The direct marketing industry is being urged to “redouble its efforts” to promote the benefits of direct mail to UK businesses after Royal Mail results showed a worrying decline in revenues for the medium.
Although the firm blamed Brexit uncertainty, marketing mail revenue, which includes the firm’s data businesses, declined by 8%; included in that was a 3% fall in unaddressed letter volumes.
The results statement said: “We are seeing the impact of overall business uncertainty in the UK on letter volumes, in particular, on advertising and business letters. Marketing mail is sensitive to changes in economic activity.”
It was quick to point out that “other forms of advertising, particularly print media, have seen steeper declines”, adding that print advertising had seen a 13% decline in revenues.
And any hope that the General Election would bring in extra revenues have also been quashed, with the company admitting that “given the short run-up, it is likely to be lower than in 2016-17”.
Overall, the rise of online shopping saw profits jump 25% due to growth in its parcel delivery business. Pre-tax profits rose to £335m in the year to 26 March from £267m, while revenues grew 1% to £9.8bn.
However, it did big up the efforts of its business division, Royal Mail MarketReach, which it said is “demonstrating the positive impact marketing mail can have on campaign results”, as well as its role in the Strategic Mailing Partnership.
One source said: “As an industry, direct marketing is still heavily reliant on a strong direct mail market. With digital marketing still growing – despite the serious issues over accountability, ad placement and measurement – the entire direct mail market needs to redouble its efforts to ensure the message is getting across that mailshots are among the most effective means of cutting through the online clutter.”
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