The direct marketing industry is set to grow by 7% in 2012 to be worth over £15bn, according to industry body the DMA, which cites the continuing growth of digital channels as the main driver.
But there is a nasty sting in the tail, with claims that the new EU data laws could cost each businesses over £76,000 to implement, and result in a staggering £47bn hit to the UK economy.
According to the inaugural “Putting a price on direct marketing” study, UK businesses spent £14.2bn on DM in 2011 and forecasts expenditure to increase in 2012 to nearly £15.2bn.
The main beneficiaries will be digital channels. Companies predict their investment in email marketing will grow by 11.9% to £2.5bn, social media marketing expenditure will rise 8.1% to £2.2bn and total Internet search advertising spend will increase 6.3% to £516m.
Elsewhere, the report reveals that UK companies on average attribute 23% of their total sales to direct marketing, with this rising to 32% for the travel and leisure sector, 30% for the retail and wholesale sectors and 28% for the financial services sector.
The study also reports a projected increase in the number of people employed by the direct marketing industry. Total industry headcount in 2011 topped 530,000 workers in 2011; this is expected to rise by the end of 2012 with 23% of telecoms and utilities, 15% of business and professional services and 12% of financial services companies expecting to add extra DM personnel.
The report includes estimates of the expected cost to businesses of the forthcoming EU Data Protection Regulation, the draft of which was published in January of this year. According to the businesses polled the average cost per company through lost sales and additional costs caused by the Regulation could potentially reach £76,000, or £47bn for the UK economy. Claimed to be the most comprehensive study into the economic impact of the UK’s direct marketing industry to date, the findings were based on interviews conducted by the report’s authors who polled 600 businesses selected to represent UK businesses as a whole.
Commenting on the findings Chris Combemale, executive director of the DMA, said: “While the UK remains mired in a protracted recession, the creative industries are among the few that are performing strongly, with direct marketing in particular making an outstanding contribution to the UK economy.
“The industry is bucking the prevailing trend with increases in overall expenditure and employment figures forecast for 2012.
“As the report demonstrates, the Government must make every effort to ensure the industry can continue to play its part in dragging the UK out of recession.”
