DMA Releases 2010 Response Rate Trend Report

Report Shows Most Paid Search Ads Part of Multi-Step Sales Process

New York, NY, June 15, 2010 — The Direct Marketing Association (DMA) today released the 2010 Response Rate Trend Report which provides key cost and performance benchmarks to help marketers gauge the efficiency of their campaigns. The updated report shows effective paid search campaigns usually lead to a multi-step sales process.

Initially created in 2003 to detail the typical response rate for direct marketing campaigns in particular professions as well as the channels that yield the best response, this edition marks the seventh in the series. Since the report’s inception, interactive channels have multiplied and become a critical part of business. This year’s updated edition reflects the breadth of today’s landscape with full coverage for five media: Direct Mail (five formats: letter-sized envelopes, postcard, oversized envelopes, dimensional, and catalog); Email; Paid Search; Internet Display; and Telephone. It also contains additional data on Mobile (SMS and Display); DRTV; DR Radio; Magazine and Newspaper Space Advertising; Inserts; Fax; and Digital Out-of-Home.

Where possible, the overall data is broken down for direct order versus lead generation, B-to-B versus B-to-C, and new this year, average sale size of less than $1,000 versus $1,000 or more. This year’s report covers ten industries: B-to-B Services; Consumer Packaged Goods; Education; Financial Services; Health Care & Pharmaceuticals; Nonprofits; Publishing/Media & Entertainment; Retail; Technology & Manufacturing; and Telecom & Utilities.

“Technology has made it easier to measure results, but sometimes making sense of all this data can give marketers a headache,” said Yory Wurmser, DMA research manager. “This year’s report is much more user-friendly. It uses comparison charts and provides additional metrics for certain media like email and paid search, which we haven’t included before. The report gives marketers a context for response and cost metrics, letting them measure their campaigns against industry averages — an invaluable source when looking to benchmark campaign performance.

“The chart below is a great example of the ease in which marketers can now access this important information,” continued Wurmser. “In contrast to the goals of campaigns in many other media, paid search campaigns mostly urged respondents to get more information, either via a website or by consenting to receive free materials. Only 30 percent of campaigns had the intent of a direct sale, compared with 38 percent of email campaigns, 45 percent for mobile campaigns, 50 percent of direct mail campaigns, and 55 percent of telephone marketing campaigns. Therefore, paid search ads are a great way to drive traffic to your website; and when a paid search ad is clicked on, it usually leads to a two- or three-step sales process.”

Distribution of Respondents by Primary Desired Outcome of Internet Paid Search Campaign

Key Findings:

· Email to a house list averaged: a 19.47 percent open rate; a 6.64 percent click-through rate; a 1.73 percent conversion rate; with a bounce-back rate of 3.72 percent and an unsubscribe rate of 0.77 percent.

· Response rates for Direct Mail have held steady over the past four years. Letter-sized envelopes, for instance, had a response rate this year of 3.42 percent for a house list and 1.38 percent for a prospect list.

· Catalogs had the lowest cost per lead/order of $47.61, just ahead of inserts at $47.69, email at $53.85, and postcards $75.32.

· Outbound telemarketing to prospects had the highest cost per order or lead of $309.25, but it also had the highest response rate from prospects of 6.16 percent. The highest response rate for a house list was also telephone, at 10.41 percent.

· Paid search had an average cost per click of $3.79, with a 3.81 percent conversion rate. The conversion rate (after click) of internet display advertisements was slightly higher at 4.43 percent.

· Response rates for B-to-B campaigns were generally higher than for B-to-C campaigns. Lead generation and high-end average sale campaigns also had higher response rates.

· Nearly 60 percent of direct mail campaigns in financial services aimed to produce a direct sale. The average response rate was a comparatively low 2.66 percent to a house list and 1.01percent to a prospect list.

DMA’s Response Rate Report Trend Report was conducted through a survey that was emailed in March and April 2010. When the survey was closed, DMA had received 473 usable responses.

DMA’s 2010 Response Rate Trends Report costs $260 for members and $470 for non-members. To purchase, please click here.

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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.

In 2009, marketers – commercial and nonprofit – spent $149.3 billion on direct marketing, which accounted for 54.3% of all ad expenditures in the United States. Measured against total US sales, these advertising expenditures generated approximately $1.783 trillion in incremental sales. In 2009, direct marketing accounted for 8.3% of total US gross domestic product. Also in 2009, there were 1.4 million direct marketing employees in the US. Their collective sales efforts directly supported 8.4 million other jobs, accounting for a total of 9.9 million US jobs.

The Power of Direct: Relevance. Responsibility. Results.

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