While direct marketers anticipate more economic strength in 2003 than in 2002, they’re a ways off from being healthy, according to the Direct Marketing Association’s Quarterly Business Review.
While companies surveyed indicated somewhat higher profitability levels, shortfalls in revenue indicate this was due to cost-cutting measures as opposed to successful marketing initiatives. When actual revenue was compared against projected revenue, the results were off significantly, a finding that held true among direct marketers, agencies and marketing products and services providers.
This led one respondent to question the effectiveness of cost-control methods. “Today’s businesses are armed with a staggering array of successful tools and techniques for direct, database and digital marketing,” the respondent wrote. However, with the focus more on savings than initiatives, “these tools are not getting much of a workout in the current environment.”
Many respondents indicated that the economy weighed most heavily on their minds, although given the timing of the survey (early 2003), conflict overseas was a strong concern as well. Agencies and suppliers were more focused on client budgets and advertising, while marketers cited postal rates and reform more frequently than any other sector. Consumer confidence levels, privacy issues and government regulation rounded out the list of top concerns.
There were a few genuine signs of hope. Far more respondents indicated they had introduced a major new product line (16%), employed a new marketing channel (13.7%) or opened one or more new offices plants (9.1%) than closed an office or plant (7.4%) or discontinued a major product line (5.7%).
In discussing potential expenditures during first quarter 2003, respondents cited e-mail and Internet integration/e-commerce solutions most often, although these were closely followed by new customer acquisition, new product development or merchandising and database segmentation or modeling.
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