The Direct Marketing Association (DMA) today released its Quarterly Business Review (QBR) for the second quarter of 2011.  On this report, DMA partnered with Winterberry Group, a leading strategic management consulting firm that helps advertising and marketing companies build shareholder value.

In Q2 2011, marketers reported moderate growth in spending, sales, profits, and staffing, compared with the previous quarter (Q1 2011) and same quarter last year (Q2 2010).  This good news in performance metrics was tempered by continued uncertainty about general economic conditions.  Even as marketers reported guarded optimism about Q3, they cited general economic conditions as the leading inhibitor of marketing performance.

"Continued uncertainty about the future has encouraged marketers to take a cautious approach," said Yory Wurmser, DMA's director of media & marketing insights.  "The chart below shows that marketers are dedicating roughly 54 percent of their budgets to acquisition, a lower number than reported in previous quarters.  The less emphasis marketers put on acquisition, the less sanguine they are about the marketplace."

"For several quarters now - ever since the recession of 2008-09 gave way to a slow economic recovery - US marketers have been consistent in reporting a sense of optimism about their prospects for robust future growth," said Jonathan Margulies, a vice president at Winterberry Group.  "It's now clear that growth simply hasn't materialized to the extent that was initially anticipated, leading many to stick with the conservative business approaches that served them well during stormy times.  The good news:  That's more likely a symbol of rationality with respect to the present rather than a lack of confidence in what the future may hold."

Key findings include:

• The large majority of marketers (91.6 percent) said investment in direct/digital marketing activity grew or remained steady compared to the previous quarter (Q1 2011).
• Over half of surveyed marketers (52.1 percent) expect to maintain direct/digital budgets at Q2 2011 levels during Q3 2011.  An additional 42.3 percent of marketers plan to increase spending next quarter (Q3 2011), while only 2.8 percent plan to decrease direct/digital spending.
• Over one third of marketers (35.6 percent) indicated that profitability increased compared to last quarter (Q1 2011); 8.5 percent cited a decrease.
• Although a majority of both marketers and suppliers did not change staffing levels from Q1, suppliers were more likely than marketers to have added staff.
• As in previous quarters, the bulk of new investment is going to digital channels (email, search, online display, mobile).
• After a dip in prioritization last quarter, marketers once again cited "General Economic Conditions" as the top challenge in their efforts to drive improved direct/digital marketing performance.