Direct marketers waste £50m a year by having excessively large databases, according to a new report.

The research, conducted by financial services forum Tank and database marketing guru Mark Patron, and sponsored by customer intelligence firm ClarityBlue, reveals that a lot of businesses do not mail portions of their database, resulting in huge amounts of waste.

The study shows that companies can reduce direct marketing costs by as much as 10 per cent by slashing the number of unsuitable prospects on their databases. The findings should act as a wake-up call to the direct marketing industry. The aim is to encourage businesses to look more closely at their data and move towards using prospect pools, where appropriate, according to the authors.

Patron comments: "The problem is that the industry is not set up to give advertisers the right names, but as many names as possible.

"The research makes prospect pools more transparent, enabling marketers to discover what works and what doesn't."

James Hanscomb, head of prospect management solutions at ClarityBlue, says: "Direct marketing is no longer a numbers game, as the research has proved. Being more targeted will not only increase responses, but also reduce waste.

"If data sellers are to provide quantity rather than quality, the industry needs rigorous data benchmark- ing standards to achieve best practice for prospect databases."