Direct mail advertising company Advo Inc., Wilton, CT, reported last week that its first-quarter profit dropped because of expansion-related costs. During the three months ended Dec. 25, the company posted a profit of $8.1 million, down from $11.2 million a year ago.
The quarter included the distribution expense related to advertising program expansions in southern California, Pittsburgh and Raleigh-Durham, NC, as well as a rural shared-expansion zone program, Advo said.
Revenue grew to $350.1 million, increasing $47.7 million, or 15.8 percent, over the prior- year quarter.
Advo said its first-quarter revenue growth was driven by continued strength in advertising piece volumes, which were up 17.5 percent over the prior-year quarter, to 8.3 billion pieces. Total shared advertising packages were up 21.5 percent, driven by growth in the frequency and reach of advertising programs in response to client demand.
Pieces per package were down 3.3 percent while revenue per thousand pieces was up 0.2 percent.
As anticipated, Advo's advertising program expansions in Southern California, Pittsburgh and Raleigh-Durham along with the SEZ program increased the number of advertising packages distributed and reduced pieces per package. Excluding the effect of these expansions, total packages increased 5.6 percent, and pieces per package increased 4.9 percent.
Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters