Based on new research, the DMA is optimistic about the performance of direct marketing for the balance of this year. According to the DMA, the majority of marketing agencies believe that client budgets, staff numbers and new business opportunities are set to grow in the second half of 2010. A new Marketing Agencies Association Agency Barometer study found that 87% were feeling optimistic for the future, with a further 87% stating that client budgets are set to stay the same or increase during the rest of the year. Furthermore, 83% said that marketing budget increases will rise by more than 10%, with 75% stating that new business opportunities will appear on the horizon. Digital is expected to continue to be the biggest growth area, with 59% of agencies predicting digital spend to increase in the next quarter. More than 30% think spend will remain the same. However, the private equity firm Veronis Suhler Stevenson (VSS) predicts slow growth ahead for direct marketing, and predicts that spending and revenue will experience slower growth than other communications sectors. The VSS Communications Industry Forecast examined six sectors, grouping direct marketing in its “targeted media” category. While targeted media is projected to become the second-fastest-growing industry of the six analyzed – with a compound annual growth rate (CAGR) of 6.1% from 2009 to 2014 – direct marketing and business-to-business media will grow about half as fast (3.1%), the report said. Otherwise, pure-play consumer Internet and mobile services are expected to bolster the targeted media industry's growth. Revenue generated by marketing services is expected to experience a 3.7% CAGR over the next five years to $227.82 billion, slower than the other industries considered in the report. VSS forecasts that direct marketing will post modest gains because it will be hampered by the Do Not Call list, the expected reduction in Postal Service delivery and increased postal rates. VSS' definition of direct marketing includes direct mail, telesales, catalog, e-mail and DRTV. Overall, VSS projected that communications spending would increase 3.5% in 2010 and have a 6.1% CAGR from 2009 to 2014. What are you seeing for the balance of this year? Howard Fenton is a Senior Consultant at NAPL. Howie advises commercial printers, in-plants, and manufacturers on workflow management, operations, digital services, and customer research.