The direct marketing industry has maintained significant levels of growth throughout the last decade, including the recessionary years of the late 1980s and early 1990s. This is due to two main factors. Firstly, the advances in computer technology and software programming have made efficient, cost effective database marketing a reality. These developments have given users the opportunity, and the confidence, to conduct highly targeted campaigns achieving good response rates and results with less wastage. Secondly, a climate of recession, staff cutbacks and ever closer scrutiny of expenditure forced business towards the accuracy and measurability of direct marketing campaigns in an attempt to maximise their marketing budgets and sell more product.

Tighter targeting techniques have increased the efficiency and effectiveness of direct mail, telephone marketing, door-to-door distribution and direct response advertising. Direct response advertising represents the largest segment of the market, followed by direct mail, door-to-door distribution and lastly, telephone marketing. This broad picture does not include direct marketing activity conducted entirely in-house which is impossible to measure. It is known, however, that in-house direct marketing has grown along with the spread of the computer technology and expertise which makes it both possible and cost-effective. For example, two thirds of the top 3,000 advertisers in the UK now have an executive responsible for direct mail with one in five claiming expenditure in this area accounting for some 75 percent of their total advertising spend.

Despite these positive trends the industry still has a long way to go in gaining consumer support and acceptance. The National Opinion Poll (NOP) research conducted for MAPS in January 1997 showed that some 65 percent of consumers had still to purchase goods or services via direct marketing. This may be due, to an extent, to the inheritance of a rather down market image from the traditional mail order, catalogueagentweekly payment sector. The industry also still struggles to rid itself of the tabloid shorthand 'junk mail' tag widely used by the press.

While it has been suggested that there is a need for the industry to run a generic campaign to convince consumers of the benefits of buying via direct marketing avenues two factors will, over time, work in favour of the industry. Firstly, any lingering down market image is rapidly being dispelled by high value goods and services - computer equipment, insurance, even motor cars being offered, in some cases exclusively, by direct marketing techniques.

Secondly, there is reason to believe that generational and socio-economic factors will play an increasing part. Generations that have come to maturity against a background of credit cards, cash dispensers, computers and mobile telephones are not deterred by the prospect of using a credit card for the purchase of an item costing up to £1,000. Indeed, the pressured present day lifestyle of many people makes the prospect of a telephone purchase, perhaps during the evening or at the weekend, very attractive in saving time and trouble.

Excluding the mail order sector the main users of direct marketing methods are financial services (insurance - credit cards - banks), charities and retailers. Magazines and book clubs are also substantial users along with estate agents on a predominately local basis. A major development in recent years has been the increased expenditure of the branded fast moving consumer goods (FMCG) sector on direct marketing, a notable example being the Heinz television based direct marketing campaign, the largest so far seen in the UK.

This move was prompted by the growing power of the supermarket chains, particularly Sainsbury and Tesco, in promoting their own brand products. Brand loyalty is diminishing and if brands are to move from supermarket shelves they must be targeted more precisely than ever before. Intense competition between supermarket chains has led a range of promotional initiatives such as the Sainsbury's Reward Card, a move forced upon them by the success of the Tesco's Club Card.

National newspapers have entered the direct marketing field, an example being the Daily Telegraph 'Telegraph Reader Direct' which promotes a range of products, theatre ticket and holiday offers. In 1996 the Daily Telegraph and Sunday Telegraph promoted a pre-payment subscription scheme under which advance payment for six months secured the papers every day of the week for £1 - a major saving on the cover price.

The most audacious and innovative entrant into direct marketing in recent years is without doubt Daewoo Cars, a previously unknown Korean manufacturer achieving a 0.92 percent share of the highly fragmented UK market in its first year, the most successful car launch ever.

The dynamic nature of the direct marketing industry is illustrated by the continuing changes, developments and combinations among the various product sectors. Definitions and demarcations between different disciplines within the direct marketing industry, indeed within the whole marketing and advertising industries, have become blurred with many suppliers becoming multi-service. Direct marketing and telephone marketing agencies, printers, list brokers, database and computer companies have increased the range of services offered, expanding into non-traditional areas at a rapid rate. An inherent danger here is that the attempt to be all things to all men can lead to involvement in areas beyond core expertise. Also, in some sectors start-up costs are relatively low. The result is that while demand remains strong competition is intense, profitability under pressure and many small companies have ceased trading.

A continuing area of contention is direct response advertising and whether this should be handled by full service above-the-line advertising agencies or by below-the-line specialist shops. It is an important issue, as direct response is one of the fastest growing sectors in direct marketing, involving budgets of considerable size. Advertising agencies claim that direct marketing alone cannot create a brand without above-the-line support in terms of awareness and image creation. This goes some way beyond what has traditionally been regarded as direct marketing and has led to the polarisation of direct marketing agencies between the response driven and those wishing to be seen as 'creative'.

The outlook for the industry appears to be very strong. Continuing fragmentation of traditional media will increasingly render above-the-line advertising poor value for money compared with the precisely measurable results of targeted direct marketing activity. It is expected that the future will see direct marketing becoming more strategic and less tactical than in the past.

It is vital, however, that the industry develops a cohesive front to gain credibility with the consumer and confidence from the user. A united industry, exercising effective self-regulation, would also be better placed to lobby government against potentially damaging legislation that may emerge from Westminster - or Brussels - in the future.