THE DMA S STATE OF THE E-COMMERCE INDUSTRY REPORT 2001- 2002

NEW YORK, April 23, 2002 -- The Direct Marketing Association's (The DMA) State of the E-Commerce Industry Report 2001-2002 was conducted by The DMA and the Association for Interactive Marketing (AIM) during the fourth quarter of 2001. The report provides an outlook on how economic changes have affected the interactive playing field, and previews some of the challenges that lie ahead. More than 700 companies involved in direct & interactive participated in the report.

• Over half (55%) of companies who conduct e-commerce transactions report that they are making a profit. Of those not currently earning a profit, 55 percent anticipate being profitable in 2002.

• Seven in ten (71%) consumer direct marketers can conduct their financial transactions online.

• Compared to last year, average online revenue per company increased by more than $1 million (from $3.9 million in 2000 to $5.3 million in 2001).

• The average online order size in 2001 was $100. This figure increases substantially to $350 for those direct marketers targeting their site to the B-to-B segment.

• Forty-seven percent of marketers reported they conduct Web business overseas, thus allowing them to prospect new customers internationally and providing a cost-efficient opportunity to expand into international markets.

• Sixty-six percent of respondents reported increased online sales as a result of e-mail marketing promotions, with the average increase being 52% of sales.

• Sixty-three percent indicated e-mail was the most effective customer-retention tool.

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• Although many marketers cut back traditional media budgets last year, an increasing number used e-mail marketing to retain customers and drive sales. Respondents reported investing only 13% of their total marketing budget in e-mail generated 15% of their total net interactive sales.

• Marketers are using a combination of online and offline techniques to drive traffic to their Web sites. Direct mail (58%), e-mail (56%) print ads (43%) and search engine optimization (41%) were the most frequently used methods to generate online traffic.

• Traditional direct marketing techniques are the leading drivers of online sales: Direct mail (28%), catalogs (27%), and Web sites (24%) generated the largest share of net sales in 2001.

• Eighty-three percent of Web marketers expect to see their revenue increase from interactive media. Fifty-one percent indicated this increase would range from 6-25%.

• Three-quarters (75%) of Web marketers anticipate investing more money in interactive media over the next three years.

The DMA’s State of the E-commerce Industry Report 2001-2002 priced at $495 for DMA members ($995 for non-members) and can be ordered now through The DMA Book Distribution Center at www.the-dma.org/bookstore/cgi/bookstore or by calling 301.604.0187.

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

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