Direct Marketing

Published by: Key Note Publications Ltd

Published: May. 1, 2009 - 120 Pages

Table of Contents

Executive Summary

1. Market Definition

REPORT COVERAGE

MARKET SECTORS

MARKET TRENDS

Marketing in a Recession

`Monetising Your Data'

`The Internet Isn't Working'

`Back to Basics'

Direct Digital

ECONOMIC TRENDS

Population

Table 1.1: UK Resident Population Estimates by Sex (000 and %), Mid-Years 2004-2008

Gross Domestic Product

Table 1.2: UK Gross Domestic Product at Current and Annual Prices (£m), 2004-2008

Inflation

Table 1.3: UK Rate of Inflation (%), 2004-2008

Unemployment

Table 1.4: Actual Number of Unemployed Persons (million), 2004-2008

Household Disposable Income

Table 1.5: Household Disposable Income Per Capita (£), 2003-2007

MARKET POSITION

The UK

Overseas

Table 1.6: Direct Marketing in India by Channel by Value ($m), 2008

2. Market Size

THE TOTAL MARKET

Table 2.1: The Total UK Market for Direct Marketing by Channel by Value at Current Prices (£m and %), Years Ending 31st December 2006, 2007 and 2008

Table 2.2: The Total UK Direct Marketing Expenditure on the Business-to-Business and Business-to-Consumer Markets at Current Prices (£bn and %), Year Ending 31st December 2007

Table 2.3: The Total UK Market for Direct Marketing by Channel Share by Value at Current Prices (%), Years Ending 31st December 2006, 2007 and 2008

Table 2.4: UK Advertising Expenditure by Channel by Value at Current Prices (£m and %), 2003-2007

Figure 2.1: UK Advertising Expenditure by Value at Current Prices (£m), 2003-2007

MARKET SECTORS

Direct Mail

Table 2.5: UK Direct Mail Advertising Expenditure by Category by Value at Current Prices (£m), 2003-2007

Figure 2.2: UK Direct Mail Advertising Expenditure by Category by Value at Current Prices (£m), 2003-2007

Internet Advertising

Table 2.6: Internet Advertising Expenditure by Format by Value (£m and %), 1st January 2008 to 30th June 2008

Table 2.7: UK Internet Advertising Expenditure by Value at Current Prices (£m and %), 2003-2007

Table 2.8: Number of UK Households with Internet Access (million and %), 2006-2008

Print Media — Inserts and Direct-Response Advertising

Table 2.9: The UK Inserts Sector by Volume (number and %), Quarter 1 2005-2008

Table 2.10: UK Direct-Response Print Media Advertising Expenditure by Type by Value at Current Prices (£m), 2003-2007

Figure 2.3: UK Direct-Response Print Media Advertising Expenditure by Type by Value at Current Prices (£m), 2003-2007

Door Drops

Table 2.11: Door-Drops' Share of Door-Drop Advertising Expenditure in Great Britain by Region (%), 2007

E-mail Marketing

Table 2.12: Number of E-Mail Marketing Campaigns by Source by Quarter, Quarter 1 2007 to Quarter 2 2008

Customer Magazines

Table 2.13: Top 20 Consumer Magazine Titles by Average UK Net Circulation/Distribution per Issue (number), July to December 2008

Telemarketing

Field Marketing

Radio

Table 2.14: UK Radio Advertising Expenditure by Value at Current Prices (£m), 2003-2007

Direct-Response Television

Table 2.15: UK Direct-Response Television Advertising Expenditure by Value at Current Prices (£m), 2003-2007

Outdoor/Transport

Table 2.16: UK Outdoor/Transport Advertising Expenditure by Value at Current Prices (£m), 2003-2007

Table 2.17: Outdoor Advertising Expenditure by Value by Quarter (£ and %), 2007 and 2008

Mobile Media

Table 2.18: Percentage Share of Total UK Mobile Phone Advertising Requests by Manufacturer, January 2009

Table 2.19: Percentage Share of Total UK Smartphone Advertising Requests by Manufacturer, January 2009

Table 2.20: Percentage of Adults Personally Owning and Using a Mobile Phone by Age and Social Grade, Years Ending June 2005, 2006, 2007 and 2008

3. Industry Background

RECENT HISTORY

Royal Mail Sell-Off

Market Movements

Sustainability

Number of Companies

Table 3.1: Number of UK VAT- and/or PAYE-Based Enterprises Engaged in Advertising and Business and Management Consultancy Activities by Employment Sizeband, 2007 and 2008

Employment

Table 3.2: Number of People Employed in Direct Marketing in the UK by Type of Employment, 2006 and 2007

REGIONAL VARIATIONS IN THE MARKETPLACE

Table 3.3: Number of UK VAT- and/or PAYE-Based Enterprises Engaged in Advertising and Business and Management Consultancy Activities by Government Office Region, 2008

HOW ROBUST IS THE MARKET?

INDUSTRY REGULATION

KEY TRADE ASSOCIATIONS

The Advertising Association

Advertising Standards Authority

Association of Publishing Agencies

British Interactive Media Association

The Chartered Institute of Marketing

Customer Contact Association

Direct Marketing Association (and Direct Mail Accreditation and Recognition Centre)

Incorporated Society of British Advertisers

The Institute of Direct Marketing

International Mature Marketing Network

Internet Advertising Bureau

Institute of Practitioners of Advertising

Mail Users' Association

The Marketing Society

The Mobile Marketing Association

INTERNATIONAL

Federation of European Direct and Interactive Marketing

Public Bodies

PhonepayPlus

Office of Communications

The Postal Services Commission

4. Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

Leading Direct Marketing Agencies

Table 4.1: Top Direct and Sales Promotion Agencies by Gross Profit and Turnover (£m), 2007

Table 4.2: Top Direct and Sales Promotion Agencies by Ownership, 2007

Table 4.3: Leading Direct Marketing Agencies — Winners of the DMA Awards, 2008

Leading Digital Marketing Agencies

Table 4.4: Top 20 Digital Marketing Agencies by Fee Income, 2008

Archibald Ingall Stretton Ltd

Company Structure

Brands and Services

Recent Developments

COMPETITOR ANALYSIS

BD Network Ltd

Company Structure

Current and Future Developments

Financial Results

Table 4.5: Financial Results for BD Network Ltd (£000), Years Ending 31st December 2005, 2006 and 2007

Billington Cartmell Ltd

Company Structure

Current and Future Developments

Financial Results

Table 4.6: Financial Results for Billington Cartmell Ltd (£000), Years Ending 31st December 2006 and 2007

Cello Group PLC

Company Structure

Current and Future Developments

Financial Results

Table 4.7: Financial Results for Cello Group PLC (£000), Year Ending 31st December 2007 and 6-Month Periods Ending 30th June 2007 and 2008

CHI & Partners Ltd

Company Structure

Current and Future Developments

Financial Results

Table 4.8: Financial Results for CHI & Partners Ltd (£000), Years Ending 30th September 2005, 2006 and 2007

The Direct Marketing Group Ltd

Company Structure

Current and Future Developments

Financial Results

Table 4.9: Financial Results for The Direct Marketing Group Ltd (£000), Years Ending 30th June 2005, 2006 and 2007

Gyro International Ltd

Company Structure

Current and Future Developments

Financial Results

Table 4.10: Financial Results for Gyro International Ltd (£000), Years Ending 30th June 2005 and 2006, and 30th September 2007

Haygarth Group Ltd

Company Structure

Current and Future Developments

Financial Results

Table 4.11: Financial Results for Haygarth Group Ltd (£000), Years Ending 31st December 2005, 2006 and 2007

Iris Nation Worldwide Ltd

Company Structure

Current and Future Developments

Financial Results

Table 4.12: Financial Results for Iris Nation Worldwide Ltd (£000), Years Ending 31st December 2005, 2006 and 2007

Rapier Ltd

Company Structure

Current and Future Developments

Financial Results

Table 4.13: Financial Results for Rapier Ltd (£000), Years Ending 31st December 2005, 2006 and 2007

TMN Group PLC

Company Structure

Current and Future Developments

Financial Results

Table 4.14: Financial Results for TMN Group PLC (£000), Years Ending 30th April 2006, 2007 and 2008

Other Companies — Mobile Marketing

Blyk

Company Structure

Current and Future Developments

Financial Results

MindMatics AG

Company Structure

Current and Future Developments

Financial Results

Nokia Interactive

Company Structure

Current and Future Developments

Financial Results

OUTSIDE SUPPLIERS — DATA

Table 4.15: Top Ten List Brokers by Volume of Names Traded, (number and £m), 2008

Mailtrack Ltd

Company Structure

Current and Future Developments

Financial Results

Table 4.16: Financial Results for Mailtrack Ltd (£000), Years Ending 31st December 2005, 2006 and 2007

Response One Ltd

Company Structure

Current and Future Developments

Financial Results

Table 4.17: Financial Results for Response One Ltd (£000), Years Ending 31st October 2005, 2006 and 2007

MediaLab Group Ltd

Company Structure

Current and Future Developments

Financial Results

Cheryl Nathan List Broking Ltd

Company Structure

Current and Future Developments

Financial Results

EDM Media Ltd

Company Structure

Current and Future Developments

Financial Results

Table 4.18: Financial Results for EDM Media Ltd (£000), Years Ending 31st December 2004, 2005 and 2006

MARKETING ACTIVITY

The DMA Awards

The IDM Business Performance Awards

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

The Connect Awards

Marketing Week Effectiveness Awards

The BIMA Awards

Table 4.19: Major UK Direct Marketing Exhibitions

Table 4.20: Leading UK Marketing Magazines, July 2007-June 2008

5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

6. Buying Behaviour

Trends in Direct Mail Advertising Expenditure

Table 6.1: Direct Mail Advertising Expenditure by Product Category by Value (£000 and %), 2006-2008

7. Current Issues

overview

8. The Global Market

LEADING GLOBAL AGENCIES

Table 8.1: Top Agencies for Direct Marketing as Listed in The Won Report, 2008

Table 8.2: Top Countries for Direct Marketing as Listed in The Won Report, 2008

Direct Marketing Associations

9. Forecasts

INTRODUCTION

The Economy

Population

Table 9.1: Forecast UK Resident Population by Sex (000 and %), Mid-Years 2009-2013

Gross Domestic Product

Table 9.2: Forecast UK Gross Domestic Product in Real Terms (%), 2009-2013

Inflation

Table 9.3: Forecast UK Rate of Inflation (%), 2009-2013

Unemployment

Table 9.4: Forecast Actual Number of Unemployed Persons (million and %), 2009-2013

FORECASTS 2009 TO 2013

Table 9.5: Forecast Total UK Market for Direct Marketing by Channel by Value at Current Prices (£m), 2009-2013

Market Growth

Figure 9.1: Growth in the Total UK Market for Direct Marketing by Value at Current Prices (£m), 2006-2013

FUTURE TRENDS

10. Company Profiles

DIGITAL MARKETING GROUP PLC

Proximity London Ltd

11. Further Sources

Associations

Publications

General Sources

Government Publications

Other Sources

Key Note Sources

Abstract

Is direct marketing recession proof? The industry showed steady growth up until the end of 2007, when, according to the Direct Marketing Association's (DMA's) Economic Impact Analysis, the direct marketing industry was worth £18.34bn.

2008 saw the beginning of the economic downturn, which accelerated throughout the year and resulted in an economic recession in 2009. The worst-hit sectors have been manufacturing, especially the motor trade, construction and retail, with many retail brands disappearing from British high streets.

As a consequence, marketing budgets continued to be revised downwards during 2008 and budgets for 2009 have been set lower than in previous years, which means that clients are demanding better results for less. Direct marketing, by its very nature, means that it has always been able to deliver measurable results and is much closer to the sales process than brand awareness advertising. Therefore, budgets are being directed towards direct marketing and — strengthening the trend that was already in place before the recession — being directed towards digital direct marketing in particular.

Digital marketing occupies a middle ground between direct marketing and display advertising, and agencies on either side (or, in traditional terms, above and below the line) offer clients digital marketing services, meaning there is a certain amount of crossover in this area.

Direct marketing agencies have evolved into integrated agencies, with some increasing their capabilities to offer fully integrated campaigns with the creative expertise to offer integrated advertising and direct marketing campaigns. In some cases, these agencies are displacing the leading advertising agency, which for many years forced direct marketing into the position of the `poor relation' in the marketing sector. Digital marketing has changed that and new marketing communications groups have formed, built around a series of key acquisitions, each with its own particular specialism.

2008 saw these groups beginning to consolidate, and it is likely that 2009 will see further consolidation as skills and experience are brought together to compete with the larger and more experienced full-service agencies for the most lucrative briefs.

Direct marketing employs a number of channels to deliver the sales message. The traditional channels of direct mail, inserts, door drops and telemarketing have been in decline in recent years, although direct mail has continued to take the largest share of the direct marketing wallet. However, with the larger finance companies (the largest users of direct mail) cutting back on spending and moving to a digital approach, there are consequences for those agencies — and their suppliers — working exclusively in these channels. Nevertheless, most are adapting, and it is this ability to quickly understand how the new media can be used to best answer their clients' briefs that makes the more flexible direct marketing sector virtually recession proof.

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