DMA Quarterly Business Review Shows Marketers Cautiously Optimistic

NEW YORK—August 25, 2011—The Direct Marketing Association (DMA) has released its Quarterly Business Review (QBR) for the second quarter of 2011. DMA partnered with Winterberry Group on the report, a leading strategic management consulting firm that helps advertising and marketing companies build shareholder value.

In second quarter of 2011, marketers reported moderate growth in spending, sales, profits and staffing, compared with the previous quarter (Q1 2011) and same quarter last year (Q2 2010). This good news in performance metrics was tempered by continued uncertainty about general economic conditions. Even as marketers reported guarded optimism about the third quarter, they cited general economic conditions as the leading inhibitor of marketing performance.

“Continued uncertainty about the future has encouraged marketers to take a cautious approach,” said Yory Wurmser, DMA’s director of media and marketing insights. “The chart below shows that marketers are dedicating roughly 54 percent of their budgets to acquisition, a lower number than reported in previous quarters. The less emphasis marketers put on acquisition, the less sanguine they are about the marketplace.”

“For several quarters now—ever since the recession of 2008-09 gave way to a slow economic recover—U.S. marketers have been consistent in reporting a sense of optimism about their prospects for robust future growth,” said Jonathan Margulies, a vice president at Winterberry Group. “It's now clear that growth simply hasn't materialized to the extent that was initially anticipated, leading many to stick with the conservative business approaches that served them well during stormy times. The good news: That’s more likely a symbol of rationality with respect to the present rather than a lack of confidence in what the future may hold.”

Key findings include:

• The large majority of marketers (91.6 percent) said investment in direct/digital marketing activity grew or remained steady compared to the previous quarter (Q1 2011).
• Over half of surveyed marketers (52.1 percent) expect to maintain direct/digital budgets at Q2 2011 levels during Q3 2011. An additional 42.3 percent of marketers plan to increase spending next quarter (Q3 2011), while only 2.8 percent plan to decrease direct/digital spending.
• Over one third of marketers (35.6 percent) indicated that profitability increased compared to last quarter (Q1 2011); 8.5 percent cited a decrease.
• Although a majority of both marketers and suppliers did not change staffing levels from Q1, suppliers were more likely than marketers to have added staff.
• As in previous quarters, the bulk of new investment is going to digital channels (e-mail, search, online display, mobile).
• After a dip in prioritization last quarter, marketers once again cited “General Economic Conditions” as the top challenge in their efforts to drive improved direct/digital marketing performance.

About DMA’s Quarterly Business Review
DMA’s Quarterly Business Review (QBR) for the second quarter of 2011 is based on an online survey conducted by DMA’s Research and Market Intelligence department in July 2011. Altogether, DMA received 251 usable survey responses. The report is free for DMA members.

About Winterberry Group
Winterberry Group is a unique, global strategic consulting firm that helps advertising and marketing companies grow shareholder value. Based in New York, it offers a combination of corporate strategy, market intelligence and merger and acquisition due diligence support services aimed at helping clients identify opportunities for growth and achieve transformative results. The firm’s global stable of clients includes service providers, marketers and financial investors representing every segment of the advertising and marketing industries.

About Direct Marketing Association (DMA)
The Direct Marketing Association is the leading global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques. DMA advocates standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the end-to-end direct marketing process. Founded in 1917, DMA today represents companies from dozens of vertical industries in the US and 48 other nations, including nearly half of the Fortune 100 companies, as well as nonprofit organizations.

Source: DMA.