State of the Industry-1999 (2,293 words)
Reported by Kelly J. Andrews
There's no doubt the direct marketing industry is thriving. Survey after survey shows that both revenues and profits are up, and research companies predict that the future will remain rosy for years to come. However, that bright and happy big picture is made up of lots of small ones—thousands of direct marketers that each have a unique story, strategy and perspective.
To find out what's happening at ground level, we conducted a State of the Industry survey that took a close look at direct marketers across the country.
The direct marketers we surveyed are a cross-section of our readership: publishers, manufacturers, catalogers, retailers, financial services and fundraisers. About a third each targeted businesses (33.2 percent), consumers (29 percent) and a mixture of both (37.8 percent). As a group, they're doing well. More than four out of five (80.3 percent) reported that their revenues had increased (56.2 percent) or remained stable (23.9 percent) in 1998 over the previous year.
Despite the cheerful overall outlook, real concerns exist at the grassroots. In fact, the results were sometimes surprising—the word through the grapevine sometimes varies from the party line spouted by industry spokespeople and the direct marketing companies on the top tier. To gain a little perspective, we spoke to some industry trendsetters and analysts about the results and issues we uncovered. We then took a magnifying glass to two companies that responded to the survey, not because they were exceptional, but because they seemed to exemplify the trends, attitudes and results we uncovered in the State of the Industry report.
Costs Put On Pressure
Despite the healthy revenue growth our respondents cited, profit growth was slightly more sluggish, with fewer than half (44.4 percent) reporting increased profits and 22.7 percent complaining that 1998 profits were actually lower than the year before. Perhaps this slow-down in profit growth explains why half of all respondents cited postal costs as their number-one concern, with another 37.3 percent citing other cost pressures.