Direct mail budgets hold firm as adspend hits £22.2bn

Direct mail continues to prove its mettle within the UK marketing mix, helped by a strong performance in Q3 2017, as total adspend defied Brexit uncertainty to grow 4.6% to reach a record £22.2bn last year, according to the latest Advertising Association/Warc Expenditure Report.
Direct mail spend topped £1.75bn for the year, up just under 1% in total, despite putting in its strongest performance for nearly six years in Q3 2017, growing by 5.9% over the same period in 2016.
However, the figures do not include other areas of physical mail, such as unaddressed letters, leaflets and door-drops, which would push total budgets way over the £2.2bn mark.
It remains the third largest medium behind Internet, which grew 14.3% to £11.5bn, and TV, which declined 3.2% to £5.1bn.
The report forecasts that the direct mail market could decline 4% this year, even though many are predicting a resurgence in the sector due to looser regulation of postal data under GDPR. Many are also hoping for big things from the recent launch of the Jicmail measurement scheme.
The full year advertising growth forecast for 2018 has also been upgraded by 1.4 percentage points to 4.2% growth, and a further rise of 3.8% is expected for 2019. If proved correct, this will complete a decade of continuous expansion for the UK advertising industry.
Advertising Association chief executive Stephen Woodford said: “These very impressive adspend figures demonstrate the strength and resilience of the UK advertising industry over the course of 2017.
“The results also reflect wider trends within the UK economy over recent months, with inflation at its lowest for a year, reducing pressure on real wages, strong employment statistics, and the recent upgrade by the IMF of its economic growth forecast for the UK for this year.”
Looking more closely by sector, digital formats performed well across the board over the course of 2017, up 26.3% for digital radio, 19.3% for national digital newsbrands, 7.1% for broadcaster video-on-demand and cinema recorded growth of 3.3%.
Warc data editor James McDonald added: “The latest verified results illustrate a dynamic market, one which has now expanded for 18 consecutive quarters. Mobile continues to underpin growth – over 90% of additional mobile investment was directed towards search and social media in 2017 – yet there was vitality across the wider industry.
“Radio and cinema both recorded their fourth successive year of rising spend, while the out of home market expanded for the eighth year running. Further, we believe TV’s dip, caused mostly by reduced spending within the consumable goods category, is anomalous, and expect the channel to rebound this year thanks in part to the summer’s World Cup.
“Robust macroeconomic conditions and the continuation of 2017’s media trends reinforce our brighter outlook for market growth this year and next.”