Don’t let price arrest DM’s progress

/k/y/v/Russell1.jpg

The IPA’s quarterly temperature taking of the marketing industry underlined what direct marketing’s cheerleaders had been saying for some time: DM is flourishing in these straitened times. Its success, however, could come under threat if a series of portentous warnings about the impact of proposed changes to the regulation of mail services are to be believed.

The pressure to manage costs has led to a shift away from investment in traditional media campaigns towards direct and digital channels, Bellwether found.

Direct marketing and sales promotion spend increased by 0.6% as investment in internet advertising and search rose 13.4% and 14.9% respectively.
Conversely, spending on traditional media such as TV, press and radio dropped 0.2%.

This is no short-term trend. Previous quarters painted a similar picture as consumer facing brands looked to direct marketing for short-term volume increases to offset weakening consumer confidence.

This is a fillip for DM and should be used to stake a claim for its future use. Direct marketers, however, face difficulties that could stunt its recent growth.

Last week, saw new postal services regulator Ofcom publish non-confidential responses to its consultation on the future regulation of the Royal Mail.

To recap, out of a host of proposals, one prompted universal ire among those that have an interest in the future success of direct mail.

The price controls Ofcom proposed, that have restricted Royal Mail from setting higher charges for delivering bulk advertising mail, should be removed in return for the promises of improved efficiencies on the part of the postal operator.

Removal of the controls would deter those taking advantage of the cost effectiveness of mail from returning to it in the future, detractors argue, while those in favour (Royal Mail) say that it is necessary to allow the orgnaisation to increase revenue and stay afloat.

The plans were immediately denounced by interested parties such as the Direct Marketing Association, entirely predictably.

However, direct mailers themselves are now publically warning about the cost of removing restrictions. Nationwide Building Society, as one of the UK’s biggest financial services firms and by definition, therefore, one of the biggest direct mailers, said in its response that recent and future plans would only hasten “acceleration of projects to communicate with customers through other channels”.

I wager that Nationwide is not alone in its industry or among those that use advertising mail extensively.

Ofcom needs to heed such warnings before rubber stamping proposals. Royal Mail should not be able to price hike the channel out of marketers’ minds. It is through modernisation and efficiency improvements that Royal Mail will succeed and only then can it justify price increases.

If this does not prove to be the case, then the improvements observed by Bellwether may prove to be a blip.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here