Direct goes digital.

In the digital age, direct marketing is no longer mail through your letterbox but messages in your inbox. Cost effective and with instant delivery, it seems ideal as long as businesses don't abuse it, Robert Gray writes

The digital revolution has changed the meaning of the term "direct marketing". Where once direct communication meant little more than direct mail and door-to-door distribution, with a little bit of telemarketing thrown in for good measure, now when direct marketers mention one-to-one communication, they are just as likely to be referring to e-mail as to targeted pieces of communication that arrive through the letterbox.

The importance of e-mail as a direct marketing tool is set to grow. For an insight into how things might develop in the UK, we can look at the picture in the US. Our American cousins now send more e-mails than they do traditional mail. Many of these e-mails carry commercial messages and some analysts believe that direct mail volumes in the US may fall by up to 17 per cent by 2004.

Jupiter Research is projecting that the number of unique e-mail marketing messages in the US will grow at a compound annual growth rate of 111 per cent -- up from three billion in 1999 to 268 billion in 2005. Meanwhile, in its report The E-Mail Marketing Dialogue released earlier this year, Forrester Research predicts that by 2004 clients will spend $4.8 billion a year with agencies and list owners in the sector.

Forecasts for the UK are harder to come by but what is certain is that it is going to get a whole lot bigger than it is now. Especially as the number of people getting wired up across the globe continues to increase. Recent figures from the Nielsen/NetRatings Global Internet Index show that the number of people using the internet around the world is growing by almost 5 per cent a month.

As a consequence, the direct marketing agency is having to adapt its business to encompass digital media marketing or risk becoming irrelevant. Famous agency names are disappearing as the old DM brands reinvent themselves in a bid to seem on the ball for the digital age. Evans Hunt Scott, for instance, has been merged with its Havas stablemate, realtime, a digital specialist, to create ehsrealtime. The Young & Rubicam-owned Wunderman Cato Johnson has also rebranded itself as Impiric -- dropping the name of its founder, the DM guru Lester Wunderman, which it has borne with pride since 1958. The new name is intended to set right the misconception that the agency is still rooted exclusively in direct mail: about 40 per cent of its business today is interactive in nature.

Yet even as the DM industry is evolving to take advantage of digital opportunities, it has become clear that change brings with it potential pitfalls. There is the possibility that unless the industry acts responsibly it may end up shooting itself in the foot.