It Pays to Be Direct! A Sneak Peek into the Direct Marketing Industry in the UK

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It is aptly said, “There are only three kinds of lies – lies, damn lies & statistics. If one believes blindly in statistics, then the report by the Direct Marketing Assiociation titled, “The Economic Impact of the UK Direct Marketing Industry”, which states that $89.95 billion of the economy is affected by the direct marketing industry would have you brimming with optimism. The employment scenario in the industry has also been bright; with growth rate scaling up to 9.5% from 2004 to 886,000, a figure quite impressive, when one considers it represents 3.1% of total employment in UK. However, the scenario is not all idyllic as the figures seem to suggest. Direct marketing in the UK is wading through difficult times, with tremendous challenges as well as alluring opportunities. One of the critical considerations is the increasing paranoia and irritability of the general public with the idea of their privacy being intruded. Added to that are options like the Mailing Preference Service. It is a provision whereby consumers can opt out of receiving direct mail from participating companies. This database has grown steadily with around 600,000 new registrations every year. Marc Michaels, Director of Direct & Relationship Marketing, COI Communications, also Chairman of ISBA’s Direct Marketing Action Group, in an exclusive interview to 4Ps B&M, feels data availability is a huge problem, “People are getting very demanding with security issues & data protection. Therefore the task at hand for companies is to personalize & make data relevant. However, in order to do that, they will need data in the first place. So it becomes a vicious circle.” This is not all. There are challenges from the ever growing presence of the internet and other more personalized models of marketing. With the customer being in a position of indomitable strength, this has led to a shift towards ‘Propensity Modelling’, which draws inferences about tastes & needs of the customer from raw data. However, these are, at best, inferences and are quite likely to be flawed. So a whole lot of marketing budget goes down the drain. And this is one of the challenges that Marc perceives, is facing the DM industry in the UK as he states, “I have not seen very interesting DM campaigns happening of late. Organizations like Lloyds TSB seem to have been successful at figuring out the evaluation and effectiveness parameters but then, there are a whole lot of them who are clueless.” There also appears to be a serious lack of understanding on the part of direct marketers and practitioners within the industry about legislative issues. According to other primary research conducted in the sector, campaign management and analysis have also been responsible in making a big dent in the deliverables and profitability of a great many direct marketing campaigns. The other equally significant task at hand is the maximization of the ROI on IT investment. While the underutilization has been largely due to lack of appropriate tools, one can not turn a blind eye to the skills shortage on the part of marketing practitioners. The task becomes all the more daunting with a whole array of marketing channels available; corporations are increasingly on the prowl for winning channel and campaign combinations. If direct marketing has to retain its sheen then marketers will have to become more hands on with technology and software applications.But when it comes to business, numbers rule the roost and the cash registers in the DM industry are still ringing. It is just a matter of direct marketers putting their running shoes on!

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