Direct Marketing

Published by: Key Note Publications Ltd

Published: Nov. 1, 2007 - 142 Pages

Table of Contents

Executive Summary

1. Market Definition

REPORT COVERAGE

MARKET SECTORS

MARKET TRENDS

Integrated Campaigns

Environmental Impacts

ECONOMIC TRENDS

Population

Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 2002-2006

Gross Domestic Product

Table 2: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2002-2006

Inflation

Table 3: UK Rate of Inflation (%), 2002-2006

Unemployment

Table 4: Actual Number of Unemployed Persons in the UK (million), 2002-2006

Household Disposable Income

Table 5: UK Household Disposable Income Per Capita (£), 2002-2006

MARKET POSITION

The UK

Overseas

2. Market Size

THE TOTAL MARKET

Table 6: The Total UK Market for Direct Marketing by Channel by Value at Current Prices (£m and %), Year Ending 31st December 2006

Table 7: The Total UK Market for Direct Marketing by Sector by Value at Current Prices (£m), 2001-2005

Figure 1: The Total UK Market for Direct Marketing by Value at Current Prices (£m), 2001-2005

Table 8: Advertising Expenditure by Channel by Value at Constant 2000 Prices (£m), 2002-2006

Figure 2: Advertising Expenditure by Value at Constant 2000 Prices (£m), 2002-2006

BY MARKET SECTOR

Figure 3: The Total UK Market for Direct Marketing by Channel by Value at Current Prices (%), Year Ending 31st December 2006

Direct Mail

Table 9: Direct Mail Advertising Expenditure by Category by Value at Constant 2000 Prices (£m), 2002-2006

Figure 4: Direct Mail Advertising Expenditure by Value at Constant 2000 Prices (£m), 2002-2006

Table 10: UK Direct Mail Volumes by Category (million items), 2002-2006

By Product Category

Table 11: Top 20 Product Categories by Direct Mail Expenditure (£000), 2005 and 2006

Business-to-Business Mailings

Table 12: UK Business-to-Business Direct Mail Response Rates by Industry Sector (% of mailings), 2004/2005

Table 13: UK Business-to-Business Direct Mail Response Rates by Action Requested (% of mailings), 2004/2005

Table 14: UK Business-to-Business Direct Mail Response Rates When Part of an Integrated Campaign (% of mailings), 2004/2005

Consumer Mailings

Table 15: UK Consumer Direct Mail Response Rates by Industry Sector (% of mailings), 2004/2005

Table 16: UK Consumer Direct Mail Response Rates by Action Requested (% of mailings), 2004/2005

Table 17: UK Consumer Direct Mail Response Rates When Part of an Integrated Campaign (% of mailings), 2004/2005

Internet Advertising

Table 18: Internet Advertising Expenditure by Value at Current Prices (£m), 2002-2006

Figure 5: Internet Advertising Expenditure by Value at Current Prices (£m), 2002-2006

Table 19: Total Internet Use by Sex and Age (hours and %), April 2007

Direct-Response Print Media — Magazines, National Press and Regional Press

Table 20: The UK Direct-Response Print Media Sector by Type by Value at Current Prices (£m), 2001-2005

Figure 6: The UK Direct-Response Print Media Sector by Type by Value at Current Prices (£m), 2001-2005

Door Drops

Table 21: The UK Door-to-Door Sector by Value at Current Prices (£m), 2001-2005

Figure 7: The UK Door-to-Door Sector by Value at Current Prices (£m), 2001-2005

Inserts

Table 22: The UK Inserts Sector by Value at Current Prices (£m), 2001-2005

Figure 8: The UK Inserts Sector by Value at Current Prices (£m), 2001-2005

Table 23: The UK Inserts Sector by Volume (number), 2005 and 2006

Customer Magazines

Table 24: The UK Customer Magazines Sector by Value at Current Prices (£m), 2001-2005

Figure 9: The UK Customer Magazines Sector by Value at Current Prices (£m), 2001-2005

Table 25: Top 20 Consumer Magazine Titles by Circulation, January-June 2007

E-Mail Marketing

Telemarketing

Table 26: The UK Telemarketing Sector by Value at Current Prices (£m), 2001-2005

Figure 10: The UK Telemarketing Sector by Value at Current Prices (£m), 2001-2005

Direct-Response Radio

Table 27: The UK Direct-Response Radio Sector by Value at Current Prices (£m), 2001-2005

Figure 11: The UK Direct-Response Radio Sector by Value at Current Prices (£m), 2001-2005

Direct-Response Television

Table 28: The UK Direct-Response Television Sector by Value at Current Prices (£m), 2001-2005

Figure 12: The UK Direct-Response Television Sector by Value at Current Prices (£m), 2001-2005

Outdoor/Transport

Table 29: The UK Outdoor/Transport Sector by Value at Current Prices (£m), 2001-2005

Figure 13: The UK Outdoor/Transport Sector by Value at Current Prices (£m), 2001-2005

Mobile Messaging

Table 30: Key Metrics for UK Mobile Telecommunications, 2002-2006

3. Industry Background

RECENT HISTORY

ClientLogic Merger with Sitel

Postal Concerns

Improving the Image of Direct Marketing

NUMBER OF COMPANIES

Table 31: Number of UK VAT-Based Enterprises Engaged in Business and Management Consultancy Activities — Including Public Relations — and Advertising by Turnover Sizeband, 2007

EMPLOYMENT

Table 32: Number of UK VAT-Based Enterprises Engaged in Business and Management Consultancy Activities — Including Public Relations — and Advertising by Employment Sizeband, 2007

REGIONAL VARIATIONS IN THE MARKETPLACE

Table 33: Number of UK VAT-Based Enterprises Engaged in Business and Management Consultancy Activities — Including Public Relations — and Advertising by Region, 2007

HOW ROBUST IS THE MARKET?

INDUSTRY REGULATION

KEY TRADE ASSOCIATIONS

Advertising Association

Advertising Standards Authority

Association of Publishing Agencies

The Chartered Institute of Marketing

Customer Contact Association

Direct Mail Information Service

Direct Marketing Association

The Institute of Direct Marketing

Institute of Practitioners in Advertising

ISBA

Mail Users' Association

The Marketing Society

Safe Home Ordering Protection Scheme

New Media Associations

The British Interactive Media Association

Internet Advertising Bureau

Mobile Marketing Association

International Associations

Federation of European Direct and Interactive Marketing

Public Bodies

Office of Communications

PhonepayPlus

The Postal Services Commission

4. Competitor Analysis

THE MARKETPLACE

DIRECT MARKETING AGENCIES

Market Leaders

Table 34: Leading UK Direct Marketing Agencies by Gross Profit (£), 2005/2006

Table 35: Leading Direct Marketing Agencies — Winners of the DMA Awards, 2006

Cello Group PLC

Company Structure

Current and Future Developments

Financial Results

Creston PLC

Company Structure

Current and Future Developments

Financial Results

Dare Digital Ltd

Company Structure

Current and Future Developments

Financial Results

Digital Marketing Group PLC

Company Structure

Current and Future Developments

Financial Results

HicklinSlade & Partners Ltd

Company Structure

Current and Future Developments

Financial Results

J2 Design Marketing Internet Ltd

Company Structure

Current and Future Developments

Financial Results

Kitcatt Nohr Alexander Shaw Ltd

Company Structure

Current and Future Developments

Financial Results

Mike Colling & Company Ltd

Company Structure

Current and Future Developments

Financial Results

Partners Andrews Aldridge Ltd

Company Structure

Current and Future Developments

Financial Results

Presky Maves Group Ltd

Company Structure

Current and Future Developments

Financial Results

Story UK Ltd

Company Structure

Current and Future Developments

Financial Results

20:20 London Ltd

Company Structure

Current and Future Developments

Financial Results

Watson, Phillips & Norman Ltd

Company Structure

Current and Future Developments

Financial Results

TELEMARKETING

Customer Dissatisfaction

Table 36: Waiting Preferences for Call Centre Telephone Answering (number and %), 2006

Table 37: Concerns Over Offshore Call Centres (number and %), 2006

Market Leaders

Table 38: Top 20 Outsourced Telemarketing Companies by Turnover (£000 and number), 2006

Table 39: Top 20 Outsourced Telemarketing Companies by Ownership, 2006

Vertex Data Science Ltd

Company Structure

Current and Future Developments

Financial Results

Club 24 Ltd — Trading as Ventura 2004

Company Structure

Current and Future Developments

Financial Results

Response Handling Ltd

Company Structure

Current and Future Developments

Financial Results

Outside Suppliers

E-MAIL MARKETING

Reasons for Using E-Mails

Table 40: Type of E-Mails Sent by Company Turnover (£m and %), 2006

What E-Mail Service?

Glossary of Terms Used in E-Mail Marketing

Market Leaders

Table 41: Leading E-Mail Agencies by Turnover (£ and number), 2005 and 2006

DLG

Company Structure

Current and Future Developments

Financial Results

EDR Ltd

Company Structure

Current and Future Developments

Financial Results

MailTrack Ltd

Company Structure

Current and Future Developments

Financial Results

MARKETING ACTIVITY

The DMA Awards

The IDM Business Performance Awards

The Marketing Society Awards for Excellence (in Association with Marketing)

The Direct Awards

Marketing Week Effectiveness Awards

Precision Marketing Response Awards

The BIMA Awards

The Won Report

Table 42: Top Award Winning UK Direct Marketing Agencies, 2006

Table 43: Major UK Direct Marketing Exhibitions

Table 44: Leading UK Marketing Magazines, 2007

5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

6. Buying Behaviour

INTRODUCTION

CALL CENTRE SATISFACTION

Table 45: Comparison of Satisfaction Ratings Between Consumers and Call Centre Managers (% of respondents), 2006

INTEGRATED DIGITAL AND DIRECT MAIL

7. Current Issues

THE SUPERTRENDS

Brands

Media

Internet

Consumers

Data

Table 46: Responses from the Institute of Direct Marketing's Symposium Audience (number of votes), May 2007

8. The Global Market

LEADING GLOBAL AGENCIES

Table 47: Top 20 Direct Marketing Agencies Listed in The Won Report, 2006

DIRECT MARKETING ASSOCIATIONS

9. Forecasts

INTRODUCTION

The Economy

Population

Table 48: Forecast UK Resident Population by Sex (000), Mid-Years 2007-2011

Gross Domestic Product

Table 49: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2007-2011

Inflation

Table 50: Forecast UK Rate of Inflation (%), 2007-2011

Unemployment

Table 51: Forecast Actual Number of Unemployed Persons in the UK (million), 2007-2011

FORECASTS 2007 TO 2011

Table 52: Forecast Total UK Market for Direct Marketing by Channel by Value at Current Prices (£m), 2007-2011

MARKET GROWTH

Figure 14: Growth in the Total UK Market for Direct Marketing by Value at Current Prices (£m), 2006-2011

FUTURE TRENDS

Convergence

Green Issues

Consolidation

10. Company Profiles

Proximity London Ltd

tequilA\London Ltd

Wwav Rapp Collins

11. Glossary

12. Further Sources

Associations

Publications

Government Publications

Other Sources

Bisnode Sources

Abstract

Although direct marketing has always been about advertising to individuals, in the past most direct marketing campaigns took a `mud at the wall' approach through blanket campaigns that would hopefully include the particular audience they wanted to reach. However, the industry has developed since then: increasingly sophisticated databases give marketers access to more detailed information about their target customers, and customers can rule themselves out of receiving marketing messages or count themselves in if the product or service is something in which they are interested. As such, new media channels have given both marketers and customers more choice.

Although advertisers might mourn the decline of the single mass-marketing channels, consumers have moved on and now elect to receive — or not to receive — marketing messages through whichever channel is most convenient for them. The new media channels are beginning to reach critical mass themselves and marketers are migrating their media budgets away from the traditional channels. The stalwarts of the industry, telemarketing and direct mail, are still strong, but the trend is away from these channels and into online and e-mail marketing. Mobile marketing is still very much in its infancy.

The value of the traditional direct marketing channels remains, and marketers are keen to harness the strengths of each and integrate them to create campaigns that will support the message through a variety of media. The expertise required in managing these new channels to market is developing most rapidly in small start-up agencies, which are creating market niches for themselves. Furthermore, they are moving from being just production houses to include value-added services, and this makes them more attractive to clients — as well as to predators seeking to increase their own capabilities through acquisition.

This trend is particularly true of e-mail marketing, but there are also strong developments in data, with list owners building businesses around their proprietorial lists and agencies seeking to increase their expertise in this area in order to develop greater customer insight.

2006 saw a high level of criticism of the industry from the popular media, based around the suspension of a postal worker who informed customers how they could opt-out of receiving door drops. Summer 2006 was quickly dubbed direct marketing's summer of discontent, with a record number of people subscribing to the mail and telephone preference services to have their names removed from marketing lists. The industry is still questioning whether this is signalling the demise of direct mail and telemarketing.

For telemarketing in particular, the moving of customer-facing operations overseas is beginning to be re-examined. Many companies understand the value of providing higher-quality call handling and have elected not to move their operations overseas, or to bring some parts of it back. Coming back with them are the Indian companies that have built up their own expertise: two major acquisitions of UK telemarketing outsourcing companies were made by India-based companies in 2007, with the intention of meeting the demand for UK-based call handling. Telemarketing may be down, but it is not out.

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