FINDINGS AND ANALYSIS FROM THE DMA 2001 - 2002 ECONOMIC IMPACT REPORT

FOR IMMEDIATE RELEASE

June 10, 2002

New York, June 10, 2002 ? Despite a year marred by economic uncertainty and public concern over anthrax-in-the-mail, a new report from the Direct Marketing Association (The DMA) found that U.S. sales revenue from direct and interactive marketing rose nine percent last year to $1.86 trillion from $1.71 trillion in 2000. According to The DMA?s Economic Impact: U.S. Direct & Interactive Marketing Today study, this sales growth outpaced overall sales growth in the U.S. by 3.5 percent.

Following are findings from The DMA?s 2001-2002 study, Economic Impact: U.S. Direct & Interactive Marketing Today:

• Sales via outbound telephone marketing, by a large margin, represent the largest category of direct marketing media spending at $661.8 billion. Telephone marketing is followed by direct mail ($582.5 billion), direct response newspaper ($256.2 billion), direct response television ($126.5 billion), and direct response magazine ($96.8 billion).

• Outbound telephone marketing expenditures, by a large margin, represent the largest category of direct marketing media spending at $76.2 billion ? followed by direct mail ($46.5 billion) and direct response television ($22.3 billion).

• Business-to-business direct marketing sales reached $858.1 billion in 2001 ? an increase of 9.9 percent over 2000 business-to-business sales. Business-to-business direct marketing sales are expected to reach $1.3 billion by 2006. Business-to-business direct marketing continues to grow at almost double the rate of total U.S. business-to-business sales. In all media, business-to-business growth trends are forecast to be considerably lower than those of the consumer media over the next five years.
• Consumer direct marketing sales reached $1 trillion in 2001 ? an increase of 8.2 percent over 2000 sales. Consumer direct marketing sales grew by nine percent per year from 1996 to 2001 and are expected to continue growing at a rate of 7.9 percent per year from 2001 to 2006, reaching $1.5 trillion. This compares to total U.S. consumer sales growth of 6.2 percent from 1996 to 2001 and projected growth of five percent per year over the next five years.

• Business-to-business direct marketing expenditures, at $102.5 billion, will account for 52.1 percent of total 2001 direct marketing expenditures. Business-to-business advertising expenditures grew by 7.7 percent per year from 1996 to 2001 and are forecast to grow at seven percent annually from 2001 to 2006, reaching $143.6 billion.
• Consumer direct marketing expenditures, at $94.3 billion, represent 48 percent of total direct marketing expenditures. Consumer advertising expenditures grew by 5.9 percent per year from 1996 to 2001 and are forecast to remain at that rate over the next five years.

• Top industries generating business-to-business sales in 2001 include business services ($176.9 billion), insurance carriers/agents ($61.4 billion), real estate ($58.9 billion), wholesale trade ($38.8 billion), and professional services ($34.6 billion).
• Top industries utilizing direct marketing methods to increase sales among consumers in 2001 include non-store retailers ($152.2 billion), real estate ($63 billion), general merchandise stores ($60.2 billion), auto dealers/service stations ($55.8 billion), and membership organizations ($51 billion).

• Business-to-business marketers spending the most ad dollars on direct marketing methods in 2001 include business services ($11.8 billion), communications ($9.5 billion), wholesale trade ($8.9 billion), transportation services/airlines ($6.3 billion), and the printing and publishing industry ($6.1 billion)
• Top industries spending ad dollars on direct marketing methods to reach consumers in 2001 include non-store retailers ($9.8 billion), general merchandise stores ($7.6 billion), depository institutions ($5.7 billion), transportation equipment ($5.2 billion), and educational services ($4.4 billion).

• Direct marketing can be used for three specific purposes: to solicit a direct order, to generate a lead, or to drive store traffic. Of the total 2001 direct marketing sales ($1.86 trillion), $1.05 trillion resulted from ads initially intended to generate a lead. Ads that were intended to result in direct orders produced $560.5 billion, and ads used to generate store traffic resulted in $250 billion in direct marketing sales.

• Direct marketing advertising expenditures in 2001 for generating sales leads represented $113.7 billion of the total $196.8 billion direct marketing expenditures ? followed by direct order ($60.7 billion), and traffic building ($22.3 billion).

• Among the states, California continued to top the list with $212.2 billion in sales revenue, followed by Texas ($132 billion), New York ($130.4 billion), Florida ($105 billion), and Illinois ($88 billion).

• In terms of direct response advertising expenditures, California again led the states with $22.1 billion, followed by Texas ($13.9 billion), New York ($13.5 billion), Florida ($10.5 billion), and Illinois ($9.3 billion).

In 1992, The DMA commissioned The Wharton Economic Forecasting Associates (WEFA) to analyze the scope of direct marketing in the United States and develop an economic model for historical analysis and forecasting purposes. The recently updated 2002 DRI-WEFA model provides an accurate view of the impact that changes in economic conditions, government policies (including postal rates), industry structure (including the impact of the Internet), and key pricing strategies will have on the direct marketing industry.

The DMA?s seventh edition of Economic Impact: U.S. Direct & Interactive Marketing Today breaks out data on direct marketing advertising expenditures, revenue, and employment throughout seven major media categories in 52 major industries.

The full report, available in late July, is priced at $495 for DMA members ($595 for non-members) and can be obtained by calling The DMA Book Distribution Center at 301.604.0187 or online at http://www.the-dma.org/cgi/offer?uid=000197.

The DMA is the leading trade association for businesses interested in interactive and database marketing, with nearly 4,700 member companies from the United States and 53 other nations. Founded in 1917, its members include direct marketers from every business segment as well as the nonprofit and electronic marketing sectors. Included are catalogers, Internet retailers and service providers, financial services providers, book and magazine publishers, book and music clubs, retail stores, industrial manufacturers and a host of other vertical segments, including the service industries that support them. According to a DMA-commissioned study, direct and interactive marketing sales in the United States exceeded $1.86 trillion in 2001, including $118 billion in catalog sales and $30 billion in sales generated by the Internet. The DMA's Web site is www.the-dma.org, and its consumer Web site is www.shopthenet.org.

Media Contact: Christina Duffney

[Editor?s Note: Charts from The DMA?s Economic Impact: U.S. Direct & Interactive Marketing Today -- broken out by medium, market, state, and industry -- are available to members of the press by contacting Christina Duffney at cduffney@the-dma.org.]

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