Don’t bet the farm on the good news reported in the WEFA study yesterday.
A survey conducted by the Direct Marketing Association shows far more depressing results.
Of 500 companies surveyed in August, 60% reported that their year-to-date revenue fell below projections. Less than a quarter came in on plan, and only 12% exceeded it.
But the results were worse when the DMA went back for an update in late September.
The second batch of responses showed that only 7% projected that their sales would grow during the three-month holiday period, compared with 34% who said the same thing in August.
In addition, 51% predicted that their sales would decline in the quarter, compared with 13.2% in August. Forty-three percent expected their sales to remain the same.
“This year, U.S. marketers will spend $197 billion on direct response expenditures,” said H. Robert Wientzen, president of the DMA, in a statement. “While that figure is a 3.6% increase over last year’s ad spending, the reality is that it’s about half the annual growth rate we’ve seen over the past five years.”
Meanwhile, spending has slowed in several areas.
In August, 43% of respondents reported cutbacks in hiring, and 42% in spending on general operations. Another 32% reduced their mail circulation, and 30% trimmed their paper usage.
Because of the downturn, though, 60% said they would increase their spending on prospecting. Over half planned to increase their outlays for customer service, and 47% reported they would spend more on new product development and merchandising. Another 45% planned to boost their spending on Internet/e-commerce solutions.
