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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