In 2013 the total spend on addressed direct mail advertising, including postal costs and the production of direct mail, was £1.5bn, down 5.1% year-on-year and down 17.1% on the £1.8bn spent in 2009.

The proportion of total advertising spend accounted for by direct mail has also fallen each year, dropping from 17.8% of total advertising spend in 2009 to 14.1% by 2013.

Of the £1.5bn spent on DM in 2013, 28.7% came from clients in the retail sector, which remained the largest buyer of DM (although its share has fallen 2.9% since 2009); the largest increase came from the telecoms sector, which upped its spend by 40% to £135.5m over the five-year period.

Pureprint business development director Matt Rees, who sits on the DMA Mailing Houses council, said that better data management and targeted communications had reduced mail volumes while delivering better ROI for marketers.

"More and more clients want to create products that have a premium look and feel - be it digitally-printed tactile materials, laminated mailers or large letter products that create doormat standout," he added.

"Increasingly we are challenging conventional production processes most of which lead to an increase in postage costs per item but at the same time a reduction in the number of communications.

Direct mail accounted for 28% of all addressed mail in 2013, second only to transactional, which accounted for 49%; parcels accounted for 12% (up from 8% in 2009), while the remainder consisted of publishing and social mail (greetings cards and invitations).

According to PricewaterhouseCoopers, financial institutions, which are responsible for the bulk of transactional mail, have already made the easier electronic substitutions, meaning thjat future declines in transactional mail volumes are likely to be slower.

This provides some comfort to downstream access providers, who saw the first decline in the volume of access mail (0.6%) since its introduction in 2004. Ofcom said this decline reflected the maturity of the market and added that the proportion of access mail had continued to rise (from 46% to 49%) as it had declined at a slower rate than the total market.

Total addressed mail volumes came in at 14.8bn, down 4.5% year-on-year and 28% versus the 20.6bn items delivered in 2008; however, addressed mail revenues have risen from £7bn to £7.5bn over the same period, with the largest increase coming in 2012 when Royal Mail was granted greater commercial freedom by Ofcom.

The Communication Workers Union (CWU) hit on the fact that end-to-end deliveries by competitors have risen by more than 211% from 18m in 2012 to 56.1m in 2013 as evidence of the need for intervention to protect the universal service, in spite of the fact this represents less than 0.4% of total mail volumes.

"Direct delivery competition is damaging the financial sustainability of the universal postal service because companies such as TNT are able to cherry pick the low cost, profitable areas for delivery," said CWU general secretary Billy Hayes. "This reduces the revenues needed to sustain the universal service."

Revenues from direct delivery by Royal Mail's competitors almost doubled in 2013 to £11.3m although this represented just 0.15% of total mail revenues. Royal Mail increased its revenue in the year by 2.8% to £7.3bn with 80% of this coming from its end-to-end retail products.