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DIRECT MARKETING ADVERTISING EXPENDITURES ACCOUNT FOR 53% OF TOTAL ADVERTISING EXPENDITURES, DMA S 'POWER OF DIRECT MARKETING' REPORT UNVEILS
Direct Marketing Continues to Make a Significant Contribution to US Economy
Las Vegas, NV, October 13, 2008— The Direct Marketing Association (DMA) today released The Power of Direct Marketing, an annual forecast of direct marketing’s economic impact on the US economy, including advertising expenditures and sales. First published in 1995, the report is released each year in conjunction with the DMA08 Conference and Exhibition, the Global Event for Integrated Marketing.
"In 2008 and 2009, expenditures on direct marketing media and processes will again outpace general advertising by a slight margin" said Peter A. Johnson, PhD, DMA’s vice president/senior economist, Strategy, Analysis, and Planning, and lead author of the report. "This means that in 2009, dm will capture 53 percent of total advertising expenditures, continuing the long-term movement in advertising dollars to direct marketing from general advertising.
"Despite the current uncertain economic times and sluggish, even declining periods in the latter part of 2008, direct marketers should realize 3.7 percent nominal annual growth in sales this year," continued Johnson. "Direct marketing’s integration of multiple sales channels and highly targeted offers means that businesses utilizing direct marketing typically outperform their competitors, even when sailing into financial headwinds. As the economy recovers in the latter part of next year, these advantages mean direct marketers will likely see sales growth of 4.5% next year. This improved revenue performance is forecast to help revive a US economy that desperately needs assistance."
New This Edition:
A special new feature of this year’s report is providing more granular industry data, stated Anne B. Frankel, senior manager, research and market intelligence. "For the first time, this edition includes ad spending and DM-driven sales data for the 52 industry verticals broken down by media channel and by intended purpose of the offer. These new breakouts will allow direct marketers to more precisely pinpoint which channels and intended purposes within industry groups are growing — as well as those that are declining."
Direct Marketing Advertising Expenditures:
Slow Growth in 2008 and in 2009
The $176.9 billion in direct marketing advertising expenditures that marketers are predicted to make by the end of 2008 represents a modest three percent increase over the $171.7 billion actually spent in 2007. The slow growth in 2008 is due to the worsening impact of lower home sales, a meltdown in mortgage lending, lower furniture, appliance, and automobile sales, and higher energy prices.
However, looking forward to 2009, total direct marketing advertising expenditures are expected to increase 3.5 percent yielding $183.1 billion. Above average, double-digit spending growth will occur in commercial email and Internet marketing as businesses take advantage of the continued move toward electronic purchasing.
Direct Marketing Sales:
Slow Growth in 2008, Slightly Faster Growth in 2009
Direct marketers should expect a 3.7 percent revenue growth by the end of 2008, reaching $2,058 from an actual $1,985 billion in 2007.
Continuing to rise in 2009, sales generated from direct marketing are forecast to grow by 4.5 percent to $2,150 billion. Several broad sectors are expected to realize above-average direct marketing sales growth in 2009 including Financial Services, Information, Transportation, Services, and Wholesale Trade.
US Growth to Receive Boost from Direct Marketing in 2008-2009
"As in 2007, the overall US Gross Domestic Product (GDP) in 2008 will benefit from the growth generated by direct marketing," said Johnson. In 2008, direct marketing advertising across all economic sectors is expected to add over $1.43 trillion of incremental final demand nation-wide, accounting for almost 10 percent of total US GDP.
Key Economic Impact Findings:
DMA’s The Power of Direct Marketing Report was prepared in August 2008 using the economic model of US direct marketing activity updated every year for DMA by Global Insight. Incorporating the most recent data available on developments in all sectors of the US economy, it aims to help marketers plan expenditures, sales, ROI, and employment for the 16-month period through the end of 2009.
The report is available for download on DMA’s online bookstore. The cost is $345 for DMA members and $595 for non-members. To purchase, pleaseclick here.
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 more than 3,400 companies from dozens of vertical industries in the US and 48 other nations, including half of the Fortune 100 companies, as well as nonprofit organizations.
In 2008, marketers — commercial and nonprofit — will spend $176.9 billion on direct marketing, which accounts for 52.1 percent of all ad expenditures in the United States. Measured against total US sales, these advertising expenditures will generate approximately $2.057 trillion in incremental sales. In 2008, direct marketing accounted for approximately 10 percent of total US gross domestic product. Also in 2008, there were 1.6 million direct marketing employees in the US. Their collective sales efforts directly support 9.3 million other jobs, accounting for a total of 10.9 million US jobs.
The Power of Direct: Relevance. Responsibility. Results.
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