DM community in 15th straight quarter of growth: DMA review

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The greater direct marketing community, which includes direct marketers, suppliers and agencies, has collectively experienced its 15th consecutive quarter of economic growth.

That is a key finding of the Direct Marketing Association's Quarterly Business Review for the first quarter of 2007.

"In general we saw a healthy bottom line for the direct marketing community during the first quarter of the year," said Anne B. Frankel, a senior research manager in research and market intelligence at the DMA. "Revenue compared to the same quarter last year showed growth for Q1. Equally heartening, profitability was also strong in Q1."

In the QBR index, a score of 50 or above represents growth. According to the DMA's latest QBR report, Q1 findings for the direct marketing community indicate strength in revenue versus same quarter last year, at 61, and profitability, at 69.

Moreover, all three of the QBR's surveyed direct marketing community segments are upbeat about the current quarter, with an index reading of 66. Individually, agencies project the greatest Q2 revenue growth at 68, followed closely by marketers at 67 and suppliers at 62.

In Q1, agencies posted the best revenue versus SQLY results at 63, while marketers reported the highest profitability figures at 71.

Revenue versus SQLY for marketers was a close second at 62, and suppliers came in at 59.

Direct marketing communitywide profitability indexes were stronger, however, with an overall figure of 69. Numbers for each segment showed marketers had an index of 71, agencies reached 69 and suppliers had 67.

The report showed that actual versus projected revenue in Q1 fell short of expectations at 48 in the greater direct marketing community, down two points from Q4 2006's number of 50. Segment by segment, the numbers were 49 for marketers, 51 for agencies and 45 for suppliers.

According to the DMA's latest QBR, the direct marketing community is concerned about the postal rate increases, which marketers and suppliers both cite as a factor likely to affect their Q2 performance. The new postal rates took effect May 14.

Marketers are also focusing on issues regarding the economy; consumer confidence; marketing issues, including response rates; technology and capital investment; the Internet, e-commerce, and e-mail; and list, data and segmentation issues.

Meanwhile, QBR reports that agencies and suppliers are most worried about their client budgets and advertising expenditures.

The DMA's QBR for the first quarter of 2007 is based on three online surveys of DMA marketer, agency and supplier member companies. The surveys were conducted by DMA's research and market intelligence department from April 11-26. The DMA received 305 survey responses.

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