Direct Marketing Expenditures Account for 50% of Total Advertising Expenditures, DMA's 2007 'Power Of Direct Marketing' Report Unveils

Oct 16, 2007, 01:00 ET from Direct Marketing Association

    CHICAGO, Oct. 16 /PRNewswire/ -- Despite a US economy that shows signs
 of softening in key areas, growth is predicted in direct marketing (DM)
 expenditures, sales, return on investment (ROI), and employment through
 2008, as reported in The Power of Direct Marketing, the Direct Marketing
 Association's (DMA) annual forecast of direct marketing's economic impact
 on the US economy, including advertising expenditures and sales. The 2007
 edition of the DMA report, which was first published in 1995, was released
     "For the first time ever, direct marketing represents more than 50
 percent of total advertising expenditures in the US, growing faster than
 total advertising spending and the US economy as a whole," said Dr. Peter
 Johnson, DMA's research strategy and platforms vice president, and lead
 author of the report. "Marketers are moving dollars into direct marketing
 because of its higher ROI relative to other forms of advertising. This
 makes 'direct' a more reliable engine for sustaining sales, incomes, and
 jobs at a time when the mortgage and energy markets are heightening
 economic uncertainty."
     According to DMA's latest report on the economic contributions of
 multichannel direct marketing, positive indicators of continued growth from
 direct can be found in most sectors of the economy. "Overall," said
 Johnson, "business performance in 2007 is likely to be measurably brighter
 than it would otherwise be, thanks to the effectiveness of direct
     Direct Marketing Advertising Expenditures:
     Moderate Growth in 2007, Strong Growth in 2008
     The $173.2 billion in direct marketing advertising expenditures that
 marketers are predicted to make by the end of 2007 represents a modest 4.4
 percent increase over the $166 billion actually spent in 2006. The actual
 2006 figure did not achieve the higher levels that initially had been
 predicted for it at this time last year due to the greater-than-anticipated
 decline in home sales, lower automobile sales, and higher energy prices.
     Looking forward, the growth rate in direct marketing expenditure for
 2008 is expected to bounce back to 5.7 percent, or $183.1 billion in direct
 marketing advertising expenditures. Above-average spending growth is
 expected in commercial e-mail, Internet marketing, DRTV, and direct mail
 (including catalog).
     Direct Marketing Sales:
     Modest Growth in 2007, Strong Growth in 2008
     Direct marketers should expect a reasonably successful 2007, and
 realize about 5.2 percent annual growth in sales. This figure is 1.5
 percentage points lower than the growth recorded for 2006, and is due to
 the economic slowdown that continued through the middle of 2007. In 2007,
 total US direct marketing sales are projected to hit $2.025 trillion.
     The current 2008 revenue forecast for direct marketing is even more
 optimistic. DMA's new report predicts solid growth of 6.6 percent next
 year. In 2008, total US direct marketing sales are expected to surpass
 $2.158 trillion.
     The biggest improvements in 2008 direct marketing revenue growth are
 expected in financial services, transportation, and utilities. On the other
 hand, utilities, natural resources, construction, and government revenues
 from direct marketing are forecast to grow at the slowest rate next year.
     US Growth to Receive Boost from Direct Marketing in 2007-2008
     "As in 2006, direct marketing will continue to help sustain the overall
 US economy," said Dr. Johnson. In 2007, direct marketing advertising across
 all economic sectors is expected to account for over $1.41 trillion of
 final demand nationwide, representing 10.2 percent of total US GDP.
     Key Economic Impact Findings:
     -- Strong Jobs Outlook:  In contrast to the forecasts for both
        expenditures and sales, the overall picture for direct marketing
        employment looks better for 2008 than in 2007.  In 2007, direct
        marketing will directly support 10.6 million jobs.  This employment
        figure is expected to grow by 2.2 percent in 2008.
     -- High Return on Investment:  For 2007, an investment of $1 in direct
        marketing advertising expenditures is predicted to return, on average,
        $11.69 in incremental revenue across all industries.
     -- Growth for Interactive Marketing:  Expenditures in Internet marketing
        and commercial e-mail will continue to grow in 2007-2008, with
        predicted expenditures of $19.7 billion in 2007 and $23.6 billion in
     DMA's The Power of Direct Marketing report was prepared in August 2007
 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 2008.
     To purchase the 2007 Power of Direct Marketing report, visit DMA's
 online bookstore at
     About Direct Marketing Association (DMA)
     The Direct Marketing Association ( is the leading
 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 nearly 3,600 companies from dozens of vertical industries
 in the US and 50 other nations, including a majority of the Fortune 100
 companies, as well as nonprofit organizations.
     The Power of Direct: Relevance. Responsibility. Results.

SOURCE Direct Marketing Association