DMA Releases Quarterly Business Review (QBR) for Q2 2012

New York, NY, September 7, 2012 — The Direct Marketing Association (DMA) today released its Quarterly Business Review (QBR) for the second quarter of 2012. DMA partnered with management consulting firm Winterberry Group on the report.

The second quarter of 2012 brought a mix of economic signals for direct and digital marketers and the service providers who support them. Aggregate growth continued across all key performance indicators, though the pace of that growth remained sluggish — even declining, in some cases — compared to similar benchmarks established last year.

Nonetheless, both marketers and suppliers say they’re bullish about the practice of direct and digital marketing (DDM), with more than 72 percent of survey respondents expressing confidence that DDM is well positioned for future growth.

“Despite mixed economic signals, marketers are expressing optimism, especially when it comes to the advantages and opportunities that digital channels are affording them,” said Linda Woolley, DMA’s acting president and CEO. “In fact, this quarter, for the first time ever, respondents indicated that digital channels were the only DDM media that captured spending gains versus the previous quarter.”

When asked about developments, trends, or marketplace dynamics allowing them to leverage DDM media, marketers said:

“The increase in technology…serves to open doors to new ideas for marketing,”
“Better availability of affordable and useable technologies is a boon,” and
“New cloud-based systems lessen cost for development of solutions.”

“The symbolic importance of this quarter’s feedback — which suggests that digital media are now the only direct marketing channels that are gaining share of spending — cannot be overstated,” said Jonathan Margulies, a managing director at Winterberry Group. “This really is the capstone of a trend we’ve seen developing for more than a decade, signaling that marketing innovation is increasingly likely to be driven by what’s happening online — especially when it comes to social, mobile, email, search, and display advertising.”

Key Findings:

Almost half of survey respondents saw their organization's DDM-driven revenue grow in Q2 2012 (48.8 percent), while 42.2 percent reported revenue remained unchanged.

An overwhelming majority of survey respondents said they expect DDM spending to either remain the same (48.1 percent) or grow (42.9 percent).

The most substantial media-specific spending gains were seen across both “mature” and emerging digital media, with social media, email, mobile, and search posting the most significant improvements.

Marketer respondents said they maintained steady spending on direct mail and place-based/out-of-home media during the second quarter, while they cut spending on direct response broadcast, gaming, and teleservices.

The proportion of total DDM budgets allocated to customer acquisition efforts — a common indicator of marketer aggressiveness and broader industry vitality — declined slightly compared to the last quarter, but remained close to the 60 percent benchmark considered standard during periods of economic expansion.

The majority of respondents surveyed said that their organization maintained their DDM-related staffing in Q2 2012 (63.1 percent), while 23.2 percent increased staffing.

About DMA’s Quarterly Business Review

DMA’s Quarterly Business Review (QBR) for the second quarter of 2012 is published by the Direct Marketing Association, with research and analysis provided by Winterberry Group. Its conclusions are based on results from an online survey of DMA members, deployed in July 2012. Altogether, the DMA received 314 usable survey replies, which included 164 marketer respondents and 150 providers of marketing services and technology solutions.

The report is free for DMA members. Non-members can purchase a copy for $49.95 from DMA’s Bookstore.

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!.

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About Direct Marketing Association (DMA)

The Direct Marketing Association (www.the-dma.org) is the world’s largest trade association dedicated to advancing and protecting responsible data-driven marketing. Founded in 1917, DMA represents thousands of companies and nonprofit organizations that use and support data-driven marketing practices and techniques.

In 2012, marketers — commercial and nonprofit —will spend $168.5 billion on direct marketing, which accounts for 52.7 percent of all ad expenditures in the United States. Measured against total US sales, these advertising expenditures will generate approximately $2.05 trillion in incremental sales. In 2012, direct marketing accounts for 8.7 percent of total US gross domestic product and produces1.3 million direct marketing employees in the US. Their collective sales efforts directly support 7.9 million other jobs, accounting for a total of 9.2 million US jobs.

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