| KN74063 |
| KEY NOTE DIRECT MARKETING : March 2003 |
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This report covers: National & Regional Newspapers, Field Marketing,Telemarketing,direct marketing, junk mail, data wastage, directmail complaints, postal changes, recruitment, advertising agencies, directmarketing support providers, fulfilment houses, full-service agencies,telemarketing companies, The UK Market, The US market, The Indian Market, The Southern African market, The Chinese Market, The Australian Market,
Companies covered include: Carlson Marketing Group, EHS Brann, Joshua Company, MRP Partners Worldwide, Proximity London, Tequila London, WWAV Rapp Collins, Hays Customer Solutions, Taylor Nelson AGB, Fulfilment Houses,Consignia/The Post Office, Flostream, Mail Solutions, Jordan & Company International, Contract Publishers, Centurion, Haymarket Magazines, John BrownCitrus Publishing, Premier Magazines, Redwood Group, CACI, Dudley Jenkins,Keywords Direct, Mosaic Business Solutions, Countyweb, Freeserve.Com, AmericaOnline Incorporated, British Telecommunications, Virgin Net, Microsoft, Yahoo,Lycos UK and Ireland,
EXECUTIVE SUMMARY
The UK direct marketing industry is growing steadily, even though the global advertising industry as a whole is being affected by continued stagnation. The market grew by 14.2 percent between 2000 and 2002, and is now worth £11.56bn.
The industry continues to benefit from the perception that direct marketing techniques have a more quantifiable and direct effect in terms of sales. Growth can also be explained by the fact that companies are now developing marketing strategies that utilise widespread techniques across different fields, and do not concentrate on particular communication channels. Telemarketing continues to lead the market, with direct mail maintaining its position as the second-largest sector in the market. Additionally, direct marketing across radio and new media is showing strong growth.
Alterations to the UK postal system at the end of the Royal Mail's traditional monopoly are affecting the direct mail sector of the market. EU-based legislative developments will also influence direct marketers to use information on consumers, especially for campaigns that utilise short messaging services (SMS) and e-mail. Changes to the use of the electoral register that seek to balance privacy and commercial interests will also influence the industry. Consolidation between companies and the analysis of consumer behaviour, will be key trends in the future. The task of measurement continues to be a challenge, owing to the diversity and disparity of the sources used. However, the interest in the industry and its contribution to the competitive position of the UK is growing and there is some hope that more investment in research will become a feature of the industry as it matures. The direct marketing industry can look forward to a positive future outlook. However, a number of key economic factors could affect its future development, such as the economic uncertainty in the UK and the possibility of a continued slowdown in the global economy, and these could hamper the progress of the industry.
TABLE OF CONTENTS
| Executive Summary 1 |
| 1. Market Definition 8 |
| REPORT COVERAGE 8 |
| MARKET SECTORS 8 |
| TYPES OF COMPANY 9 |
| Advertising Agencies 9 |
| Direct Marketing Support Providers 9 |
| Fulfilment Houses 9 |
| Full-Service Agencies 9 |
| Telemarketing Companies 9 |
| MARKET TRENDS 10 |
| Continued Use of New Media and the Internet 10 |
| Telemarketing Boost 10 |
| Brand Ambassadors 10 |
| Changes to the Electoral Role 11 |
| Integration in the Industry 11 |
| ECONOMIC TRENDS 12 |
| Gross Domestic Product 12 |
| Table 1: Index of Growth in UK Gross Domestic Product at Current Prices (index 1995=100 and percent), 1997-2001 12 |
| Population 12 |
| Table 2: UK Resident Population by Sex (000 and percent), Mid-Years 1998-2002 13 |
| Inflation 13 |
| Table 3: UK Rate of Inflation ( percent), 1998-2002 13 |
| Unemployment 14 |
| Table 4: Unemployment Rate and Actual Number of Unemployed Persons ( percent and 000), 1998-2002 14 |
| Household Disposable Income 14 |
| Table 5: Index of Household Disposable Income (index 1971=100), 1997-2000 14 |
| MARKET POSITION 15 |
| The UK 15 |
| Overseas 15 |
| 2. Market Size 16 |
| THE TOTAL MARKET 16 |
| Table 6: The Total UK Direct Marketing Market by Sector by Value at Current Prices (£m and percent), 1998-2002 16 |
| MARKET SECTORS 17 |
| Telemarketing 17 |
| Table 7: The UK Telemarketing Sector by Value at Current Prices (£m and percent), 1998-2002 17 |
| Direct Mail 17 |
| Table 8: The UK Direct Mail Sector by Value at Current Prices (£m and percent), 1998-2002 18 |
| Direct Television 18 |
| Table 9: The UK Direct Television Sector by Value at Current Prices (£m and percent), 1998-2002 18 |
| Database 19 |
| Table 10: The UK Database Sector by Value at Current Prices (£m and percent), 1998-2002 19 |
| Direct Door-to-Door 19 |
| Table 11: The UK Direct Door-to-Door Sector by Value at Current Prices (£m and percent), 1998-2002 19 |
| Inserts 20 |
| Table 12: The UK Inserts Sector by Value at Current Prices (£m and percent), 1998-2002 20 |
| New Media 20 |
| Table 13: The UK New Media Sector by Value at Current Prices (£m and percent), 1998-2002 20 |
| National Press 21 |
| Table 14: The UK National Press Response Sector by Value at Current Prices (£m and percent), 1998-2002 21 |
| Magazine Display 21 |
| Table 15: The UK Magazine Display Sector by Value at Current Prices (£m and percent), 1998-2002 22 |
| Radio 22 |
| Table 16: The UK Radio Sector by Value at Current Prices (£m and percent), 1998-2002 22 |
| Contract Magazines 22 |
| Table 17: The UK Contract Magazines Sector by Value at Current Prices (£m and percent), 1998-2002 23 |
| Regional Display 23 |
| Table 18: The UK Direct Regional Display Sector by Value at Current Prices (£m and percent), 1998-2002 23 |
| Outdoor/Transport 23 |
| Table 19: The UK Outdoor/Transport Sector by Value at Current Prices (£m and percent), 1998-2002 24 |
| Cinema 24 |
| Table 20: The UK Cinema Sector by Value at Current Prices (£m and percent), 1998-2002 24 |
| OVERSEAS TRADE 24 |
| General Overview 24 |
| 3. Industry Background 26 |
| HISTORICAL BACKGROUND 26 |
| NUMBER OF COMPANIES 27 |
| EMPLOYMENT 27 |
| REGIONAL VARIATIONS IN THE MARKETPLACE 28 |
| DISTRIBUTION 28 |
| HOW ROBUST IS THE MARKET? 29 |
| LEGISLATION 29 |
| KEY TRADE ASSOCIATIONS 30 |
| Direct Mail Accreditation and Recognition Centre 30 |
| Direct Mail Information Service 30 |
| Direct Marketing Association 30 |
| Federation of European Direct Marketing 30 |
| Institute of Direct Marketing 30 |
| 4. Competitor Analysis 31 |
| THE MARKETPLACE 31 |
| MARKET LEADERS 32 |
| Carlson Marketing Group (UK) Ltd 32 |
| Company Structure 32 |
| Current and Future Developments 32 |
| Financial Results 33 |
| EHS Brann Ltd 33 |
| Company Structure 33 |
| Current and Future Developments 33 |
| Financial Results 33 |
| Joshua Company Ltd 33 |
| Company Structure 33 |
| Current and Future Developments 33 |
| Financial Results 33 |
| MRM Partners Worldwide Ltd 34 |
| Company Structure 34 |
| Current and Future Developments 34 |
| Financial Results 34 |
| Proximity London Ltd 34 |
| Company Structure 34 |
| Current and Future Developments 34 |
| Financial Results 35 |
| Tequila London Ltd 35 |
| Company Structure 35 |
| Current and Future Developments 35 |
| Financial Results 35 |
| WWAV Rapp Collins Ltd 35 |
| Company Structure 35 |
| Current and Future Developments 36 |
| Financial Results 36 |
| OTHER COMPANIES 36 |
| Computing, Software and Call-Handling Companies 36 |
| Hays Customer Solutions Ltd 36 |
| Taylor Nelson AGB Ltd 36 |
| Fulfilment Houses 37 |
| Consignia/The Post Office 37 |
| Flostream 37 |
| Mail Solutions 37 |
| Jordan & Company International Ltd 37 |
| Contract Publishers 37 |
| Centurion PPL 38 |
| Haymarket Magazines Ltd 38 |
| John Brown Citrus Publishing 38 |
| Premier Magazines Ltd 38 |
| Redwood Group Ltd 38 |
| Printers 38 |
| DATABASE COMPANIES 39 |
| CACI Ltd 39 |
| Dudley Jenkins Group PLC 39 |
| Keywords Direct Ltd 39 |
| Mosaic Business Solutions Ltd 39 |
| Cluster Analysis 39 |
| OTHER SUPPLIERS 40 |
| List Owners and Brokers 40 |
| MARKETING ACTIVITY 41 |
| Web Portals 41 |
| Countyweb 41 |
| Freeserve.Com PLC 42 |
| America Online Incorporated 42 |
| British Telecommunications PLC 42 |
| Virgin Net Ltd 43 |
| Microsoft Ltd 43 |
| Yahoo! Incorporated/Yahoo! UK Ltd 43 |
| Lycos UK and Ireland Ltd 43 |
| National and Regional Newspapers 43 |
| Field Marketing 44 |
| Telemarketing 45 |
| 5. Strengths, Weaknesses, Opportunities and Threats 46 |
| STRENGTHS 46 |
| WEAKNESSES 46 |
| OPPORTUNITIES 47 |
| THREATS 48 |
| 6. Buying Behaviour 49 |
| INTRODUCTION 49 |
| Table 21: Responses to Direct Mailings ( percent of adults), 2003 49 |
| Table 22: Senders of Consumer Direct Mail by Industry ( percent of total consumer volume), 2001 50 |
| Table 23: Average Monthly Receipt of Direct Mail by Type of Household (number of items and percent), 2001 51 |
| Table 24: Usefulness of Direct Mail as an Advertising Medium ( percent of adults), 2001 52 |
| Table 25: Responses of Confident Responders ( percent of adults), 2001 52 |
| 7. Current Issues 54 |
| JUNK MAIL 54 |
| DATA WASTAGE 54 |
| DIRECT MAIL COMPLAINTS 55 |
| LOSS OF the ELECTORAL ROLL 55 |
| POSTAL CHANGES 55 |
| LEGISLATION 56 |
| RECRUITMENT 57 |
| 8. The Global Market 58 |
| iNTRODUCTION 58 |
| THE US MARKET 58 |
| THE INDIAN MARKET 59 |
| THE SOUTHERN AFRICAN MARKET 59 |
| THE CHINESE MARKET 60 |
| THE AUSTRALIAN MARKET 60 |
| 9. Forecasts 61 |
| INTRODUCTION 61 |
| BRITISH ECONOMIC GROWTH 61 |
| GLOBAL ADVERTISING EXPENDITURE 61 |
| FORECASTS 2003 to 2007 62 |
| Table 26: The Total Forecast UK Direct Marketing Market by Sector by Value at Current Prices (£m and percent), 2003-2007 62 |
| FUTURE TRENDS 63 |
| Consolidation in the Industry 63 |
| Development of Integrated Marketing Solutions 64 |
| Field Marketing 64 |
| 10. Company Profiles 65 |
| EHS BRANN LTD 66 |
| Proximity London Ltd 68 |
| tequila London Ltd 70 |
| Wwav Rapp Collins Ltd 72 |
| 11.Further Sources 74 |
| Associations 74 |
| General Sources 74 |
| Bonnier Information Sources 75 |
| Government Publications 76 |
Text © 2004 Key Note
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Last updated by Amanda Porteous February 2004
