£17.5bn DM outpaces GDP by 250%

The UK direct marketing industry is growing nearly three times faster than the UK economy, according to a detailed study by Key Note which says the sector has increased in value from £16.5bn to £17.5bn in the past year alone.
The UK’s economy grew by 2.6% last year, figures from the Office for National Statistics (ONS) show, but inched up by only 0.5% in the final three months.
The DM sector, however, is enjoying a period of strong and sustained growth, with the overall value of the market estimated to have increased by a further 6% in 2014, although perhaps less surprisingly it is being driven by the surge in digital and technology.
This 6% growth follows on from an 8.6% rise on 2013, and shows just how bullish the DM sector remains.
The report’s definition of direct marketing is much wider than the likes of the IPA Bellwether or the recent Advertising Association/Warc study, although the study does include figures from both these organisations, as well as the DMA, the IAB (UK) and Ofcom.
Its definition includes display advertising in newspapers and magazines, direct mail and door-drops, email, digital search advertising, telemarketing, mobile marketing, social media campaigns, outdoor and DRTV, among others.
But, says Key Note, with the level of digital penetration in the UK advertising market among the highest in the world, it is creating new opportunities for the DM industry.
This has offset the decline in print newsbrands and print magazines, both of which have recorded falling revenues for some years, including in 2014.
However, the report does strike a note of caution, despite growth rates in annual adspend being been positive between 2010 and 2015, these increases do tend to move in tandem with GDP growth patterns.
It concludes: “As such, the forecast slowdown in GDP growth between 2015 and 2019 may suggest that slightly more testing market conditions will be present for direct marketers, although annual growth rates will still be positive.”