(Direct Newsline) — Direct marketing industry growth declined in first quarter of 2006, falling below the robust growth levels they have attained during the last two years, according to the Direct Marketing Association’s quarterly business review.
The review, released late Thursday, combines findings from three online surveys of the DMA’s direct marketer, supplier and agency members to produce an aggregate industry revenue index. A score above 50 represents growth from the same quarter of the previous year; below 50 represents a decline and 50 represents no change. For Q1 2006, the review set that index at 59— from fourth-quarter 2005’s near-record high index of 68.
“Although not as robust as the last quarter of 2005, the first quarter of this year was generally healthy for marketers,” said Peter Johnson, VP of research and market intelligence for the DMA. “With the exception of decreased sales reported by the smallest companies, marketers across all sales tiers reported increased sales.”
Industry-wide, actual revenues versus projections declined from an index of 54 in Q4 2005 to 46 in Q1 2006. By segment, the indexes for revenue versus original projections declined for direct marketers (47) and DM suppliers (42), but DM agencies showed slightly better revenue than expected, with a Q1 index of 51.
The weighted average sales change among the direct marketer segment was 5.8% for the quarter, down substantially from the 12.4% increase reported in Q4 2005 but in line with more modest increases in the earlier 2005 quarters.
Looking at direct marketing specializations, the DMA quarterly review found that the B-to-B group had a weighted average sales change of 3.7% for Q1 2006— large decline from the 16.9% average posted in the final quarter of 2005. The catalog segment showed a revenue-versus-projection index of 52, higher than the declining indexes posted in all four quarters of 2005.
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