In a tough economy when businesses are slashing budgets and wanting a clear ROI on every Rand spent, there’s nothing like direct marketing to validate your marketing investment.
DMA Releases New Power of Direct Report
DMA Releases New "Power of Direct"
Report; DM-Driven Sales Growth Outpace Overall Economic Growth
The Direct Marketing Association (DMA) today released The Power of Direct Marketing* (see Index below), a biennial forecast of direct marketings economic impact on the US economy.
First published in 1995, the report is released every other year in conjunction with DMAs Annual Conference and delivers historic trends, current year estimates, and one-year and five-year projections for direct marketing expenditures, sales, ROI and employment.
No other publication covers the economic impact of direct marketing channels with the same level of detail.
Direct Marketing continues to grow at a quicker pace than the overall US economy. DM-driven sales will grow 7.1% this year to nearly $2 trillion, compared with sales overall in the US, which will grow 5.1%. Overall, 8.7% of US GDP comes from direct marketing.
Its fair to say that direct marketing is one of the current engines of economic growth for the US, says Yory Wurmser, DMAs director of marketing & media insights.
Direct Marketing Advertising Expenditures: A Larger Share of Total Advertising
Spending in direct marketing grew at a 5.6% clip to $163 billion in 2011 and now accounts for 52.1% of total advertising spending in the US. This share has increased steadily over the past five years, a trend expected to continue through 2016.
A parallel trend may explain this. ROI for direct marketing in 2011 is projected at $12.03 of sales per dollar of expenditures, compared with $5.24 for general advertising.
Growth Led by Digital Channels
Much of this growth is driven by online media, which continue to outpace other channels in expenditure growth.
DMA expects digital channels to continue to increase their share of the marketing budget from 19% in 2011 to 21% in 2012. The total spend on digital marketing has grown by $14.5 billion since 2006.
Mobile marketing will lead all channels in 2011, with an annual growth rate exceeding 50%. Social network marketing, search engine marketing, and Internet other (a catch-all for rich-media ads, advergaming, blogs, etc.) will all increase by more than 20%, and the two largest components of Internet advertising search and display, will both grow at a rate over 18%.
Growth in advertising spending on online media over the past year exceeded our expectations, says Wurmser.
Although spending on most traditional channels remains below the peak year of 2007, direct mail and DRTV both bounced back strongly in 2011. Direct mail expenditures will grow 4.6% to just over $50 billion, DRTV will have even higher growth (6.1%).
As strong as these numbers are, direct response magazine, direct response radio, inserts, and telephone marketing all will experience negligible growth at real rates (adjusted for inflation). Spending on direct response newspapers will continue to fall.
Economy Slows at End of 2011 with Weak Growth Expected in 2012
The economic recovery has slowed significantly in the second half of 2011, with little improvement seen for 2012 even if the US avoids a double-dip recession.
Although direct marketing is expected to continue to outperform the broader US economy, growth in all channels will slide from 2011 numbers.
The fastest growth again will be with mobile marketing, which is expected to rise nearly 40%, followed by the various online channels, all with double-digit increases. Virtually all traditional media, however, will see growth rates either in the low single digits or in negative territory.
9.2 Million Jobs Generated by Direct Marketing
The increased economic activity produced by direct marketing will support 9.2 million jobs in the US in 2011.
Companies continue to work on improving their productivity, which limits the number of new jobs created. Despite the strong growth in sales and expenditures in direct marketing, a net of only 66,000 new jobs will be created in 2012.
Preparation of the Report
DMAs The Power of Direct Marketing Report was prepared in August 2011 using the economic model of US direct marketing activity updated every year for DMA by Global Insight. Incorporating the most recent data available on developments in all sectors of the US economy, it aims to help marketers plan expenditures, sales, ROI, and employment for the 16-month period through the end of 2009.
The report is available for download on DMAs online bookstore. The cost is $295 for DMA members and $595 for non-members. To purchase, please click here.
About Direct Marketing Association (DMA)
The Direct Marketing Association is the worlds largest global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques.
DMA advocates 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 end-to-end direct marketing process.
Founded in 1917, DMA today represents companies from dozens of vertical industries in the US and 48 other nations, including half of the Fortune 100 companies.
In 2011, marketers commercial and nonprofit will spend $163 billion on direct marketing, which accounts for 52.1% of all ad expenditures in the United States. Measured against total US sales, these advertising expenditures will generate approximately $1.96 trillion in incremental sales.
In 2011, direct marketing accounted for 8.7% of total US gross domestic product. Also in 2011, there were 1.3 million direct marketing employees in the US. Their collective sales efforts directly support 7.9 million other jobs, accounting for a total of 9.2 million US jobs.
The Power of Direct: Relevance. Responsibility. Results.
* The Power of Direct
The best way to thrive in uncertain times is with powerful information. For direct marketers, no other report covers the full range of insights found in The Power of Direct Marketing.
The 2011 - 2012 edition provides top-line comprehensive analyses and forecasts from the DMA/Global Insight economic model on the impact of direct marketing across all industries and sectors of the economy.
Access the latest top-line data, highlighting:
- Return on Marketing Investment
- DM Advertising Expenditures
- DM-Driven Sales
- DM-Driven Employment
- DM Impacts by State and by Industry
15 major channels:
- Direct mail (Non-catalog)
- Direct mail (Catalog)
- Internet Display Advertising
- Search Engine Marketing
- Social Networking sites
- Internet (Other)
- Direct Response Television
- Direct Response Radio
- Direct Response Magazines
- Direct Response Newspapers
- Direct Response Insert Media
50 states and DC
4 intended purpose categories:
- Direct order
- Lead generation
- Retail purchase
An online presence can take several forms and have any one of multiple objectives.
A Glimpse of the Future
Three years from now - or perhaps sooner - the direct marketing scene (the scene not the techniques) will be barely recognisable from that which we know and love today: the carefully delineated, agencies; the internecine warfare; the specialists and non- specialists; and so on, will all begin to disappear.
In the recent past, the position and relevance of direct marketing (DM); in the information age has been viewed as a 'dying' facet of the advertising industry. However, research and trends have proved that direct marketing will have an impact on the economic growth and lead the industry in one-to-one marketing.
Steve Cuno from Response Advertising, USA, says: "Whenever I'm asked to sum up the differences between traditional and direct response advertising, I oversimplify it: Traditional advertising seeks to create positive awareness of a product in enough minds so that your target market will eventually reach for your brand. Direct response advertising improves on that."