Direct marketing key for UK firms

01 August 2012

LONDON: Direct marketing delivers over 20% of the sales recorded by companies in the UK, according to a new study.

The Direct Marketing Association, the industry body, and the Future Foundation, the research firm, surveyed 600 organisations, a panel which was representative of the make-up of the UK economy.

As a result, the analysis argued that direct marketing generated some £700bn in sales for British brand owners last year, or 23% of the £3tr in revenues registered overall.

In terms of expenditure, a total of £14.2bn was invested in this area in 2011, and spending is likely to rise by a further 7% in 2012, hitting £15.2bn, with digital channels set to be the main beneficiary.

More specifically, email marketing budgets are due to climb by 11.9% to £2.5bn. Outgoings on social media are also pegged to log 8.1% growth, reaching £2.2bn, as paid search sees a 6.3% lift to £516m.

By sector, firms in the travel and leisure category attributed 32.1% of their sales to direct marketing, a share standing at 29.7% for retailers and wholesalers and 28.2% for financial services.

Figure here stood at 22.1% for telecoms and utilities, falling to 19.7% for charities and other services, 19.7% for business and professional services, and 14.6% for primary manufacturing and construction.

Elsewhere, the report warned that tighter data protection proposals currently under consideration by the European Union may prove highly pernicious at the financial level.

Among the potential changes being discussed are the "right to be forgotten", allowing consumers to delete data if there are not legitimate reasons for its retention.

When consent is required for data to be processed, this would also need to be given explicitly, rather than assumed, as is often the case at present.

However, the DMA suggested that, if passed, this legislation could cost £47bn, or £76,000 per company, as a consequence of new expenses being incurred by brand owners, alongside lost sales.

Data sourced from Marketing Week; additional content by Warc staff