The performance of print direct marketing channels remained mostly unchanged during the first quarter of 2010 while digital channels saw improvement, according to the latest Quarterly Business Review from the Direct Marketing Association and Winterberry Group. Overall, direct and digital marketers reported a good first quarter with increases in revenue, marketing expenditures and profitability when compared with the previous quarter and the same quarter last year. In terms of spending, 42.1% of marketers said their investment in direct/digital marketing remained flat compared to the previous quarter. Of those whose budgets changed, 35.5% said they had increased spending while 20.4% spent less. The good news is that 48.7% of marketers expect to increase total marketing spending in the second quarter. Upon closer inspection, however, the picture painted by the report is markedly rosier for digital channels than print channels. The most significant growth in spending during the first quarter was seen among digital channels such as e-mail, social, search, online display and mobile. Teleservices was the only offline channel for which marketers reported expanded investment. Spending was flat for print direct marketing channels with the exception of catalogs, which declined slightly. Direct marketing-related sales were also up in the first quarter, which 52.6% of marketers reporting an increase in sales compared to the same quarter last year and 41.4% of respondents saying Q1 sales grew in comparison to the fourth quarter of 2009. Economic conditions and reduced marketing budgets were cited by marketers as being the biggest obstacles to better direct/digital marketing performance. The biggest obstacles for direct mail, however, seem to be costs and the need to stay on top of changing postal regulations. The report includes anonymous quotes from several marketers, including these two about direct mail: “Direct mail marketing is being inhibited significantly by postal costs and regulations. The challenge for small marketers—to market by direct mail while keeping within all of the USPS regulations—creates the desire by many to not mail at all.” “Direct mail is an effective means for reaching customers and potential customers; however it is currently nearly impossible to keep up with the technology, costs, and demands for low-budget mailers.” Other findings from the report include: * Marketers report outsourcing 41% of their spending search, 37% on place-based media, 36% on DRTV, 36% on teleservices, 35% on online display ads, 35% of their spending in non-catalog direct mail, 31% on insert media, 30% on direct response print, 29% on catalogs, 29% on e-mail, 28% on mobile and 27% on social. * 54.9% of marketing service suppliers said their profitability increased compared to the same quarter last year and 36.8% posted improved performance compared to the previous quarter. The Quarterly Business Report is based on two online surveys of DMA members to which 152 marketers responded and 149 service providers responded. The Quarterly Business Report is based on two online surveys of DMA members to which 152 marketers responded and 149 service providers responded.