Direct Marketing – Unwanted nuisance or useful service?

As Royal Mail lifts the cap, Philip Chadwick finds out if we will be flooded with wasteful junk.

Judging by the current barrage of negative press, the direct mail industry should be feeling more beleaguered than England football coach Steve McLaren.

And just when it thought things couldn't get any worse, last Monday the Local Government Association (LGA) waded into the furore, which began when Royal Mail announced plans to scrap the cap on unaddressed mail (PrintWeek, 3 August). Reports suggest that the LGA's chair, Lord Bruce-Lockhart, had written to the Royal Mail arguing that such a move could leave council tax payers facing larger bills.

The LGA indicated it had 'grave concerns' about the plans, which would cause 'unnecessary rubbish'. It claims 78,000 tonnes of 'junk mail' reach landfill sites each year and the cost of disposing waste has risen in the past year by pounds 205m.

ROYAL RESPONSE

The response from the Royal Mail was robust. A spokesman says: 'The LGA has not written to us and they are entirely wrong in thinking anything Royal Mail has done will lead to 'unlimited' amounts of unaddressed mailings being sent.'

It added that 75% of unaddressed mail is delivered by its rivals.

'If Royal Mail did not deliver any of this mail, then it would simply be posted through people's letter boxes by other operators,' adds the spokesman.

Consumers are responding by using the Direct Marketing Association's (DMA) Mail Preference Scheme (MPS). So far, around 200,000 people have registered in an attempt to stop direct mail being delivered to them.

For the DM industry, it sounds like doom and gloom, with customers turning off and the media hostile. But the truth is somewhat different DMA director of marketing and business development Mike Barnes says that, while MPS requests are rising, they are 'not having an impact on the market'.

As you would expect from a representative of the DMA, Barnes argues that DM does work and consumers do respond to it. But the association has a bundle of statistics to back up its claim that DM isn't on the way out.

'We support the right of customers to say no,' says Barnes. 'But for every person who doesn't like DM, you get another who does. It is frustrating that media reports can drive people to MPS.'

'Yes, there is junk mail in the market,' adds Gurdev Singh, managing director at Howitt and a council member at the DMA. 'But to me, that is unaddressed mail. Most mailings go to a targeted audience.'

COLLECTING COUPONS

There are consumers who not only respond to mailings, but hold onto them – and not just in the case of targeted mail. A door drop survey this year found that one in 10 people keep leaflets for more than a month and that number doubles when the information includes money-off coupons, free samples or supermarket offers.

'Anyone opting for blanket suppression of all DM may stop getting local discounts,' adds Barnes.

So while there's evidence people do respond to these mailings, what about the environmental charges levelled against the industry?

Barnes claims only 2% of DM goes to landfill sites, while the Confederation of European Paper Industries figures say 95% of DM comes from recycled or managed resources.

'The national stories do not stack up,' adds Barnes.

Peter Frings, managing director of Target Direct Print, which specialises in DM print management, agrees. 'DM, compared to other industries, is fairly sustainable. But the public perceive it as wasteful.'

All the recent trends point towards DM volumes falling, not rising. And the main reason for this is improved targeting. More companies have taken on board the view that 'carpet bombing' households doesn't work and just gets people more worked up.

LIFESTYLE CHOICES

'Mailings are increasingly about consumers' lifestyle and don't become intrusive because they provide information on relevant products and services,' adds Barnes.

And that means other channels, such as email, SMS and the web, can be used to link up with DM campaigns. However, this doesn't mean that printers should worry – demand for DM will continue and it's unlikely that brands will shy away from mailings because of all the recent bad publicity.

'If I was a printer I would not be worried,' reassures Barnes. 'Clients do not spend in isolation, but as part of multi-channel campaigns. No company will take action based on fear-mongering in the national press.'

Frings agrees that there is not likely to be a backlash from clients. Indeed DM offers a company more information on its customers and its spend than many other forms of marketing.

'It is instantly accountable,' says Frings. 'You know exactly how many people have responded to the campaign and how much you have sold as a direct result of it. The return on investment is good.'

Printers may need to take some responsibility as well. Howitt's Singh explains that his firm 'won't touch' some DM campaigns, especially those that encourage the dialling of premium rate numbers. 'Printing companies should be more selective in that area,' he says.

So it boils down to the consumers. If more of them sign up to the MPS then it may well affect the industry. All the DMA's Barnes can do is keep trying to drive the industry's message and 'fight to keep the news balanced'.

DIRECT MARKETING IN NUMBERS

– pounds 107bn of sales are generated annually as a direct result of direct marketing

– pounds 17bn was spent on direct marketing in the UK in 2005, growing at a rate of 13% a year

– 72% of companies in the UK undertake some form of direct marketing

– 26% of consumers find direct mail convenient

– 27% of consumers find direct mail informative

– 56% of consumers have made a purchase as a result of receiving advertising mail

– 60% of consumers respond to direct mail, making it the most responsive advertising medium

– 814,000 jobs are generated in the UK as a result of DM

– 57% of consumers find free samples, supermarket offer leaflets and money-off coupons, addressed, useful

– 40% of consumers think that the volume of direct mail they receive is about right

– 82% of consumers say that direct mail can affect the way that they think or feel about a brand or company

Source: DMA/DMIS.