DMA Unveils New Multichannel Marketing Report

Atlanta, GA, October 19, 2005 — Direct Marketing Association today unveiled its new Multichannel Marketing 2005 Report, a comprehensive roadmap for best practices and trends in channel integration within the catalog, retail, and e-commerce infrastructures. The report, produced in partnership with DMA members DoubleClick and Abacus and with expert commentary by Mark Swedlund, senior vice president, Haggin Marketing, creates benchmarks that can be used by direct marketers to leverage multichannel marketing opportunities and increase profitability.

"In recent years, multichannel marketing has fueled the evolution of the direct marketing process," said Ann Zeller, vice president, Information & Special Projects, DMA. "The new report provides direct marketers with invaluable tools for optimizing the multitude of new online opportunities that exist today. It also underscores a more focused effort by marketers to be customer centric."

DMA’s newest research Multichannel Marketing 2005 is intended to help marketers better understand multichannel marketing dynamics and to stay ahead of the e-marketing curve. The report provides strategies for tracking response rates for online and offline buyers; developing effective tracking methods for customer acquisition and retention; calculating LTV across single and multiple channels and optimizing circulation, merchandising, and fulfillment opportunities are some of the report’s key findings.

Many new advertising strategies and tactics have influenced the online marketing realm. Catalogers, retailers, wholesalers, and Internet stores are able to choose from shopping aggregators, search engine advertising and optimization, affiliates, and pay-per-performance vendors to compete both online and offline. As potential marketing channels expand, the ability to track which channel drives sales is becoming increasingly complex – and important.

While online marketing options are increasing, so are obstacles to e-mail deliverability as well as issues regarding consumer trust such as phishing, spoofing, spyware, etc. All these factors influence not only which messages get through, but also those messages a potential customer may consider to be spam.

Survey respondents reported that an increasing percentage of orders are being placed via the Web—38 percent in 2004. Internet sales, as a percentage of total sales, are projected to increase to 43 percent in 2007 and to 46 percent by 2009.

Respondents were asked what percentage of Web sales were considered to be new customers as opposed to customers who had previously used other channels. Results show that 33 percent of sales were incremental — sales that would not otherwise have occurred; 53 percent shifted from phone or mail, up from 42.2 percent in 2003.

Sixty-five (65) percent of respondents believe that a better ROI is yielded when a multichannel approach is incorporated into their direct marketing campaigns. Only 7 percent indicated that a higher ROI was achieved using a single channel process.

When asked the top benefits of online marketing, respondents’ top four responses were increased revenue (73 percent), greater visibility (58 percent) cost savings (56 percent), and reaching new customers/new segments(54 percent).

Close to three quarters (74 percent) of companies’ e-mail marketing budget was spent on customer retention as opposed to customer acquisition.

# # #

The Direct Marketing Association (www.the-dma.org) is the leading global trade association of business and nonprofit organizations using and supporting direct marketing tools and techniques. DMA advocates industry standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education and networking opportunities to improve results throughout the entire direct marketing process. Founded in 1917, DMA today has more than 4,800 corporate, affiliate, and chapter members from the US and 46 other nations, including 55 companies listed on the Fortune 100.

In 2005, companies will spend more than $161 billion dollars on direct marketing in the United States. Measured against total U.S. sales, these advertising expenditures are expected to generate $1.85 trillion in increased sales in 2005, or 7% of the $26 trillion in total sales in the U.S. economy (which includes intermediate sales). All together, direct marketing will account for 10.3% of total U.S. GDP in 2005.