• by Jack Loechner , Staff Writer @mp_research, November 2, 2009

According to the Direct Marketing Association's 2009-2010 "Power of Direct Marketing" report, direct marketing's slice of the total ad spending pie got larger in 2009, increasing from 52.7% of all ad spending to 54.3%. However, since total ad spending dropped to $275 billion from $319 million, the value of DM's slice dropped from $168.1 billion to $149.3 billion. That's an 11.2% drop in spending from $1.95 trillion in 2008 to a forecast $1.74 trillion this year.

Most ad sales channels will see declines in 2009 from 2008's, with the exception of e-mail marketing, search and the young mobile marketing channel. Even the much-buzzed-about social networking medium is expected to see a falloff in expenditures this year.

Both consumer and business-to-business spending will take hits this year, with consumer ad expenditures dropping from $86.7 billion to $76.8 billion, and B-to-B spending dropping from $81.4 billion to $72.5 billion. DM-related headcount will take its lumps in 2009 as well, says the study, with DM advertisers dropping their employee ranks from 1.56 million a year ago to 1.44 million, and DM sellers cutting staff from 8.94 million to 8.44 million.

The third and fourth quarters of 2009 appear to be holding steady, and in 2010 overall DM ad spending is seen as increasing to $15.2 billion, while sales should rise to just under $1.8 billion, according to the report. And most channels should see modest to moderate gains in expenditures next year, with the exception of direct response, newspaper, magazine and radio ads.

Non e-mail Internet advertising will make up more than 15% of all direct marketing expenditures in 2009, and will rise to nearly 17% next year. Consumer ad spending will rise 2.5%, to $78.7 billion, while B-to-B ad purchasing will increase by 2.9%, to 74.6%.

Direct marketer investments are expected to have good returns. A dollar invested this year in a direct marketing ad is expended to return $11.65 in incremental revenue across all industries, including all parties affected by a DM-generated sale - fulfillment houses, shippers, contact center workers as well as the marketers themselves. This is up from $11.61 in 2008.

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