Commentary

Direct Marketing to Account for 53% of US Ad Spend in 2009

According to the Direct Marketing Association Power of Direct Marketing, in 2008 commercial and nonprofit marketers will spend $176.9 billion on direct marketing, accounting for 52.1 percent of all ad expenditures in the United States. These advertising expenditures will generate approximately $2.057 trillion in total incremental US sales. In 2008, direct marketing accounted for approximately 10 percent of total US gross domestic product and 1.6 million direct marketing employees in the US. Their collective sales efforts directly support 9.3 million other jobs, accounting for a total of 10.9 million US jobs.

Direct Marketing Ad Expenditures vs. Total US Ad Expenditures, 2008 (Billions of dollars, Percent share)

 

DM Ad Expenditures

Total Ad Expenditures

DM % of Total

Direct mail (catalog & non-catalog)

$56.5

$61.7

91.5%

Telephone marketing

42.5

86.6

49.1

DR newspaper

13.0

38.8

33.5

DR television

22.8

75.9

30.1

DR magazine

8.9

18.2

49.0

DR radio

4.6

18.7

24.6

New media & other

28.6

39.4

72.5

Total

$176.9

$339.3

52.1%

Source: Direct Marketing Association, 2008

The $176.9 billion in direct marketing advertising expenditures that marketers are predicted to make by the end of 2008 represents a modest three percent increase over 2007. Looking forward to 2009, says the report, total direct marketing advertising expenditures are expected to increase 3.5 percent yielding $183.1 billion. Above average, double-digit spending growth will occur in commercial email and Internet marketing.

Direct marketers should expect a 3.7 percent revenue growth by the end of 2008, reaching $2,058 from an actual $1,985 billion in 2007. Continuing to rise in 2009, sales generated from direct marketing are forecast to grow by 4.5 percent to $2,150 billion. Several broad sectors are expected to realize above-average direct marketing sales growth in 2009 including Financial Services, Information, Transportation, Services, and Wholesale Trade.

Top Ten Industries by DM Ad Expenditures

Industry

2008 (billion $)

2007-2008 % Change (billion $)

Financial, Banks & Credit

$13.3

0.2%

Services, Professional, Technical & Management

10.6

1.1

Retail, Non-store & other Retailers

10.2

2.3

Information, Communications

9.9

6.4

Wholesale Trade

9.7

4.3

Retail Trade, Motor Vehicle Dealers & Service Stations

7.5

-1.9

Manufacturing, Motor Vehicles

7.5

-11.4

Financial, Insurance Carriers & Agents

7.0

5.8

Financial, Security & Comm Brokers, Hldg Cos.

6.9

6.1

Retail Trade, General Mdse Stores

6.7

1.2

Source: Direct Marketing Association, 2008

Peter A. Johnson, PhD, DMA's VP, strategy, analysis, and planning, and lead author of the report, concludes that "... the overall US Gross Domestic Product in 2008 will benefit from the growth generated by direct marketing. In 2008, direct marketing advertising across all economic sectors is expected to add over $1.43 trillion of incremental final demand nation-wide, accounting for almost 10 percent of total US GDP."

Key economic impacts from direct marketing:

  • The total US employment will receive a net boost from total direct marketing driven employment, whose net growth of 0.3 percent in 2008 and 0.2 percent in 2009 will help compensate for job losses elsewhere in the national economy.
  • For 2008, an investment of $1 in direct marketing advertising expenditures is predicted to return, on average, $11.63 in incremental revenue across all industries. This exceeds 2007 and is expected to improve further to $11.74 in 2009.
  • Expenditures in the newer online media will maintain significant growth in the coming year. Commercial email will continue to claim the top growth ranking for 2009, while Internet advertising will claim over 15 percent of all direct marketing advertising dollars in 2009.

For additional information about this study, and to learn of the availability of the report, please visit the DMA here.

 

 

1 comment about "Direct Marketing to Account for 53% of US Ad Spend in 2009".
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  1. Wayne Eaton from Image Direct, December 5, 2008 at 5:29 p.m.

    I would say that the article here is not only correct, but that there is more reason for its accuracy than many are willing to admit. I work for a marketing firm in LA and we do Direct Marketing, but on a Multi-Channel campaign effort and we see significant increased interest in not only our existing clients renewing for full 12 month and longer initiatives, but also the Fortune 1000 expressing tremendous interest in very personalized, critiqued, trigger based Multi-Channel marketing. Direct Mail on it's own won't cut it anymore because Americans are simply sick and tired of the junk mail attributes of advertising. We see a much more effective result doing what we do and now, glad to say...so are the F1000 companies out there. My problem is that we work on category exclusive initiatives so I have to rationalize which companies are best suited and have the budget to move on it. I strongly believe that this 53% estimate will be higher as 2009 brings heavy thought about the wize use of marketing dollars.

    Wayne Eaton
    Image Direct
    Los Angeles, CA
    310-312-4884

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