DMIS reports direct mail expenditure down 3.9% despite fourth-quarter surge

by Alex Donohue, Brand Republic 23-Mar-06, 13:50

LONDON - Direct mail staged a strong fourth-quarter recovery in 2005, leading to a 2.4% rise in expenditure for the period, according to the Direct Marketing Information Service.

This comes despite figures for the first three quarters of the year being significantly down on 2004.

Overall figures for direct mailing expenditure in 2005 were down 3.9% to £2.4bn. The fall was in part attributable to cutbacks made in the traditionally heavy-spending financial and home shopping sectors.

However, the October to December figures show fourth-quarter expenditure rose 2.4% year on year to £691.2m, with volume also up 0.7% to 1.2bn items for the same period.

The DMIS says the fourth-quarter increase is an encouraging sign that the sector is in recovery. While banks significantly curtailed direct mail spending in the first three quarters of 2005, a surge in the October to December period meant there was only a 1.6% year-on-year reduction.

The home shopping sector also followed a similar trend, with direct mailing expenditure down for the first three quarters, only for a significant increase in the final. This resulted in a 4.1% fourth quarter increase, compared with the same period, the previous year to 138.8m items.

The charity and leisure and tourism sectors saw the largest increase in direct mail expenditure. Charities increased mailing volume in the fourth quarter by 13.9% year on year. Leisure and entertainment also experienced a 22.2% year-on-year rise.

Jo Howard-Brown, DMIS managing director, said: "With the traditionally heavy mailers such as banks and mail order companies cutting back activity for much of the year it was inevitable that the year end figures would show a fall against 2004."

"But with the fourth-quarter figures showing bank activity recovering again and home shopping activity on the rise -- coupled with continued strong growth in other sectors -- there are certainly grounds for optimism that the decline in total volumes over the past year have levelled out and we can look forward to stability in 2006."

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