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Growth Trend Continues, DMA Review Finds

The direct marketing industry experienced its sixth consecutive period of growth in the fourth quarter of 2004, according to the Direct Marketing Association's quarterly business review released yesterday.

The review is a benchmark of the industry's financial performance. It identifies trends affecting future performance, including changes in sales revenue, customer response rates, marketing expenditures and staffing levels.

Average sales industry-wide rose 9.4 percent in the fourth quarter compared with a 6.2 percent increase in the third quarter.

The QBR revenue index was 69, which is the highest index number in any quarter since the inception of the quarterly business review in 2002. The projected revenue index for first-quarter 2005 is 66. The QBR Index, which is a score out of 100, compares revenue with the year-ago quarter. A score of 50 means no change while above 50 indicates growth and below 50 signals a decline. Results are based on 209 responses the DMA received to an online survey of member companies in January.

The agency segment's revenue and profitability indexes both registered at 73. The DMA cited the increasing interest in database marketing by companies previously using mass marketing strategies almost exclusively as one trend in this segment.

“While they may not call themselves direct marketers, it is difficult, if not impossible, to find a major company in the United States today that does not use direct marketing strategies in their overall marketing mix,” said Peter Johnson, director of the DMA's strategic information unit.

Other results from the report include:

· Consumer products or services had a very strong fourth quarter with a QBR revenue index of 81 and a profitability index of 74.

· For catalog users, the revenue index was 55 and the profitability index was 71.

· Supplier employment grew by three index points in the fourth quarter.

Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.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

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