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Direct Marketing Sales Continue To Outpace Overall U.S. Sales Despite Industry Challenges
DMA reforecasts economic outlook; five-year forecast shows slowing growth
SAN FRANCISCO, October 21, 2002 - Despite unfavorable conditions in the U.S. economy, an updated report from the Direct Marketing Association (The DMA) found that ad spending and sales revenue attributed to U.S. direct and interactive marketing are forecast to grow at a slower pace than they have over the past decade. The report was unveiled today at The DMA's 85th Annual Conference & Exhibition in San Francisco.
"The DMA's re-projections reflect slower growth in ad expenditures over our 2001 projections," said H. Robert Wientzen, president & CEO, The DMA. "While these findings show slower growth in ad spending, the revenue outlooks remained unchanged."
According to The DMA's updated 2002 Economic Impact: U.S. Direct & Interactive Marketing Today, marketers this year are projected to spend $193 billion on direct response advertising, a 6.8 percent lower projection from last year's $206.1 billion. According to 2002 reprojections, direct response ad spending is forecast to compound 5.8 percent annually over the next five years, in comparison to last year's projected 6.5 percent annual growth rate through 2006.
Despite lower projected ad spending, direct marketing-driven sales are still projected to surpass $2 trillion in 2002. According to the most recent economic data, industry sales are projected to compound 8.3 percent annually over the next five years and hit $3 trillion in 2007. During that same period, the report estimates overall U.S. retail sales will grow just 5.5 percent annually.
"Despite increased direct response ad spending and revenue over the past year, direct and interactive marketers continue to feel the pinch of current economic conditions due to increased competition for consumers' dwindling dollars," Wientzen added. "As a result, the industry has increased its investment in more targeted and cost-effective marketing channels such as database marketing and interactive technologies to maximize profits."
Additional findings and analysis from The DMA's 2002 Economic Impact: U.S. Direct & Interactive Marketing Today include:
In 1992, The DMA commissioned The Wharton Economic Forecasting Associates (WEFA) to analyze 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 seventh edition of Economic Impact: U.S. Direct & Interactive Marketing Today breaks out data on direct marketing advertising expenditures, revenue, and employment for seven major media categories in 52 major industries.
The eight edition of the report will be available in the spring of 2003.
The DMA is the leading trade association for businesses interested in interactive and database marketing, with nearly 4,700 member companies from the United States and 53 other nations. Founded in 1917, its members include direct marketers from every business segment as well as the nonprofit and electronic marketing sectors. According to a DMA-commissioned study, direct and interactive marketing sales in the United States exceeded $2 trillion in 2002, including $118 billion in catalog sales and $30 billion in sales generated by the Internet. The DMA's Web site iswww.the-dma.org, and its consumer Web site is www.shopthenet.org.