Direct marketing influences $90B in UK economy

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The UK economy is flourishing thanks to the direct marketing industry, according to a new study by the DMA UK called "The Economic Impact of the UK Direct Marketing Industry."

The report found that $89.95 billion of the economy is affected by the direct marketing industry, which has grown its employment by 9.5 percent since 2004 to 886,000, representing 3.1 percent of total UK employment.

"The growth shows a happy picture in terms of importance to the UK," said Robert Keitch, director of Media Channel Development at the DMA UK. "We are seeing early signs of the market starting to grow into other areas and new channels."

The report found that the total value of consumer and business sales generated by direct marketing to be $257.3 billion with consumer sales estimated to be $148.2 billion, more than 9 percent of total UK consumer spending.

The report also highlights the increase in the proportion of sales accounted for by the Internet, increasing nearly fourfold from $28.8 billion in 2004 to $107 billion in 2006, while sales attributed to direct mail are estimated to be $35 billion.

While both business-to-business and business-to-consumer direct marketing expenditure has increased over the past two years, the increase in business-to-consumer has been faster at 18.9 percent compared to 11.8 percent for business-to-business. This overall growth is reflected in the expenditure on direct marketing budgets which rose by 16.2 percent from $29 billion in 2004 to $33.75 billion in 2006.

The report also reveals the proportion of direct marketing expenditure budgets allocated to different channels. Direct mail accounts for the largest proportion of all expenditure at 26.1 percent with Internet advertising and e-mail combined representing 21.5 percent.

"There seems to be a slight drift from direct mail to other channels like e-mail for acquisition purposes," Keitch said. "We are also seeing more testing and experimenting overall in new channels like mobile and e-mail."

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