Keep calm and carry on

Russell Parsons

So, after an economy defying 2010, it seems that the UK advertising sector will be dragged back in line with considerably less stellar growth from UK PLC. Such a climate, however, provides direct marketing and marketers an opportunity to shine amid wider economic malaise.

Last week, the Advertising Association/WARC report confirmed that the advertising sector returned to pre-recession levels in 2010. Spend grew 6.9% last year, outperforming economic growth – which slipped to less than 1% in the final quarter – considerably.

The champagne, however, was immediately put on ice when in the same report it was forecast that outlay in 2011 will grow by a less impressive 2.9%.

Marketers, it appears, are battening down the hatches this year as uncertainty over the state of the economy persists. You do not have to be an economist to work out why.

Much as the Chancellor George Osborne talked up his second budget last week as one that would kick-start a flagging economy – indeed it was well received by business leaders buoyed by its enterprise measures and reduction of corporation tax – it was the downward revision of his growth forecast (now tipped to be 1.7% in 2011 and 2.1% next year down from the 2.1% and 2.6% predicted in November) that will have arrested the attention in many boardrooms.

The buoyancy seen in the advertising market in 2010 betrayed the cautious optimism pervasive everywhere else. It seems 2011 will be the year that the synergy between ad spend and the state of the economy will return.

So, what of the opportunities for direct marketers I suggested up top? Well, beyond the headline figures reported in the AA/WARC report, even better news can be found for direct marketers. Direct marketing outperformed all other channels last year, registering a dizzying 12.7% growth.

This provides DM with a strong base to stake its claim in an environment of continuing uncertainty.

It is clearly a growing medium and one with substantial scope to accelerate further. More than half of the UK’s biggest 3,000 advertisers do not use direct mail.

Media owners such as Royal Mail, therefore, have an opportunity, while direct marketers have the chance to make the case for the cost efficient, targeted and effective channel in an environment that will demand that marketing activity has to tick all of these boxes to be green-lit.

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