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DMA analyses reveal direct marketing slowdown but bright outlook

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Las Vegas—While the third quarter showed a decline in direct marketing business performance, profitability remains robust, according to the Direct Marketing Association’s Quarterly Business Review, released Monday at the association’s DMA08 annual conference and exhibition here.

The third-quarter revenue index was 47. (Index scores below 50 indicate year-over-year declines in sales, expenses, staffing and other areas.) An identical score of 47 was recorded in the second quarter.

However, profitability remained solid in the third quarter, hitting an index level of 62, just one point behind the Q1 and Q2 index scores. Agencies had the strongest index (66), followed by marketers (64) and suppliers (58).

Further, the future should see steady growth, with direct marketing expenditures outpacing general advertising, according to DMA’s Power of Direct Marketing annual forecast, also released Monday. The study projects 3.7% annual sales growth this year. As the economy recovers in 2009, the strong ROI demonstrated by direct marketing will boost its sales growth to 4.5%, the study projects.

—Christopher Hosford

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