DMA Releases Quarterly Business Review for Q1 2010; Digital Channels Command Lion's Share of New Marketing Spending

June 23, 2010 — The Direct Marketing Association (DMA) today released its Quarterly Business Review (QBR) for the first quarter of 2010. DMA partnered with Winterberry Group, a leading strategic management consulting firm that helps advertising and marketing companies build shareholder value, on this report.

As the trends toward increased accountability and technical innovation continue their rise in popularity and ROI among the business community, the digital channels have consumed the top slots for new marketing spending. The study shows that for the first time in two years marketers and their service providers reported across-the-board increases in revenue, marketing expenditures, and profitability compared with both the fourth quarter of 2009 and the same quarter last year (SQLY). Their optimism about the second quarter also grew.

“After two difficult years, marketers have begun to spend more on marketing as sales and profitability increase, and most of this increased spending is going toward digital channels,“ said Yoram Wurmser, DMA research manager. “If you look at the channels for new investment, they’re all digital: email; social media; search; online display; and banners. . . .The same five channels had the largest increase in ROI.”

"After more than two years of persistent economic challenges, we believe the first quarter may have finally brought the true economic tipping point that the direct and digital marketing community has been eagerly awaiting," said Jonathan Margulies, director at Winterberry Group. "Across all our metrics — revenue, expenditures, profitability, employment and expected growth — marketers and services providers reported better performance and an improved sense of optimism compared to just a few months ago. Hopefully, this is a sign of even more robust economic growth to come."

Some key findings include:

As they did last quarter, marketers cited “improved data analytics tools and processes” as the leading driver of new or expanded direct/digital marketing activity.
In a marked improvement from last quarter’s response, marketers and suppliers both noted that first-quarter profitability improved (in the aggregate) versus the previous quarter and SQLY. More than 48 percent of marketers and 54 percent of suppliers reported higher profits during the first quarter of 2010 versus first quarter 2009.
Similarly, both marketers and suppliers reported higher confidence with regard to their expected future profitability than last quarter — with over 50 percent of marketers and 57 percent of suppliers projecting improved bottom-line performance during Q2 (compared to 43 and 54 percent who were similarly optimistic last quarter).
As in previous quarters, digital channels continue to gain most new marketing spend — with e-mail; social; search; online display advertising; and mobile approaches joining the teleservices channel among those that grew in adoption versus both Q1 and the SQLY.

About DMA’s Quarterly Business Review

DMA’s Quarterly Business Review (QBR) for the first quarter of 2010 is based on two online surveys conducted by DMA’s Research and Market Intelligence department from April 6, 2010 through May 1, 2010. Altogether DMA received 301 usable survey responses.

The report is free for DMA members, and non-members can purchase a copy for $49.95 from DMA’s Bookstore by clicking here.

About Winterberry Group

Winterberry Group is a unique, global strategic consulting firm that helps advertising and marketing companies grow shareholder value. Based in New York, it offers a combination of corporate strategy, market intelligence and merger‐and‐acquisition due diligence support services aimed at helping clients identify opportunities for growth and achieve transformative results. The Firm’s global stable of clients includes service providers, marketers and financial investors representing every segment of the advertising and marketing industries, including Acxiom Corporation, Alterian plc., American Capital Strategies, arvato Services / Bertelsmann AG, Canada Post Corporation, Capital One Financial Corp., The Carlyle Group, Direct Group, Eastman Kodak Company, eCircle AG, Hewlett‐Packard Co., IWCO Direct, MediMedia USA, Meredith, Onex Corporation, Rosetta, Transcontinental, Inc., Xerox and Yahoo!.

About Direct Marketing Association (DMA)

The Direct Marketing Association (www.the-dma.org) is the leading global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques. DMA advocates standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the end-to-end direct marketing process. Founded in 1917, DMA today represents companies from dozens of vertical industries in the US and 48 other nations, including nearly half of the Fortune 100 companies, as well as nonprofit organizations.

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