Direct marketers are spending a little more this year. They’re focusing a little more on existing customers, traditionally a very profitable segment. And more are relying on mailing to in-house lists of both customers and previously identified prospects — 80%, compared with 74% a year ago.
But despite these efforts, which would seem to be bottom-line driven, fewer DMers anticipate margin increases this year.
This adds up to disturbing rumblings below the surface. Because if marketers are spending more on customers, and not anticipating the margins they’ve seen in the past, it doesn’t say good things about how they view the success of their upcoming efforts.
Much of the drop in margin projections comes from the consumer side. Only one-third of these marketers report higher margins this year, compared with nearly one-half in 2006. In contrast, around 30% of business-to-business marketers say their margins were up, a figure consistent with last year’s results.
These patterns hold true when marketers look at 2008. Roughly the same number of consumer and B-to-B marketers foresee increases in DM expenditures. But this year significantly fewer B-to-B marketers than consumer firms say their spending will drop.
Compared with 2006, fewer consumer companies report revenue increases during the first nine months of the current year. In contrast, a greater number of B-to-B firms claim revenue levels that stayed the same or increased.
These results may reflect the pessimism of the survey time period. Much of the research was conducted in the immediate aftermath of news reports about credit and housing woes.
Full details of Direct’s annual forecast survey are available in the December issue of Direct magazine.
Network
