SALES ATTRIBUTED TO LEAD GENERATION AND TRAFFIC GENERATION FALL SLIGHTLY

FOR IMMEDIATE RELEASE:

ORLANDO, OCTOBER 13, 2003 -- With the predicted economy-wide recovery failing to materialize to date, an updated report from the Direct Marketing Association (The DMA) found that sales attributed to direct and interactive marketing lead generation and traffic generation fell slightly over the past year.

According to The DMA's updated October 2003 Economic Impact: U.S. Direct & Interactive Marketing Today, American marketers are projected to produce $904 billion in sales attributed to lead generation in 2003 -- 20 percent lower than last year's $1.13 trillion -- and generate $212.6 billion in sales attributed to traffic generation measures in 2003 -- 21.5 percent lower than last year's $271 billion. As a result, total projected direct marketing-driven sales are projected to reach $1.7 trillion in 2003, 13 percent lower than last year's $2 trillion. If economic projections hold, total sales are estimated to reach $2.49 trillion in 2008.

Yet, based on current economic trends and projections, direct response advertising dollars are working harder in terms of generating sales. American marketers this year are projected to generate $635 billion in direct-order sales, a 6.6 percent increase over 2002. Direct-order sales are projected to compound 7.3 percent annually, exceeding $900 billion in 2008.

"Fluctuations in consumer confidence, global issues, and increased government regulation over the past year have led the industry to take the appropriate steps to maximize their marketing dollars and concentrate more on customer retention," said H. Robert Wientzen, president & CEO, The DMA. "While our updated economic data show slower sales growth because of lead generation and traffic generation, direct-order sales show a healthy increase over last year."

This year, U.S. marketers are projected to spend $203 billion on direct response advertising, a five-percent increase over 2002 ad spending. Over the next five years, direct response ad spending is forecast to compound 5.2 percent annually to $262 billion in 2008.

Web-driven direct response sales are projected to generate the strongest growth of all direct marketing channels. U.S. direct marketers are forecast to generate $41 billion in Web-driven sales, an astounding 22-percent increase over 2002 sales. Over the next five years, Web-driven sales are estimated to compound 21 percent annually to reach $104 billion in 2008.

Catalogs are forecast to generate $133 billion in 2003 sales, and are projected to increase 5.7 percent annually over the next five years to reach an estimated $175 billion in 2008.

In 1992, The DMA commissioned The Wharton Economic Forecasting Associates (WEFA), currently known as Global Insight, Inc., 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 2003 Global Insight 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 eighth edition of Economic Impact: U.S. Direct & Interactive Marketing Today breaks out data on direct marketing advertising expenditures, revenue, and employment for seven major media categories in 52 major industries. The complete report will be available in the spring of 2004.

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 are projected to have surpassed $2 trillion in 2002, including $126 billion in catalog sales and $34 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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