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DMA: Quarterly Review Says Direct Marketers Are Still Feeling the Economic Pinch

Press release from the issuing company

NEW YORK, Nov. 11 -- According to The DMA's Fall 2002 Quarterly Business Review survey of Direct Marketing Association members, direct marketers reported revenue and billings through the third quarter of 2002 were significantly below their beginnings of the year projections. The majority of members (60 percent) reported a significant or somewhat worse third quarter. A sobering 19 percent of direct marketing users reported that their third quarter was "significantly worse" than they had projected. Seventeen percent said their projections were "on target," while 23 percent reported a better than expected quarter. Significantly Worse 19 % Somewhat Worse 41 % On Target 17 % Somewhat Better 18 % Significantly Better 5 % "As we all know, this was a tough quarter not just for direct marketers, but businesses in general," said H. Robert Wientzen. "Members no doubt anticipated a strong rebound from the recession of 2001 and the events September 11. The predicted economy-wide recovery has to date generally failed to materialize, leaving direct marketers now more focused than ever on new customer retention and acquisition strategies." Direct marketers cited the lingering effects of the recent recession, especially as manifested in sagging consumer confidence as the most important issues facing them over the last quarter or into the next. Respondents from the agency segment were especially concerned with client billings and spending. Direct and interactive marketers cited postage rates and postal reform, the threat of war with Iraq, and other issues arising from terrorism as a distant second concern. DMA members reported that in the fourth quarter of 2002 they planned to spend more on e-mail (48 percent), followed by new customer prospecting (40 percent), new product development (35 percent), e-Commerce (32 percent), database segmenting (29 percent), and customer services (21 percent). Direct marketers indicated, among other things, direct mail, teleservices, and customer relationship management will remain stagnant or decline in quarter four. Expenditure projections among direct response advertising agencies and suppliers showed that both groups anticipate the highest growth in spending in the same customer focused areas: new customer acquisition, customer service, and new development plans. Fourth quarter 2002 spending levels for agencies and suppliers will remain unchanged or decrease somewhat for current levels in the operations areas including personnel, mergers and acquisitions, and operating capital budgets. The DMA's Quarterly Business Review provides current direct marketing industry statistics such as changes in sales revenue, customer response rates, marketing expenditures, and staffing levels, among other performance benchmarks. Results in the report come from online surveys conducted by The DMA's Strategic Information Unit. The report generated 700 responses, with the majority received from members in the direct marketing user category at the vice president level or above. The DMA is the leading trade association for businesses interested in interactive and database marketing, with nearly 4,700 member companies from the United States and 53 other nations. Founded in 1917, its members include direct marketers from every business segment as well as the nonprofit and electronic marketing sectors. Included are catalogers, Internet retailers and service providers, financial services providers, book and magazine publishers, book and music clubs, retail stores, industrial manufacturers and a host of other vertical segments, including the service industries that support them. According to a DMA-commissioned study, direct and interactive marketing sales in the United States is projected to surpass $2 trillion in 2002, including $125 billion in catalog sales and $33 billion in sales generated by the Internet. The DMA's Web site is http://www.the-dma.org