With the success of Team GB giving the nation a warm glow, it may be tempting to brush the current economic doom and gloom, and legislative threats under the carpet.
After all, it’s at least two years before the next shake-up of data laws – the EU’s proposed data protection regulation – reach the UK statute book, so what’s all the fuss about?
Luckily, in the DMA, the direct marketing industry has a trade body which is as focused on flying the flag for ‘Business GB’ as Sir Chris Hoy is for Team GB, even though the man leading our charge – DMA executive director Chris Combemale – actually holds joint French/US citizenship.
The release of its “Putting a price on direct marketing” report is designed to build a detailed picture of just how influential direct marketing is on the wider economy and forms a major part of the trade body’s lobbying efforts against the proposed directive.
And it shows the industry – and the economy as a whole – has much to lose if Brussels gets it way. According to the DMA’s estimates, the directive will leave UK businesses with an annual £47bn hole in their pockets in lost sales and additional costs.
Obstacles on the road to growth
At a point when the UK economy has little prospect of returning to the pre-recessionary boom times in the immediate future, the DMA maintains it would be counter-productive to place obstacles on the road back to growth.
The direct marketing industries figures make it impressive reading. In terms of budgets, DM spend in 2012 will be 7% higher than it was in 2011, with the study’s respondents seeing future growth being driven by increased spending on digital channels.
Companies predict their investment in email marketing will grow by 11.9% to £2.5bn, social media marketing expenditure will rise by 8.1% to £2.2bn and total search advertising spend will increase by 6.3% to £516m.
This is supported by studies in other areas of the marketing communications industry, by organisations such as the IPA and the IAB, as well as the Government’s own figures which estimated the new Internet economy to be worth £121bn in 2011.
DM accounts for quarter of all UK sales
When it comes to sales, the companies surveyed attributed nearly a quarter – 23% – of their sales turnover to direct marketing. When extrapolated to all UK businesses, the DMA claims this is equivalent to sales of £700bn out of a total national figure of £3trillion.
The volume of sales attributed to DM is highest in the travel and leisure, retail and financial services industries – key powerhouses of the consumer economy. Even the manufacturing industry, which is not typically associated with using direct marketing, attributes 15% of its sales to the practice.
The employment figures are also striking. Direct marketing directly and indirectly employed 530,000 UK jobs in 2011 – nearly 2% of all working adults.
This compares favourably with the employment figures of a number of other key sectors in the UK economy, such as civil service 489,000, agriculture 500,000 and publishing 243,000.
Need to protect consumer privacy
Yet the DMA believes this could all come crashing down should the EU data laws be implemented in their current form. The trade body concedes the need to revise pre-Internet era legislation to protect the data privacy rights of individuals in the 21st century, but stresses the regulation needs to be formulated “in a way that doesn’t result in undesirable, unintended consequences for individuals or businesses”.
Chris Combemale said: “While the UK remains mired in a protracted recession, the creative industries are among the few that are performing strongly. Direct marketing in particular is making an outstanding contribution to the UK economy.
“The draft EU Data Protection Regulation has been designed to update legislation conceived in a pre-Internet era to protect the data privacy rights of the web-connected consumer. While it’s necessary to bring data legislation in line with the demands of the 21st Century, it must not come at a cost to business.
“In its current form, the draft regulation singularly fails to do this. Our findings clearly highlight what the UK stands to lose through the burden of unnecessarily onerous data legislation that does not protect the free exchange of information between consumers and businesses.”
There may be no gold medals on offer, but this is a contest in which ‘Business GB’ simply can’t afford to come in second…