The Direct Marketing Association’s Quarterly Business Review reports a record revenue index of 69 in the fourth quarter of 2004.
This represents the highest index number in any quarter since the inception of the review in 2002, and is the sixth consecutive quarter of positive results for the DM industry. Projections for the first quarter of 2005 continue to be strong, with all DM segments — users, agencies, and suppliers — predicting continued growth.
In the QBR index, a score of 50 represents no change in the industry’s performance this quarter versus the same quarter last year. Scores above 50 represent growth and those below 50 represent a decline.
“The industry continues to enjoy a period of robust growth, ” said Peter A. Johnson, director of the DMA’s strategic information unit in a statement. “Even more encouraging, direct marketers are expecting this trend to continue into 2005.”
Within the DM user segment, all performance metrics showed increases, with the QBR revenue index for the segment at 68 and the profitability index at 72. For the user segment as a whole, the average sales increase was 9.4% in the fourth quarter of 2004, compared with 6.2% in the third quarter. The QBR projected revenue index for the segment for the first quarter of 2005 was 66.
Also, within the user segment, the business-to-business market reported a revenue index of 66 and a profitability index of 63. The QBR projected revenue index for the first quarter of 2005 was strong at 70.
In the catalog segment, the QBR revenue index at 55 was slightly higher than the same quarter of last year. However, the QBR profitability index was substantially higher, at 71. Catalogers also expect revenues to continue to grow in the first quarter of this year, with a QBR projected revenue index of 61.
The consumer products or services segment enjoyed a strong fourth quarter with a revenue index of 81 and a profitability index of 74. This segment also expects revenues to continue to improve in the first quarter of 2005, with a projected revenue Index of 76.
The fourth quarter was also strong for the DM agency segment, which reported revenue and profitability indexes both registering at 73. For the first quarter of 2005, the segment has a QBR projected revenue index of 70.
The DM supplier segments reported higher revenue and profitability for the quarter, with a QBR revenue index of 68 and a QBR profitability index of 66. In addition, supplier employment grew by three index points in the fourth quarter. DMA members in this segment expect revenue to continue growing in the first quarter of 2005, with a QBR projected revenue Index of 65.
“The market continues to be better on a quarter-by-quarter basis from the previous three to four years,” said Ron Jacobs, president of Jacobs & Clevenger.
“2004 was a good year,” said Robert A. Sukenik, president of Integrated Response Marketing. “We’ve acquired some very exciting new clients and managed to retain and grow our existing clients with very little defection.”
The DMA’s Quarterly Business Review is based on three online surveys of DMA member companies conducted by the DMA’s Strategic Information Unit from January 10, 2005 through January 21, 2005. The DMA received 209 survey responses.
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