DIRECT Survey Shows Slowdown of Revenue Growth
Chicken Little, look to your eggs: The sky may not be falling, but it appears to be rising at a much slower rate, according to preliminary data from DIRECT’s annual industry forecast survey.
At this time last year, 56% of the respondents said their direct marketing revenue would increase over the previous year’s level. This year, only 37% said their revenue would improve over 1998’s, while an equal amount said it would stay the same.
Although not as dramatic, fewer marketers see gross margins rising as well. In 1998, just under 40% said margins would increase; today, that figure hovers at 36%. Marketers seem to realize this, and are spending more on DM. Nearly six in 10 indicated their company plans to increase DM spending in 2000, up from just over half of all respondents last year.
One set of findings that seems to be holding steady year after year is the role DM plays within surveyed companies. On average, respondents said DM accounted for almost 43% of their total revenue while constituting 42% of their marketing budget. Half indicated that DM brought in less than 30% of their firm’s revenue, while 22% said it was responsible for more than 90% of their income–figures virtually unchanged from last year’s preliminary results.
The survey, conducted by The Wagner Group, New York, was sent to 1,000 randomly selected readers of DIRECT. Readers were asked about their direct response activity, with special focuses on database marketing, enterprisewide capabilities, mailing list use and e-commerce.
The first article in a three-part series describing the survey’s results, as well as an analysis of its findings, will appear in the December issue of DIRECT.
