FEDMA Survey Finds Strong DM Growth in Europe

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Total DM spending in the European Union in 1999 totaled more than 42 billion euros ($36.8 billion at current exchange rates of about 90 cents) with direct mail accounting for the lion's share -- 26.5 billion euros.

These were some of the findings published in the Federation of European Direct Marketing's 2000 survey of DM activities in the European Union. The survey analyzes 1999 data, the latest available.

It is FEDMA's sixth annual study of Europe's direct marketing industry, a continuity that, FEDMA said, "allows us accurately to follow the development of the sector."

Total DM spending in the 14 countries surveyed was up 11 percent over 1998. Germany was clearly in the lead, with its DM expenditures -- direct mail, teleservices and the Internet -- totaling 12.27 billion euros ($11.04 billion).

That's almost double the 6.44 billion euros spent in France and about 50 percent more than the United Kingdom's 8 billion euros. Italy -- which ranks third or fourth among Europe's economies, depending on how the economy is measured -- still lags in DM spending with 1.9 billion euros.

That's less than Spain's 2.68 billion and nowhere near the Netherlands' 7.25 billion, by far the largest in Europe when measured on a per capita basis. The Netherlands has 15 million inhabitants.

Dramatic growth began in 1994, with total DM spending in the five subsequent years rising by 47 percent overall -- 35 percent for direct mail and 67 percent for teleservices, both of which were virtually nonexistent in many nations in 1994.

Among Europe's smaller markets, Austria had DM outlays in 1999 totaling 1.1 billion euros, compared with 706 million euros for Sweden and 655 million euros for Belgium. Those figures are incomplete, however , since all three countries are major call center markets and data for teleservices for those countries were unavailable.

Differentiations among the three surveyed forms of DM become clearer when the larger markets are compared. Germans spent 8.3 billion euros on direct mail, leaving another third for Internet and teleservices sales.

In Holland the difference was even more dramatic -- the Dutch spent 2.14 billion euros on direct mail out of a total DM spend of 7.25 billion, a clear indication of how much more important Web and teleservices sales are in that market.

Indeed, the Netherlands accounted for more than a third of total EU teleservices sales -- 5.1 billion euros out of 13.8 billion euros. Add the UK with 4.5 billion euros, and the Dutch-British spending accounts for three-quarters of teleservices spending.

Ireland, which spent billions building a state-of-the-art telecom system in the early '90s to attract foreign companies engaged in telesales, had revenue of only 22 million euros from telesales.

One likely reason is that Ireland began to shift away from call centers in the late '90s to higher tech services and to attract companies that handle their own teleservices rather than outsourcing them.

Online expenditures are clearly the fastest growing and show no sign of slowing in Europe despite the dot-com meltdown in the United States. Again, however, FEDMA's data are incomplete.

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