That faint glow of recovery detected by some direct marketers is coming from one source: consumers. They are spending more, and DMers are spending more to reach them.
In contrast, things are flat in the B-to-B sector, where firms are trimming their spending in response to revenue drop-offs.
Those are among the findings of Direct’s annual industry survey.
As with last year, companies that sell primarily to consumers were at the forefront, generating 54% of their revenue from DM, compared with 48% for both business-to-business and mixed-focus firms.
And that revenue has risen. Over 60% of the consumer-oriented companies said their sales had gone up, compared with less than one-third in 2002. On the B-to-B side, only 27% reported increases, a slight decline from last year.
This is in line with other studies showing that consumers are supporting the economy more strongly than businesses. It’s unclear if individuals are responding to increased marketing activity, or if they are spending more simply because they want to.
Either way, consumer marketers also had a more profitable year than anyone else. Forty-three percent reported margin jumps, compared with 28% for their B-to-B colleagues.
And their spending rose apace. In general, respondents allocated an average of 38% of their budgets to DM, but consumer firms spent 64%, a 5% increase over 2002. Meanwhile, DM spending rose by 2%
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