One-Third of Health Services Advertising Spend Is for DM Campaigns

February 6, 2008

This article is included in these additional categories:

B2B | Email | Pharma & Healthcare | Promotions, Coupons & Co-op

Health services companies spent $2.4 billion on direct marketing advertising in 2007, resulting in $28.7 billion in sales – or an ROI of $11.86 for each dollar spent – according to a new report by the Direct Marketing Association (DMA).

The largest portion of spending and sales revenue go to offline channels, especially telephone marketing and direct mail, said Anna Chernis, DMA senior research manager.

However, “the online channels – internet marketing and commercial email – will grow considerably during the next five years, with double-digit increases predicted for each year through 2012, both as promotional tools and as sources of sales,” she said.

The first-ever “Direct Marketing Facts and Figures in the Health Services Industry” report “found priceless facts specific to this vital American industry,” Chernis said.

“For example, it found that 90% of direct marketing advertising investment is aimed at consumers and returns the same proportion of sales, but the business-to-business market has an even higher ROI.”

Among other key findings from the DMA report :

  • By 2012, health services companies will spend $3.9 billion on direct marketing advertising and receive $45.8 billion, yielding a slightly reduced ROI of $11.74 (compared with $11.86 in 2007).
  • Health services companies allocate one-third of their advertising budget to direct marketing campaigns. Most of this budget is geared toward telephone marketing.
  • By 2012, these companies will expend most of their advertising dollars on the internet. Commercial email, for instance, is projected to grow by almost 25% each year from 2007 to 2012.
  • Direct marketers in the health services industry overwhelming employ direct mail campaigns (89%). About 70% are multichannel campaigns.
  • The primary purpose for health services websites is to provide information about company products and services.
  • Direct mail response rates to existing customers averaged 3% during the past three years.
  • Lead-generation campaigns accounted for nearly 72% of direct marketing-driven sales in 2007.
  • Most direct marketing-driven sales are divided among three channels: telephone (32.7%), internet (24.8%), and direct mail (23.9%).

About the study: “Direct Marketing Facts and Figures in the Health Services Industry” is a 57-page overview of the health services industry from three perspectives: survey results from health services companies regarding marketing practices and response rates on marketing campaigns; economic data from DMA’s “The Power of Direct Marketing: 2007-2008 Edition” regarding advertising expenditures, sales, ROI, and employment; and a campaign case study from DMA’s 2007 International ECHO Awards.

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