DMA: Data-Driven Marketing Adds $156 Billion to the US Economy

October 15, 2013

This article is included in these additional categories:

Analytics, Automated & MarTech | Data-driven | Digital

DMA-Estimated-Value-Data-Driven-Marketing-Economy-Oct2013The Data-Driven Marketing Institute (DDMI), a Direct Marketing Association (DMA) initiative, has released the findings of a study quantifying the economic value of the data-driven marketing economy (DDME – acronym alert!). So here it is: $156 billion and about 676,000 jobs last year. The majority of that value – $110 million – comes from services that are directly or indirectly dependent on data exchanged or rented among firms. In other words, data-driven marketing’s value is very much dependent on the flow and exchange of data through the ecosystem.

Breaking down that $110 million, the study finds that roughly $32 billion is “contingent” upon the exchange of data among firms, with this primarily the realm of data transfer from data owners to 3rd-party data users (“upstream” transfer) who leverage it to identify prospects, customers and audiences.

The other $78 billion is indirectly dependent on servicing individual-level data that gets exchanged among unrelated firms. That includes firms earning revenues from servicing such data, typically by providing either upstream advisory or creative services, or downstream media production and delivery services.

Somewhat unsurprisingly, the DMA’s study – conducted by Professors John Deighton of Harvard Business School and Peter Johnson of Columbia University – takes aim at government regulation, suggesting that policies hindering the exchange of data would not only impact that $110 billion in added value to the US economy, but would also unduly hurt the players that benefit most from that value: small businesses, particularly American ones. That’s because the study authors argue that the biggest beneficiary of the DDME is small business, for which the exchange of data levels the playing field with big players. Moreover, according to the authors, firms involved in the data-driven marketing economy earn up to 15% of their revenues overseas while employing most of their staff in the US.

Whether or not the study assists in moving “from a fear-based to a fact-based conversation,” which the DMA states as its intent, will be seen over time. But clearly by focusing on the small business and “Made in America” aspects of the DDME, the study hits on some political favorites.

The study is the latest in a series of research reports looking to quantify the value of various marketing ecosystems. Recently the Mobile Marketing Association produced a report suggesting that the mobile marketing ecosystem contributed $139 billion in incremental output to the US economy last year. Prior to that, research from the Interactive Advertising Bureau indicated that the ad-supported internet ecosystem contributed 5.1% of US GDP in 2011, or about $742 billion.

About the Data: Full methodological details can be found by accessing the DMA study using the link above.

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