Direct & Digital Marketing Enjoys Revenue Growth

November 29, 2011

This article is included in these additional categories:

B2B | Financial Services | Uncategorized

dma-reported-direct-digital-sales-revenue-q311-nov11.gif2 in 5 marketers say direct and digitally-driven sales revenue is up compared to Q2 2011, while just 13.2% report revenue decreases over the same time period, according to a study released in November 2011 by the Direct Marketing Association (DMA) in partnership with Winterberry Group. Data from the “Quarterly Business Review Q3 2011” also indicates that 46.6% of marketers report an increase in revenue compared to Q3 2010, including 14% who report a significant increase. By contrast, only 18.6% say that revenue has decreased year-over-year.

Sales revenue growth has slowed over the course of 2011, though: the weighted average of revenues acquired between Q2 2011 and Q3 2011 was noticeably lower than the weighted average of revenues between Q1 2011 and Q2 2011 (3.3 vs. 3.6, respectively on a scale of 1 to 5, with 1 representing a significant decrease and 5 representing a significant increase.)

Profitability Also Up

More than 3 in 4 marketers said the profitability of their direct and digital marketing initiatives either grew (35.1%) or remained constant (43%) compared to last quarter, while about 2 in 5 indicated that profitability increased compared to Q3 2010. Tempering these strong results, though, were the roughly one-quarter of respondents who reported a decrease in profitability compared to last year.

These results were largely matched by suppliers: 45.8% of service providers noted improved profitability relative to Q3 2010, compared to 15.9% who reported a decrease. Roughly 2 in 5 noted an increase compared to last quarter, matched by the proportion that experienced no change.

Meanwhile, a plurality of marketers and suppliers appear optimistic about the coming quarter, with 45.6% of marketers and 45.8% of suppliers saying they believe profitability will increase.

Spending Grows Y-O-Y

According to the review, almost half of the marketers surveyed say their investment in direct and digital marketing activity has grown year-over-year, including 20.2% who report a significant increase. Spending growth was more muted quarter-over-quarter, reported by about 1 in 3 marketers, with more than half saying that investment remained constant over that time period.

Respondents appear encouraged about planned levels of spending: while 14.7% expect spending to decrease in Q4, that proportion is matched by those who expect a significant increase, with a further 28.7% forecasting moderate growth.

C-Suite Driving Investment Hikes

Pressure from the “C-suite” to deliver quantifiable performance and performance improvements is the top driver of investment growth, with a 3.2 weighted average on a 1-5 scale, with a score of 1 meaning the category does not drive investment and 5 meaning it drives significant investment. C-suite pressure is slightly ahead of general demand for enhanced digital marketing investment and activity, which fell from a leading weighted average of 3.4 in Q2 2011 to 3.1 this quarter. Other notable drivers of increased investment were a better general understanding of the needs of “multichannel integration” (3.1), better/more focused analytics tools and processes (3.1), and pressure from the “C-suite” to exploit the high-ROI potential of direct and digital channels.

Marketers desire for a better understanding of multichannel integration aligns with results from a survey released in November by Econsultancy in association with Foviance, which found that less than 1 in 5 global companies feel that direct marketing touch points are very integrated into their overall multichannel customer experience, trailing other touch points such as website (32%), telephone support/sales (29%), and retail outlets (26%).

About the Data: The Quarter Business Review’s conclusions are based on results from two online surveys of DMA members, deployed in October 2011 and focused respectively on marketers and the marketing service providers that work with them to develop, launch and optimize campaigns. Altogether, the DMA received 293 usable survey replies, which included 129 marketer respondents and 164 service providers.

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