Direct marketing expenditures will once again outpace general advertising in 2008 and 2009, and is on track to capture 53% of total advertising expenditures next year, according to a yearly forecasts report from The Direct Marketing Association (DMA).
‘The Power of Direct Marketing’ Report found that ad spend is continuing to move from general advertising to direct marketing in the US.
The DMA predicts that marketers will make $176.9 billion in direct marketing ad spend by the end of 2008, which represents a modest 3% increase over the $171.7 billion actually spent in 2007.
In 2009, total direct marketing ad spend is expected to increase by 3.5%, making $183.1 billion – with the DMA predicting that above average spending growth will take place in commercial email and internet marketing as businesses take advantage of the continued move towards electronic purchasing.
This year, financial services, professional services and retail are among the top industries in direct marketing spend, however, a number of factors are said to have contributed to slower growth in 2008. These include the worsening impact of lower home sales, a meltdown in mortgage lending, lower furniture, appliance, and automobile sales and higher energy prices.
In terms of direct marketing sales, marketers should expect 3.7% revenue growth by the end of 2008, reaching revenues of $2,058 billion from an actual $1,985 billion in 2007, despite the current economic climate, the DMA said.
Sales generated from direct marketing are forecast to grow by 4.5% to $2,150 billion next year – with the financial services, information, transportation services and wholesale trade sectors expected to see above-average sales growth.
“Direct marketing’s integration of multiple sales channels and highly targeted offers means that businesses utilizing direct marketing typically outperform their competitors, even when sailing into financial headwinds,” said Peter A. Johnson, lead author of the report.
Last month, research from Ball State University and ExactTarget found that young people in the US are more influenced by direct marketing, while 94% of retired consumers have been influenced by some sort of direct marketing to make a purchase (see Younger People Prefer Email Ads).
However, The Q2 2008 Bellwether Report, which was released in July with the third consecutive quarter of cuts and to the greatest extent since 2001, said direct marketing saw the greatest downward revision in the survey’s history, down by 9.1%.
The report said the direct marketing category had seen the longest period of sustained budget trimming of all categories, with cost savings gained from moving from post to email (see Largest Marketing Budgets Cuts Since 2001).
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