It isn’t, says Arnaud Le Lann.

This morning, I have been reading an interview with Joseph Stiglitz (Nobel Prize for economics in 2001), published in one of the most renowned French business newspapers. This is the first article I have read for months which seems to speak the truth – one which is not claiming that the recession is behind us and that France and Germany are showing growth again.

This summer, most French and German media told us our countries were leading the world back to growth. It has been a kind of propaganda, relayed by all our politicians. But I think it is nonsense: we haven’t seen any change at all! In the direct marketing sector in particular, I would even say that things have got worse and that the recession is now really being felt, with a noticeable break in our activities since last April.

But during these past months, we have seen many changes in our industry, especially the type of companies that are currently using and investing in direct marketing methods.

There are a lot of newcomers, from totally opposite domains.

The first ones use only one DM channel (usually the postal one). They target individuals with the lowest incomes and those who are mail order addicts and their offers are based on sweepstakes, lotteries, games and contests. In France, we had two major players in this sector up to last year, now, there are around ten of them (most of them took advantage of the European Directive which liberalises cash games) and all of them are based outside Europe.

The second ones look for the opposite population: the richest people of the world. They use multichannel strategies, email being their priority, and these advertisers’ offers vary from expensive holidays, luxury cars and art to exclusive champagne. These ones are based in Europe and many are iconic brands in the luxury sector.
Compared to 2008, we have seen a huge dearth of activity from the usual DM advertisers. Traditional mail order companies or publishers have invested much less in DM in the past six months. We cannot count the amount of mailers who have halved their investments, or quartered them, or simply decided to cut their advertising expenditures in direct marketing.

These companies include the most established mail order houses, 90 per cent of press – and this phenomenon is visible in both the B2C and B2B spheres.
So, direct marketing is surviving thanks to both extremes: the most qualitative and exclusive ones and the most low-level ones.

But, adding together all the above, the newcomers are not filling the gap left by the traditional mailers. Our market is struggling. From the suppliers’ side, the only ones which are still maintaining a satisfying level of business, are those which are
able to work in all domains, all channels and possibly on a multinational scale.

Actually, the recession is showing us that, contrary to what we have been thinking for the last 15 years, hyper-specialisation in one domain is not good at all for our activities: only those which are able to offer a complete set of tools are likely to be able to maintain good results.

Arnaud Le Lann is managing director of Euroleads, the French partner within the Lists4Europe network. Email: alelann@euroleads.fr