DM budgets suffer cuts for first time in three years

by Claire Foss, Marketing Direct 05-May-06

Direct marketing budgets were revised down by 0.8 per cent in the first quarter of 2006, according to the latest Bellwether Report. Spend in all other areas, with the exception of online, fell between 6 and 16 per cent.

The downward revision was in contrast to the final quarter of 2005, when
DM budgets were revised up by 3.4 per cent. The cut is the first the
sector has suffered in almost three years.

Despite this, data on new budget setting for the sector suggested DM

spend is to grow this year, although at a slower rate than in previous

years.

Online marketing again performed well, revising budgets upwards for the
first quarter by 25.8 per cent. According to Terry Hunt, chairman of the
EHS Brann Group, the huge rise in internet budgets has a hidden
significance.

"The DM numbers look like a flat picture but they disguise something,"
he said. "Spend isn't growing but scale is - people want more for their
money and that's why there's a shift of spend towards direct marketing
and the internet."