DMA: Industry Stays Optimistic
The DMA said many direct marketers had trimmed costs and lowered expectations to maintain profitability. As a result, they anticipate 2003 will bring better revenue than last year.
Notable industry segment trends included:
· Direct response ad agencies were most optimistic for 2003, projecting "moderately better" revenue. Agencies said their client ad budgets were off significantly in fourth-quarter 2002. Like other segments, agencies are consolidating offices and cutting capital expenditures to the bone while investing in customer acquisition. As a result, the number of agencies that closed offices outnumbered those who opened offices last year 10 to 1.
· The Catalog/Direct Mail segment experienced moderate profit and improved revenue in the fourth quarter compared with 2001. Catalogers reported the most disappointing results for fourth-quarter 2002 relative to beginning-of-year projections. On the spending side, this segment continues to move strongly into e-mail marketing and the Internet while reducing its operations and capital budgets.
· Consumer Products and Services had strong growth relative to last year. These marketers anticipate increasing their direct response budget and investing more in e-mail marketing and Internet solutions.
· Business-to-Business projected the highest across-the-board increase in spending for first-quarter 2003.
· Capital and operational budgets are neutral or declining. However, marketers plan to invest more in e-mail marketing, Internet solutions, new product development and better targeting capabilities through database segmentation.