Positive Third Quarter).
A study from Carat has also urged advertisers to recognise that direct mail is more than a direct response medium and can be highly effective at raising awareness and communicating brand identity (see Research Urges Media Planners To Recognise Direct Mail).
DMIS: 0207 494 0403 www.dmis.co.uk
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