• by Joe Mandese  @mp_joemandese, May 19, 2006

The rate of direct marketing growth ebbed in the first quarter of 2006 vs. the final quarter of 2005, falling below the industry projections for sustained economic growth, according to estimates released late Thursday by the Direct Marketing Association. The DMA's Quarterly Business Review (QBR) index fell to a 59 for the first quarter down from a near record high of 68 for the fourth quarter of 2005.

The findings, which are based on three online surveys of the DMA's direct marketer, supplier and agency members nonetheless shows continued economic growth, both in terms of revenues and profitability. An index base of 50 represents no growth with anything over it signaling a gain and anything under it a decline.

"Although not as robust as the last quarter of 2005, the first quarter of this year was generally healthy for marketers," said Peter Johnson, vice president, research and market intelligence at the DMA. "With the exception of decreased sales reported by the smallest companies, marketers across all sales tiers reported increased sales."

While revenues for the three sectors - marketers, suppliers and agencies - managed to grow, they failed to meet industry projections, and grew at much softer rates than have been reported over the last two years.

The DMA did not indicate whether this reflects a slowdown in economic expansion or simply a quarterly adjustment, but it said agency growth appears to be outpacing other sectors. Agencies also expressed the strongest optimism for the current quarter, citing increased business volume from their own clients.

The story among direct marketers was markedly different, with total revenues reflecting an negative index of 47, and budgets trending downward from the fourth quarter.

The DMA release did not break out online vs offline growth.