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Direct Marketing Sales and Advertising Expenditures Increase Despite Challenging Year
Source: USA Direct Marketing Association

Despite a year marred by economic uncertainty and public concern over anthrax-in-the-mail, a new report from The DMA found that US sales revenue from direct and interactive marketing rose 9% last year to $1.86 trillion from $1.71 trillion in 2000. According to The DMA's Economic Impact: US Direct and Interactive Marketing Today study, direct marketing sales growth, over the next 5 years, will outpace overall sales growth in the U.S. by 3.5 percentage points.

"In an industry that accounts for nearly 8.6% of the US economy, it is no surprise that direct and interactive marketing is still growing at a healthy pace," said Robert Wientzen, president & CEO of the DMA. "The rise during 2001 is particularly noteworthy considering that the year's direct mail growth for the second half of the year was marred by public concerns over the possibility of anthrax being sent through the mail."

Direct marketing advertising dollars are working harder and will lead to higher gross profit margins.
According to the study, the direct and interactive marketing industry can expect to see continued economic growth. Sales are projected to reach more than $2 trillion in 2002. Overall direct marketing sales growth is forecast at 8.3% annually through 2006, while total US sales growth is estimated at a significantly lower growth rate of 4.8% per year.

Industries that contributed to direct and interactive marketing sales growth in 2001 included:

  • Business services ($176.9 billion)
  • Non-store retailers such as cataloguers ($152.2 billion)
  • Real estate ($63 billion) and
  • Insurance carriers/agents ($61.4 billion).

Key growth industries that are poised to generate direct and interactive sales revenue during the next 5 years include:

  • Health services (15.8%)
  • Electrical machinery/equipment (12.6%)
  • Security/commodity brokers (12.4%)
  • Social services (11.6%) and
  • Insurance carriers/agents (11.2%)

The study also reported that spending on direct and interactive marketing rose 3.6% to $196.8 billion in 2001 from $189.9 billion in 2000. According to the latest findings, direct and interactive marketing represents more than 55.2% of total US traditional advertising expenditures. (Our 'guestimate' is that SA is around 17%).

"During times of economic uncertainty, marketers are more focused on ensuring that their limited advertising dollars are working hard and reaching target audiences," said Wientzen. "As companies slashed their traditional advertising budgets last year, the trend was to shift more dollars and resources into direct marketing practices as a cost effective, measurable way to boost sales."
Direct marketing advertising dollars are working harder and will lead to higher gross profit margins.

From 2001 to 2006, direct marketing is forecast to become an increasingly efficient advertising tool with sales projected to grow steadily, compared with continued slower growth in both ad spending and employment. While direct marketing sales growth between 2001 and 2006 are expected to grow by 8.3%, ad spending is projected to grow at a slower annual rate of 6.5% per year.

Growth of our industry
Although we are in the infancy of direct marketing in South Africa, the potential is there for substantial growth, and for direct marketing to take its rightful place in the marketing mix - as the measurable and accountable medium.

Direct Marketing is your guarantee of future success
In South Africa, there's a huge demand for skilled direct or relationship marketers, but very few experienced practitioners to satisfy the demand. That means relationship marketing offers you one of the few career paths to high earnings in the future. And if you have the entrepreneurial spirit, relationship-marketing skills are indispensable to succeeding in your own business. To find out more about South Africa's premiere accredited Direct Marketing Program, Click Here.

In 1992, The DMA commissioned The Wharton Economic Forecasting Associates (WEFA) to analyse the scope of direct marketing in the United States and develop an economic model for historical analysis and forecasting purposes. The recently updated 2002 DRI-WEFA 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 7th Edition of Economic Impact: US Direct & Interactive Marketing Today breaks out data on direct marketing advertising expenditures, revenue, and employment throughout 7 major media categories in 52 major industries. The full report, available in late June, is priced at $495 for DMA members ($595 for non-members) and can be obtained by calling The DMA Book Distribution Center at 301.604.0187 or online at http://www.the-dma.org/cgi/offer?uid=000197.

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