Bellwether gloom: Reasons to be cheerful parts 1 to 6

Mike Fox. Founder UKChangesWith the latest IPA Bellwether Report showing direct marketing budgets being revised down by the lowest level (-9%) for more than a decade, many people in the sector would be forgiven for heading to the nearest pub to drown their sorrows.
However, as an industry we have had to put up with much worse and have always been optimists.
So, ditch the negativity and get a spring back in your step by feasting on my very own reasons to be cheerful part one to six and you will soon be back on the bright side of the road.
1. The political and economic outlook are continuing to affect general business confidence and until there is a clearer idea of the UK’s future all organisational spend is under review. This is evident in the fact that marketing budgets in general have flatlined. However, historical trends show that once uncertainty has passed budgets will be revised back up.
2. Analysis of the Bellwether shows that organisations are in a period of brand building in the face of continued Brexit misery. However, eventually marketing objectives will shift back to retention and acquisition which play to the strengths of direct marketing techniques.
3. Unsurprisingly, GDPR continues to have an impact on direct marketing spend and the industry was expecting a significant drop in volume, so downward revisions of budget come as no surprise. The fact that direct marketing has not sunk to its lowest ever level (c.2005 and the summer of discontent) shows that, although there is a way to go to recovery, it is not insurmountable.
4. GDPR is having a positive impact on direct mail, as while volumes have reduced, targeting has significantly improved, resulting in impressive campaign ROIs. So while organisations might be revising their budgets down, this is volume reduction not a reduction in campaign activity.
5. Perception of direct mail among consumers is on the rise. The days of scatter bombing are well over to the point where Millennials and Generation Z actively welcome mail of any kind due to the novelty value of not receiving an email or push notification. Mail remains the only tangible medium and as a result it will always have a legitimate place in the marketing mix. Moreover, client interest in the medium is returning, given the uplift in ROI we are experiencing as a result of reduced volumes, permission marketing and better targeting.
6. The Bellwether definition of direct marketing only includes direct mail, email, telemarketing, door-to-door, catalogues and SMS. As a result of the Information Commissioner’s Office crackdown on rogue calls, email and SMS, many high volume sectors such as financial services have cut back their activity for fear of falling foul of the regulator. Meanwhile, the catalogue sector hasn’t exactly been flying of late. Therefore the 9% reduction is not just accounting for mail.
So there we have it. The Bellwether may certainly not something to celebrate, but equally it isn’t as bad as it first might seem, either.

Mike Fox is founder of UKChanges

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