THE DMA FORECASTS INTERACTIVE/ELECTRONIC COMMERCE SALES TO REACH $41.5 BILLION IN 2003

SAN FRANCISCO, OCTOBER 21, 2002 – Although interactive/e-commerce is still a relatively new direct marketing channel, a report from the Direct Marketing Association (The DMA) found that it is quickly becoming an important piece of the overall commerce pie. According to The DMA’s Economic Impact: U.S. Direct & Interactive Marketing Today study, interactive/e-commerce sales will rise 12.3 percent this year to reach $33.7 billion, up from $30 billion in 2001.

"Today 98 percent of direct marketers have an online presence," said H. Robert Wientzen, president & CEO, The DMA. "Not only has the Web energized the direct marketing industry over the past five years, it has helped us weather the economic downturn of the past year and a half by providing marketers with an alternative cost-effective means of communicating with their customers."

Looking ahead, the study projects Web-driven sales to reach $41.5 billion in 2003 and compound 21 percent annually, reaching $87 billion in 2007.

According to the most recent economic data, marketers this year are projected to spend $3.8 billion on interactive marketing, an 11.8 percent increase over the 3.4 billion spent in 2001. Interactive/e-commerce ad spending is estimated to reach $4.7 billion in 2003. Over the next five years, interactive/e-commerce ad spending is forecast to compound 18.5 percent annually.

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 complete report will be available in the spring of 2003.

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 is projected to surpass $2 trillion in 2002, including $125 billion in catalog sales and $33 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.

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