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As public elevation of DM goes, last year's speech by MP Douglas Alexander that BTL spend proved critical to the Labour Party's second election victory is about as good as it gets. But the blank cheque approach that last year saw Labour spend £931,889 on market research and £539,806 on copy writers alone, has been thrown into sharp relief after it was revealed that Labour was in debt to the tune of £6 million.

During the election campaigning costs were capped at £14.8 million. In this post election year though, DM must prove itself yet again - this time as a cost with real ROI.

Responsible for this is Labour's head of marketing and income generation, Martin McEwan. And, while herding cash-waving donors might appear the obvious route to take, McEwan has other ideas. Last month Labour's website - www.labour.org.uk - was redesigned to make it easier for visitors to access information and, crucially, to leave their email addresses. The priority, says McEwan, is relationship building, which he believes will set the stage for regular donations later.

"Our most important drive this year is our e-party initiative which aims to collect 20 per cent of our members' email addresses. We can email news, reactions to announcements and invites to local events, while continually driving people to the website, he says.

Prior to this only 10 per cent of email addresses had been captured but, with its database having fallen from 400,000 in 1997 to under 280,000 today, the importance of involving members is key. "We have ongoing reactivation mailers but we have to accept we're in government and people won't agree with all our views. If we send information in line with people's interests, communication will be more precise, he says.

Even in a non-general election year Labour's DM programme is steadily growing, with local, London, Scottish, Welsh and European elections to campaign for. Local marketing is approved, but is generally autonomous.

Before the 1997 election, Labour had worked with EHS Brann to build up its database, but now this is run in-house. TBWA/GGT Direct, which ran its General Election campaign, is on hold until the next serious campaign.

All of which means McEwan can concentrate on cheaper, agency-free forms of DM. "We do fundraising events - usually by phone - around specific events like the Budget and party conference time, both ours and the Tories', he says. "Like charities we have a hierarchy of who are most valuable, but increasingly we want to dovetail what we hear from members via email to help target which ones can donate."

Not that national campaigns are overlooked. While CIM research found that 81 per cent of voters were unswayed by political advertising, Labour's dedication to it is strong, especially when it combines it with a donor element. TBWA/GGT's most famous election mailer last year contained over-large playing cards with the faces of Ann Widdecombe, Michael Portillo and William Hague as jokers in the Tory pack.

But much has been learned from the 1997 'Same Old Tories Same Old Lies' creative by DMP DDB. While the ASA had no power to uphold complaints against it by the Tory Party, (political advertising is exempt from the rules of substantiation and truthfulness), Mc-Ewan says there's a fine line to tread.

"There can be resistance to negative campaigning, he says. "We want to attack the Conservatives but you have to make sure you don't overstep the line."

Between 1998-2001 the Tories sent 50 per cent more mail than Labour. But mail volumes matter less now that there is email. At the last election over half of Labour's DM went to under 44 year-olds compared to the Tories' 21 per cent. A younger membership isn't just crucial for votes, but also in the way they can be communicated with.

VITAL STATISTICS
Name: Labour Party
Income: £31,816,000 (2000)
Total marketing spend: £14.8m (2001)
Agency: Currently in-house

ON THE SPOT

Martin McEwan, head of marketing & income generation, Labour Party

Do you open all of your direct mail?

Most of it - except for the daily credit card mailings, which helpfully make themselves obvious on the outer envelope.

What do you tell people you do at parties?

I tell them I work for the Labour Party - and then duck. Most people are fascinated and ask me what Tony Blair is like.

If you could send anyone DM what would it be and to whom would you send it?

Nelson Mandela - an invitation to dinner at my house. Or we can do it at his if he prefers.

What one piece of advice would you give when embarking on a DM campaign?

Think hard about the audience - what will they actually be thinking when they receive this communication? And be sceptical when the agency tells you that this really fancy pack will come in on time and on budget.