Direct marketers boosted their bottom lines during the third quarter, according to a quarterly business review by the Direct Marketing Association. Companies averaged a revenue index of 62, roughly the same as the third quarter of 2003. (In the DMA’s index, numbers over 50 represent growth, and those under 50 mean decline).
“This gives us our fifth consecutive quarter of solid growth,” said DMA president John A. Greco Jr. during the DMA’s Annual Conference & Exhibition.
Individual segments did even better. Agencies posted an index of 67 and suppliers 65. But end users (client companies) reported an index of 55.
Meanwhile, the overall profitability index hit 71, a 10 point improvement over 2003. End users kept pace, recording a profitability index of 70. The index for agencies was 74, and for suppliers 68. The bad news may be that revenue didn’t quite match up to projections for some companies. The industrywide index was 50. Agencies had an index of 56, and suppliers 49. But end users reported 44.
Greco also reported that direct response ad spending totaled $186 billion , a 9% increase over 2003. The number is projected to hit $240 billion in five years. Direct order sales are also expected to grow, hitting $660 billion this year and $930 billion in 2009. When lead- and traffic-generation sales are added, U.S. marketers will sales of $2.2 million in 2004 and $3.1 trillion in 2009.
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