The survey asked marketers from the UK's top 500 companies to predict future growth for digital communications.

E-mail marketing currently accounts for 9.5% of all marketing activity undertaken by the top 500 companies, a rise of 0.5% from last year.

Although volumes have risen, the impact of digital communications on the industry has been over-estimated. A year ago marketers predicted that e-mail marketing would account for 27% of all marketing activity by May 2003, for this figure to be realised volumes would need to grow from today's 9.5% to 17.5% in the space of one year.

The retail sector was the most optimistic, suggesting that just under a third (31%) of all marketing activity would be conducted via e-mail by 2004. This figure ranked just ahead of that for the credit card industry (30%). If current growth figures are taken into consideration (9%-9.5% in one year), these latest predictions are just a pipe-dream, says Pitney Bowes.

E-mail marketing already accounts for 18% of all marketing activity in the credit card industry and credit card companies are now getting involved with online loyalty programmes where customers can earn points with every offline purchase (in addition to any online point-earning activity they may already take part in).

The dominance of the Internet has swayed the judgement of marketers who are frustrated by low-volume, inaccurate e-mail lists and a growing consumer backlash against spam e-mails and misuse of online privacy.

In turn, the recent decision by a number of high-profile freemail sites such as Yahoo and Hotmail to start charging users for additional e-mail capacity may also be responsible for stunted growth in the sector.