Ireland's DM Direction
As an Irishman I despair when I think that one of the above is the image an American colleague may have of this great country I call home. Neither image is correct, although, I would actually say the Hollywood one is the more accurate of the two.
Let me paint a truer picture of Ireland for you, a picture of the Celtic Tiger. The Irish economy is booming. With 1999 growth in GDP of around 8 percent and projected growth this year of 7.5 percent, it is one of the best performing economies in the industrialized world.
Large multinationals, the majority of them American, are relocating to Ireland, choosing it as the base for their European operations. The well-educated and young labor force, beneficial tax packages and the excellent quality of life and standard of living have attracted them. This influx of investment combined with the efforts of the local talent has resulted in a very high-tech Irish economy full of opportunity.
All this is great news of course for the local direct marketing industry. It has boomed along with the economy. From 1983 to 1994 the industry grew by more than 900 percent and it has continued to grow by an average of 15 percent to 20 percent annually ever since, to become the country's fastest growing marketing discipline. Direct marketing currently accounts for approximately 29 percent of Ireland's total media expenditure.
While the volume of direct mailings per capita has risen steadily over recent years, the present statistic of a paltry 26 items per capita per annum shows that there is still tremendous room for growth. Conversely, it is probably because the Irish people are so under mailed that the industry enjoys such good. From 2 percent to 7 percent is the norm for consumer direct mail.
Another reason why the industry enjoys such good response rates is undoubtedly the quality of the campaigns. What direct marketing in Ireland lacks in size it definitely makes up for in quality. This is borne out by the success of Irish direct marketers in international competitions. They have won several Best of Europe and International Echo awards, including a gold and silver Echo in 1999.
Direct response TV and related media are also well favored by the availability of the high number of call centers. Indeed, Ireland is often referred to as the call center capital of Europe. That said, telemarketing penetration in Ireland is relatively small and at last count spend was at just over 15 percent of the value of direct mail.
It is largely because of this growth in DM that I had the honor of being recently appointed the first fulltime CEO of the Irish Direct Marketing Association. The IDMA, although small when compared to other DMA's, is very active and represents a very strong and vibrant membership. It has done much to enhance the professionalism of all aspects of DM in Ireland.
Among other things, the IDMA has introduced a primary code of practice for direct marketers, a Telemarketing Code, Europe's first Code for List and Database Owners/Processors (Data Protection), a Telephone Preference Service and a Mail Preference Service.
While the growth of DM in Ireland over the past decade or so has been exponential, I would suggest that this is only the tip of the iceberg for what is to come.
There is no doubt in my mind as we enter the new millennium that DM is about to become Ireland's and the world's dominant form of marketing. The future will be about accountability, responsibility and measurability and DM is the marketing discipline best equipped to deal with this.
The future will also bring many challenges for direct marketing. New technologies, new media, new competition, potentially a new regulatory environment and above all a more educated and discerning customer also mean a more demanding and challenging environment than ever before. Are you up for it? In Ireland we are raring to go!
across Germany with each representative responsible for handling about 20 agencies and their clients. Inside sales are done through a call center in Dublin.
"We've just launched a pan-European facility to handle small accounts of a few thousand marks or to deal with people who don't want any contact with our reps. They say it's okay to call but God help you if you visit us. For them Dublin is ideal."
Groth started the business in Hamburg because it is Germany's media capital and home to most of its multimedia agencies. "But I knew from the start that given Germany's crazy geography we would need two or three other sites."
Major cities have different profiles, he explained. Duesseldorf is a telecom center and has the largest concentration of traditional agencies with a growing number of online media planners on staff.
Munich is rich in hardware and software companies and a good place from which to conduct business in Austria and Switzerland. Duesseldorf and Munich offices, accordingly, were opened in 1998.
Frankfurt, the country's financial center, opened up for DoubleClick when the company acquired NetGravity which had offices nearby. "That gave us a complete north-south axis."
He described the growth of online sales volume in Germany as "frantic." It was 17 million Deutschmarks in 1997 (then worth about $10 million) and DM 50 million last year.
"We're looking for DM 150 million ($78.9 million at today's far higher dollar exchange rate) this year." The industry should hit sales of at least DM 400 million in 2000, although Groth does not rule out DM 450 or even DM 500 million.
"We're under incredible pressure. We have to grow more quickly than our competition and we have to be a lot better."
Growth does not seem to be a problem. Every week Groth gets 10 queries from sites who want DoubleClick to market them, often sites that don't exist yet and can only offer a business plan.
The company started from scratch in Germany with Groth alone in an office trying to establish a firm nobody knew. "Oh people had heard of it but they thought it was a high-tech company, not a marketer. Even the trade press didn't know us."
Staff age helped. "We're older in Germany," Groth, all of 34, said, "because when we finish our studies we're older than the Americans - 26 to 28 while they are 23 or 24. On average our staff ranges from 27 to 33 and it has a lot of experience."