DMA Quarterly Business Review Q1 2012: Digital and Direct Marketing Continues to Grow at a Modest Pace

New York, NY, May 24, 2012 - The Direct Marketing Association (DMA) today released its Quarterly Business Review (QBR) for the first quarter of 2012. DMA partnered with management consulting firm Winterberry Group on the report, completely updating the questionnaire for this edition. 

2012 began with the same slow growth patterns that defined 2011. Marketers reported modest improvements in revenue, campaign profitability and staffing levels between Q1 2012 and Q4 2011, although the rate of growth was slower than the full-year 2011 numbers. On a more positive note, marketers seem more optimistic with projections for the coming quarter. Sixty percent expect revenues driven by digital and direct marketing (DDM) to increase in Q2, compared with just 43 percent that reported increased revenues in Q1. 

"One of the most interesting findings this quarter is that the DDM community is worrying less about the economy," said Yory Wurmser, DMA's director, marketing & media insights. "Although growth could be stronger, respondents indicate that the economy is gently driving, rather than inhibiting, DDM activity."

"This quarter's results validate what many marketers and service providers have been confronting for several months now: When it comes to economic activity, we're in the midst of a 'two-steps-forward, one-step-back' business cycle," said Jonathan Margulies, a managing director at Winterberry Group. "Bottom-line results—showing greater investment, higher sales revenue, and improved return-on-investment—continue to steadily improve though, and those concerned about what the future may hold should find some confidence in seeing this consistent growth across quarters."

Key Findings:

• In Q1, marketers allocated 61.7 percent of their overall DDM budgets to customer acquisition objectives—the highest proportion of such spending in over two years.  Investment in customer acquisition is a common sign that marketers are bullish on growth opportunities in their core markets and are willing to invest to propel that expansion
• A plurality of survey respondents indicated that their organizations' Q1 DDM spending either remained unchanged or grew compared to last quarter (38 percent and 39.9 percent, respectively). 
• On an indexed basis, Q1 DDM spending growth lagged behind that of last year's first quarter (3.2 versus 3.3), but remained consistent with growth seen in the first quarter of 2010. 
• Most respondents indicated that their company's revenue either remained flat (37.3 percent) or increased (43.4 percent) in Q1 2012 compared to Q4 2011
• Although only 37 percent of respondents report that profitability increased in Q1 2012, almost half expect that profitability will increase next quarter as compared to Q1 2012 (45.4 percent). 
• Staffing growth rates have remained consistent for the previous six quarters (indexing at 3.2 since Q4 2010).
• Investment increased or was flat in all measured channels, with the strongest growth in social media, mobile and email.

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