An analysis of 600 companies commissioned by the trade body claims almost a quarter (23%) of all sales last year were attributable to DM.
The report, which classifies direct marketing as any channel that uses personal data for one to one communication (see below), claims £14.2bn was spent on DM in 2011. Investment is forecast to be 7% higher in 2012, the report claims.
Growth will be driven by digital direct channels. Spend on email marketing is tipped to rise 11.9% to £2.54bn, while internet search spend will increase by 8.1% to £2.3bn. Spend on direct mail and door drops will grow by just 2.07% in 2012, the report says.
The DMA hopes by valuing the industry’s worth, its lobbying efforts in Westminster and Brussels will be strengthened. The Association is pushing hard for changes to EU proposals on data protection that will require brands to gain explicit consent from consumers to use their personal data for campaigns.
The report estimates that the proposals will cost each company £76,000 in lost sales, which will leave a £47bn hole in the UK economy.
Elsewhere, the report estimated the DM industry supports 525,000 jobs spread evenly between in-house specialists, service providers and others that depend on the success of the industry.
The “putting a price on direct marketing” report is part of a concerted effort by the DMA this year to boost the standing of the industry. In June, it launched a campaign to showcase the creative possibilities the channel offers marketers.
The report was carried out by Future Foundation on behalf of the DMA. It was based on interviews with executives from each of the companies, chosen as representative of all sectors except for the public sector.
Direct marketing-generated sales, sector-by-sector
Travel and leisure 32.10%
Retail and wholesale 29.70%
Financial services 28.18%
Telecommunications and utilities 22.11%
Charities / other services 21.49%
Business / professional services 19.73%
Primary manufacturing and construction 14.60%