DM winning out amid gloom

Russell Parsons

Emerging from the gloom that descended on UK PLC last week was a ray of sunshine for direct marketers; the channel appears to be bearing up well while others falter.

First, respected think tank Centre for Economics and Business Research revised its growth forecast for the UK economy down, from 1.3% to 1.1%, and if that wasn’t enough of a bummer, added that the UK economy faced a 20% chance of slipping back into recession.

The outlook blackened after it emerged retailers were suffering from the same January blues that blight their customers with Tesco, Dixons and Halfords among many high street names reporting worse than expected Christmas trading.

Closer to home, marketing industry barometer the Bellwether Report found a net balance of marketers forecasting their budgets were going to be less this year, while companies were less than chipper about the prospects for their own industries.

Chris Williamson, chief economist at Markit and author of the report, punctuated the pessimism by offering this rather stark assessment of the findings:

“The Bellwether highlights the bumpy road of recovery that the UK economy is travelling along, and sets the scene for a difficult year ahead.”

Blimey, not the news that anyone wanted to hear, especially as we are still dusting ourselves down after the financial convulsions of two years ago.

But now for the good news! Read on from the Bellwether’s top line and you will find that direct marketing, that traditional mainstay of the marketing mix, is tipped to become increasingly prominent this year.

Use of the channel will increase in 2011, while total employment of marketing disciplines is expected to slump by 5.4%. Online and search marketing are the two other notable risers.

Elsewhere, it emerged that Nissan is planning to eschew the one night stand above the line campaign approach in favour of a take it slow CRM-led campaign to drive sales of its new Micra.

The reason is simple, while fear and uncertainty is abound, and budgets remain under scrutiny, then marketing chiefs under the watchful eye of finance directors opt for surety.

Direct response channels such as DM and digital offer accountability and targeting at, relatively speaking, less cost. All boxes that cautious companies unsure about the impact of the VAT increase and rising unemployment require ticking.

There have been several predictions that 2011 will be the year traditional media returns to the fore, regular columnist for this newsletter Mark Thomson, media director at Royal Mail said as much last week (perhaps hopefully, given the stake his company has in this being the case).

Marketing and finance chiefs are being cautious at the moment as uncertainty over the state of the economy prevails. They are making the right choice in opting for what they know best but they must also be bold by remaining flexible and innovative.

That’s the thing with uncertainty, nobody knows for sure what the future will bring.

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