Direct Marketing Expects Revenue and Profits Up

by Jack Loechner, Sep 12, 2006, 3:00 AM

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Direct Marketing Expects Revenue and Profits Up

The Direct Marketing Association's Quarterly Business Review reported a 12th consecutive quarter of positive growth over Q2 2005 across its membership in the direct marketing industry. The compiled composite of actual revenue and profitability of three online surveys of direct-marketing companies, agencies and suppliers is indexed, with a score of 50 representing no change in performance and a score over 50 representing growth.

The report shows that Industry members reported an overall index of 66 for growth in revenue over the same quarter last year (SQLY). The combined index of 47 for revenue vs. original projection indicates a slight decline from early sales expectations for the quarter, which the DMA termed "somewhat disappointing" but a marginal improvement over Q1 2006's score of 46.

Respondents are optimistic about projected revenue for the third quarter, producing a combined index of 67, the DMA release noted. Agencies are somewhat more likely than marketers and suppliers to forecast greater growth in Q3 2006.

By industry category:

Marketers' index for revenue vs. SQLY rose to 66 from 57 in Q1

• Quarterly profitability increased to an index of 72 from 66
• Revenue compared to original projections was flat with Q1 2006
• Revenue projections for the current third quarter produced a 65 index.

DM agencies' reports of revenue vs. SQLY showed growth at 69, up from Q1

• Profits were at 70, a slight gain over the direct quarter
• Revenue compared to original projections earned a 52 index
• Agencies expect better growth in Q3, producing a 70 index, up 4 points from Q1

DM supplier revenue growth gave Q2 revenue vs. SQLY a six-point boost to 64, from 58 in Q1

• Profitability for the segment rose 1 point to 71
• Revenue still underperformed compared to original projections, leading to a 44 index for the segmentslightly better than the Q1 index of 42.

The B-to-B segment showed particularly strong revenue growth, posting 70 for revenue vs. SQLY, a gain of 9 index points over Q1 2006.

Catalogers also reported raised indices for revenue vs. SQLY of 65, up from 59 in Q1, and profitability index at 74.

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