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DMA Releases New ‘The Power of Direct Marketing’ Industry Forecast

October 3, 2011
WASHINGTON, DC—Oct. 3, 2011—The Direct Marketing Association (DMA) released “The Power of Direct Marketing,” a biennial forecast of direct marketing’s economic impact on the US economy. First published in 1995, the report is released every other year in conjunction with DMA’s Annual Conference and delivers historic trends, current year estimates, and one-year and five-year projections for direct marketing expenditures, sales, ROI and employment. No other publication covers the economic impact of direct marketing channels with the same level of detail.

Direct Marketing continues to grow at a quicker pace than the overall U.S. economy. DM-driven sales will grow 7.1 percent this year to nearly $2 trillion, compared with 5.1 percent for sales overall in the states. Overall, 8.7 percent of U.S. GDP comes from direct marketing. “It’s fair to say that direct marketing is one of the current engines of economic growth for the US,” says Yory Wurmser, DMA’s director of marketing and media insights.

Direct Marketing Advertising Expenditures: A Larger Share of Total Advertising

Spending on direct marketing grew at a 5.6 percent clip to $163 billion in 2011 and now accounts for 52.1 percent of total advertising spending in the United States. This share has increased steadily over the past five years, a trend expected to continue through 2016.

A parallel trend may explain this. ROI for direct marketing in 2011 is projected at $12.03 of sales per dollar of expenditures, compared with $5.24 for general advertising.

Growth Led by Digital Channels

Much of this growth is driven by online media, which continue to outpace other channels in expenditure growth. DMA expects digital channels to continue to increase their share of the marketing budget from 19 percent in 2011 to 21 percent in 2012. The total spend on digital marketing has grown by $14.5 billion since 2006.

Mobile marketing will lead all channels in 2011, with an annual growth rate exceeding 50 percent. Social network marketing, search engine marketing, and “Internet other” (a catch-all for rich-media ads, advergaming, blogs, etc.) will all increase by more than 20 percent, and the two largest components of Internet advertising — search and display, will both grow at a rate over 18 percent. “Growth in advertising spending on online media over the past year exceeded our expectations,” says Wurmser.

Although spending on most traditional channels remains below the peak year of 2007, direct mail and DRTV both bounced back strongly in 2011. Direct mail expenditures will grow 4.6 percent to just over $50 billion, DRTV will have even higher growth (6.1 percent). As strong as these numbers are, direct response magazine, direct response radio, inserts, and telephone marketing all will experience negligible growth at real rates (adjusted for inflation). Spending on direct response newspaper will continue to fall.
 

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