DMA: Marketers increase Q3 spending, see revenue gains

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Marketers reported spending increases last quarter, according to the Direct Marketing Association's (DMA) Quarterly Business Review. It was the first time in more than a year they've done so.

Marketers noted an improvement in return on investment (ROI) across nearly all tracked direct and digital channels in Q3. They also said digital channels will continue to be a primary focus of any new marketing investment.

More than four in five (83.5%) respondents said their investment in direct and digital marketing grew or remained steady compared to the previous quarter. Compared to Q3 2009, 84.9% of marketers reported an increased investment in direct and digital marketing.

Nearly half (48.1%) said their third-quarter direct- and digital-generated sales revenues had improved, while only 9.5% said revenues declined in the same period. Compared to Q2 of 2010, 36.7% reported a revenue increase while 3.2% saw a decrease.

“The report in general was unexpectedly strong,” said Yoram Wurmser, director of marketing and media insights at DMA. “Business is bouncing back and organizations are building cash reserves [to allow] money to flow into marketing again.”

Both marketers and suppliers said they experienced a third-quarter improvement in profitability, with the majority (54.8% of marketers and 55.4% of suppliers) reporting higher profits than the same period of last year.

Respondents said they continued to invest in digital channels; search, e-mail, social, mobile and online display all demonstrated gains versus Q2 2010 and Q3 2009. Marketers also reported a slight increase in investment in place-based media and direct response broadcast over the same period.

However, marketers are not adding staff as a result of the spending increases, according to the report. More than three quarters (76.1%) of marketers and 69.3% of suppliers did not gain or lose staff during Q3 2010. However, nearly twice as many marketers and suppliers increased staff (28.2% and 36% respectively) than reduced staff (13.7% and 17.5% respectively), compared to the same period of last year.

The company surveyed respondents from 243 marketers and 205 marketing service providers. The report was written with strategic management consulting firm Winterberry Group and released December 8.

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