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Direct Marketing Spending Increase Suggests Continued Economic Rebound

September 6, 2010
NEW YORK—Sept. 5, 2010—The Direct Marketing Association (DMA) today released its Quarterly Business Review (QBR) for the second quarter of 2010. DMA partnered with Winterberry Group, a leading strategic management consulting firm that helps advertising and marketing companies build shareholder value, on this report.

For the second consecutive quarter, direct and digital marketers reported improvements across virtually all key performance indicators during Q2 2010. These gains, for marketers and service providers alike, suggest a strengthening rebound. Marketers appear more optimistic about their future profitability, as their focus continues to shift steadily to digital channels including online display advertising, search, email, mobile, and other digital media.

"This report highlighted some positive and important information for all of us," said Yoram Wurmser, director of research for DMA. "Since the recession in 2008, marketers have been able to maintain profits mostly by vigilantly cutting costs. Marketers in Q2 finally have enough faith in their future profitability to start spending again, albeit cautiously. The rise of spending suggests the economic rebound that started in late 2009 has continued steadily. This spending is due in large measure by improved data analytics and confidence in new media channels, two factors that will be instrumental in future success and an economic recovery."

"Given the sluggish pace at which the broader economy has rebounded, it's certainly a good sign to see the direct and digital marketing community reporting two consecutive quarters of positive growth," added Jonathan Margulies, a director at Winterberry Group. "It's now clear that the digital revolution—driven by the maturation of online marketing channels such as search, display advertising and e-mail—is leading the recovery effort. We absolutely expect to see more marketer emphasis on data, technology and other critical 'digital drivers' in subsequent periods."

Some key findings include:

• Channel specific return on investment sustained its growth from last quarter across all direct and digital channels.

• As in previous quarters, digital marketing channels continue to command the lion's share of new marketing investment — with the email; social; search; mobile; and online display approaches joining the direct mail (non-catalog) and teleservices channel among those that grew in adoption versus both Q1 and the SQLY.

• Marketers cited improved data analytics tools and processes as the leading driver of new or expanded direct/digital marketing activity.

• Both marketers (53 percent) and suppliers (53.6 percent) noted that second-quarter profitability improved (in the aggregate) versus the previous quarter and SQLY.
 

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