DMA RELEASES QUARTERLY BUSINESS REVIEW FOR Q1 2004

NEW YORK, May 12, 2004 - The Direct Marketing Association (The DMA) today released its Quarterly Business Review (QBR) for the first quarter of 2004, which announced the third straight quarter of increased revenues, rising expectations, and solid overall growth for the direct and interactive marketing industry.

Direct and interactive marketing revenue performance – perhaps the best single benchmark in the report – scored an impressive 64, and projections for the second quarter are even stronger, with an overall index score of 69. The DMA index numbers for the first quarter of 2004, in which 50 equals no change, indicated a strong quarter in every category. Net profitability remained steadily positive, at 62.

Against a backdrop of an improving U.S. economy, the direct and interactive marketing industry is continuing to experience sustained business growth. With those surveyed reporting both strong results and optimistic expectations for the next business quarter, "economic conditions" was overwhelmingly cited as the most dominant factor affecting member company performance.

"As the economy continues to pick up steam, our industry is reaping the benefits," said H. Robert Wientzen, president & CEO, The DMA. "In spite of having endured a challenging year politically, our members – for the third quarter in a row – are reporting exceptional growth and are poised for an even more successful 2004."

Expenditure Activity: New customer acquisition, e-mail, and Internet continue to be prime growth areas, while capital and operations budgets continue to diminish. Marketers also say they expect their direct marketing budgets to increase at the same levels as their total advertising budgets, both of which are expanding modestly.

Users of Direct and Interactive Marketing: Users’ sales figures for the first quarter were very positive with an average sales increase of 10 percent for the quarter. More than two-thirds of responding Users reported sales increases, while less than one-third reported declines.

Along with healthy sales figures, the Return on Investment (ROI) for the first quarter – at 59 – was higher than in the previous two quarters, while response rates were also up, with a 57 score.

Direct Response Agencies: As was the case in the fourth quarter of 2003, agency members again reported the best performance of any segment, with an aggregate revenue index of 66. Significantly, 45 percent of all agency respondents reported moving into a new client segment or product line.

Suppliers (Service Providers): Although perhaps not quite as healthy as the User and Agency segments, the Supplier segment also reported solid revenue growth relative to the same period last year, with an index score of 62. More than 26 percent of respondents in this category reported having employed a new marketing channel in the first quarter.

The DMA’s Quarterly Business Review provides current direct and interactive marketing statistics such as changes in sales revenue, customer response rates, marketing expenditures, and staffing levels, among other performance benchmarks. Results in the report come from online surveys conducted by The DMA’s Strategic Information Unit (SIU) from April 5, 2004 through April 21, 2004. The SIU received more than 180 survey responses.

To review The DMA’s current and past QBR reports, please visit www.the-dma.org/qbr

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 economic-impact study, direct and interactive marketing sales in the United States are projected to have surpassed $1.7 trillion in 2003, including $133 billion in catalog sales and $41 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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