DIRECT MARKETERS CONTINUE TO ENJOY ROBUST GROWTH

New York, NY, March 3, 2005- The Direct Marketing Association’s (The DMA) Quarterly Business Review (QBR) reports a record Revenue Index of 69 in the fourth quarter of 2004. This represents the highest Index number in any quarter since the inception of the Quarterly Business Review in 2002, and is the sixth consecutive quarter of positive results for the direct marketing industry, attesting to its overall robustness. In addition, projections for the first quarter of 2005 continue to be strong, with all direct marketing (DM) segments – Users, Agencies, and Suppliers – predicting continued growth.

In the QBR index, a score of 50 represents no change in the industry’s performance this quarter versus the same quarter last year. Scores above 50 represent growth and those below 50 represent a decline.

"The industry continues to enjoy a period of robust growth, as the benchmark QBR Revenue Index of 69 emphatically demonstrates," said Peter A. Johnson, director, strategic information unit, The DMA. "Even more encouraging, direct marketers are expecting this trend to continue into 2005."

Within the DM User segment, all performance metrics showed increases, with the QBR Revenue Index for the segment at 68 and the QBR Profitability Index at 72. For the User segment as a whole, the average sales increase was 9.4 percent in the fourth quarter of 2004, compared with 6.2 percent in the third quarter. The QBR Projected Revenue Index for the segment for the first quarter of 2005 was 66.

"Such robust growth in revenue, profitability and sales demonstrates that more and more companies are leveraging innovative DM products and techniques to improve customer relationships," said Johnson.

Also, within the User segment, the business-to-business market reported a QBR Revenue Index of 66 and a profitability index of 63. In addition, the QBR Projected Revenue Index for the first quarter of 2005 is strong at 70.

Within the catalog segment of Users, the QBR Revenue Index at 55 was slightly higher than the same quarter of last year. However, the QBR Profitability Index was substantially higher, at 71. Catalogers also expect revenues to continue to grow in the first quarter of 2005 with a QBR Projected Revenue Index of 61.

The Consumer Products or Services segment enjoyed a very strong fourth quarter with a QBR Revenue Index of 81 and a QBR Profitability Index of 74. This segment also expects revenues to continue to improve in the first quarter of 2005, with a Projected Revenue Index of 76.

The DM Agency segment also enjoyed a strong fourth quarter, with the segment’s QBR Revenue and Profitability Indexes both registering at 73. For the first quarter of 2005, the segment has a QBR Projected Revenue Index of 70. One interesting trend within this segment is that there is increasing interest in the use of database marketing by companies that had been almost exclusively using mass-marketing strategies.

"While they may not call themselves direct marketers, it is difficult, if not impossible, to find a major company in the United States today that does not use direct marketing strategies in their overall marketing mix," noted Johnson. "In fact, more than 50 percent of all ad dollars are spent on direct marketing."

The DM Supplier segments enjoyed higher revenue and profitability for the quarter, with a QBR Revenue Index of 68 and a QBR Profitability Index of 66. In addition, supplier employment grew by three index points in the fourth quarter. Many DM Suppliers introduced major new product lines or employed new marketing channels in this quarter. DMA members in this segment expect revenue to continue growing in the first quarter of 2005, with a QBR Projected Revenue Index of 65.

The DMA’s Quarterly Business Review is based on three online surveys of DMA member companies conducted by The DMA’s Strategic Information Unit from January 10, 2005 through January 21, 2005. Altogether The DMA received 209 survey responses. For a complete copy of The DMA Quarterly Business Review please visit The DMA’s Web site at http://www.the-dma.org/qbr/.

About The DMA

The Direct Marketing Association (www.the-dma.org) is the leading trade association for businesses and organizations interested in direct, interactive, and database marketing, which in 2004 generated more than $2.3 trillion in US sales, including $143.3 billion in catalog sales and $52.5 billion in Web-driven sales. In addition to catalogs and the Web, DMA members employ a wide variety of marketing media, including mail, e-mail, telephone, newspapers and magazines, interactive television, and radio, among others. Founded in 1917, The DMA today has more than 5,200 corporate, affiliate, and chapter members from the US and 44 other nations. Reflecting the significant and growing role that direct marketing plays in today's advertising mix, The DMA's membership represents marketers from every business segment, including catalogers, Internet retailers, retail stores, nonprofit organizations, advertising agencies, financial services providers, book and magazine publishers, book and music clubs, industrial manufacturers, and a host of other vertical segments, as well as the service industries that support marketers.

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