Direct Mail Pushes The Envelope As Expenditure Rises

The direct mail industry saw expenditure rise by a nominal 0.6% year on year during the last quarter of 2003, according to the latest figures from the Direct Mail Information Service.

The results show that full-year expenditure rose by 2.2% to more than £2,431 million, as the difficult economic conditions continued to force advertisers to seek more cost effective forms of marketing.

However, the industry has yet to return to the massive growth enjoyed at the beginning of last year. During the first quarter of 2003 expenditure increased by 4.5% year on year to more than £658 million (see Direct Mail Gets Off To A Flying Start In 2003).

The latest figures also show that a total of 5,438 million items of direct mail were sent last year, an increase of 3.9% on 2002, while volume during the fourth quarter increased by 1.5% to 1,314 million items.

Consumer direct mail volume saw the largest increase, rising by 7.6% year on year to more than 4,240 items. Business direct mail decreased gradually throughout 2003, with a total decline of 7.4% on the previous year, down to just over 1,197 million.

Gains were made in volume by the banks and building societies, utilities and health sectors. The Government sector notched up the largest increase, rising by 20.5% on the same period in 2002. However, the insurance and home shopping sectors saw a decline in volume during quarter four, falling by 2.5% and 6.1% respectively.

Commenting on the figures, Jo Howard-Brown of the DMIS said: “The year end figures only go to prove what the direct marketing industry has been saying for the last twelve months. Though there has been an increase in the amount of Direct Mail sent DM suppliers have seen a drop in the amount of money spent, any apparent increase is due mainly to postage costs.”

The latest figures follow research published late last year by the DMIS showing that e-commerce companies now spend an average of £1.58 million on direct mail, benefiting from a growing trend towards highly targeted advertising. The study showed total advertising budgets in the sector averaged £9.8 million, with just over half of the 87 companies surveyed reporting an increase in adspend over the last two years (see NewsLine).

DMIS: 0207 494 0483 www.dmis.co.uk

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