This year, companies will spend more than $161 billion dollars on direct marketing in the United States, according to an independent study commissioned by The Direct Marketing Association. 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. And according to The Direct Marketing Association’s latest report on the economic contributions of direct marketing, there are many positive indications for continued future growth.
The DMA today previewed findings from U.S. Direct Marketing Today: Economic Impact 2005. The study reports the top-line results from The DMA/Global Insight econometric model of U.S. direct marketing activity for the nation as a whole, the B-to-C and B-to-B markets, the major direct marketing media, and for the economy’s 52 industry groups.
Among the study’s findings:
Forecast for Continued Growth: Sales driven by direct marketing are forecasted to grow by 6.4% through 2009, up from 5.3% in the period from 1999 to 2004. By comparison, overall U.S. sales are growing more slowly (4.8% for 2004-2009, as compared to 4.5% between 1999-2004).
Strong Jobs Outlook: In 2005, direct marketing advertising expenditures will directly support 10.6 million jobs. These include not only direct marketers but also other workers whose employment is required to fulfill increased orders generated by direct marketing. DM-driven employment is expected to grow by 2% annually through 2009.
High Return on Investment: For 2005, an investment of $1 in DM ad expenditures will return, on average, $11.49 in incremental revenue across all industries.
Significant Part of the "Advertising Mix": Direct marketing advertising expenditures accounted for 47.9% of total advertising in 2004, up from 46.9% in 1999.
Solid Performance for Traditional Channels: The most popular channels in 2005 continue to be direct mail ($49.8 billion in ad sales for catalog and non-catalog direct mail combined) and telephone marketing ($47 billion) or 31% and 29% of the total mix of DM advertising dollars respectively.
Rapid Growth for Interactive Marketing: Direct marketing is poised to become even more Internet-oriented in the next five years, as expenditures in Internet marketing and commercial e-mail are predicted to grow at least three times faster (18% and 19% compound annual growth) than expenditures in other media (5% growth forecast for other DM Media on average.)
"In recent years, the dramatic growth of the Internet and the increasing sophistication of database technologies have contributed to an extraordinary expansion of direct marketing and a seismic shift in what it is, how it’s used, and who uses it," said DMA president & CEO John A. Greco, Jr. "Direct marketing today is best described as a sophisticated, multi-channel process that spans virtually all media and is used by most industries. Its contribution continues to be substantial in absolute terms, and its impact is growing over time and relative to other economic activity, including mass advertising."
Editors Note: Data and charts from the report -- broken out by medium, market, state, and industry -- are available to members of the press via the contact information above. The complete printed report will be available for sale at DMA•05 (October 14-19 in Atlanta, GA). It can also be obtained after that date by calling The DMA Book Distribution Centre at 301.604.0187 or ordering online at www.the-dma.org/bookstore.
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. The 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 direct marketing process. Founded in 1917, The DMA today has more than 4,800 corporate, affiliate and chapter members from the US and 44 other nations, including 55 companies listed on the Fortune 100.
