Direct marketers are beginning to invest again after weathering the recession by cutting costs, according to figures from the Direct Marketing Association. Digital media investment is leading the way, according to the organization.
The DMA’s latest quarterly business review shows direct marketers and their suppliers reported improvement across all their performance markers during the second quarter, a sign that the economic rebound is picking up strength and marketers are more confident in their spending.
The group asked marketers to rate on a five-point scale how their spending had changed during the quarter, with a five representing a significant increase. The average for the second quarter was 3.3, showing strong growth over the previous quarter and the second quarter of last year, said Yoram Wurmser, acting head of research for the DMA.
Wurmser noted that more than 40% of respondents said they will increase spending in the third quarter. However, Wurmser also noted that the poll of 532 marketers and suppliers was taken during the month of July, and August economic indicators were disappointing. Yet the overall trend appears to be improving, he said.
Fifty-three percent of marketers and 53.6% of suppliers said their profitability improved in the second quarter of 2010 over the first quarter of the year and over the second quarter of last year. Among marketers, 51.2% say they expect their profitability to increase in the third quarter over the second, as do 50.3% of suppliers.
Digital marketing channels are taking in the largest share of the increased marketing spending, according to the review. When asked to rate how their spending plans had changed in the second quarter on the one-to-five-point scale, digital media held the top five spots. E-mail was first with a 3.8 on the scale, followed by social media (3.7), search (3.6), mobile (3.4) and online display ads (3.3). The marketers said improved data analytics are driving the increases, according to the study.