Direct-market Spending Soars To $17.4 Billion
The Age
Wednesday June 18, 2003
Direct marketing continues to outpace mainstream media advertising as the preferred vehicle for advertisers, with spending on direct campaigns soaring to record levels in Australia last year.
According to figures released by the Commercial Economic Advisory Service of Australia, spending on direct marketing surged 6 per cent to $17.4 billion last year.
The figure, which includes everything from catalogues and classifieds to door-to-door sales and telemarketing, far outstripped spending on mainstream media ads, which were virtually static at $8.3 billion in this period.
Spending on telemarketing again led the way, with about 40,000 call centres across Australia costing companies $10 billion, a 5 per cent increase on 2001.
With the big banks and insurance companies pouring more money into their customer service centres, telemarketing has grown from a $1.3 billion industry just eight years ago.
Company websites and internet costs added $1 billion to the final result. However, CEASA managing director Bernard Holt said that growth in direct marketing last year was significantly below the 14 per cent annual rate of the mid- to late-'90s.
``If you take out those two (telemarketing and internet), it's really not looking all that brilliant," Mr Holt said.
``Direct marketing is suffering in the same way that main media is suffering.
Direct marketing campaigns using more traditional media fell away, with spending on direct mail declining for the first time in 10 years.
Direct advertising in newspapers and magazines via inserts also declined.
Media buying firms said the competitive advertising industry was forcing companies to rethink how they sold themselves.
Harold Mitchell, head of the largest of the media buyers, Mitchell & Partners, said: ``Marketers are now looking to focus more directly and cut out the wastage of above-the-line advertising.
``Because of the continuing sophistication of marketing, this trend will continue."
Elsewhere, spending on catalogues increased by 5.9 per cent, contributing the second-largest dollar amount by group.
Direct advertising on television - infomercials and advertorials - climbed 17 per cent, after a 15.3 per cent fall in 2001.
Direct advertising on radio went up 3.7 per cent.
Spending across classified advertising was up 20 per cent, largely due to the inclusion of the White Pages business directory.
© 2003 The Age