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DMA: 2013 Holds Growth for Data-Driven Marketing Media

22 May, 2013 By: Doug McPherson

NEW YORK – The Direct Marketing Association’s (DMA) quarterly business review for first-quarter 2013 shows improvements across several key performance indicators – including spending on data-driven marketing (DDM) media, revenue generated by those efforts, company profitability, and staffing investments.

The report suggests 2013 may bring a renewed focus on growth for both marketers and the industry of suppliers who support their efforts. Although DDM began the year with a more bearish outlook than in the previous quarter, most survey respondents (70.8 percent) agreed that the practice of DDM is well positioned for future growth. 

The respondents said their organizations are spending more on DDM activities and expect growth to continue for the near term. General interest in DDM solutions is also up, fueled by the growing availability of marketing data and technology, which marketers are eager to leverage in an effort to understand and engage consumers in meaningful ways.

Linda Woolley, DMA’s president and CEO, says that with more data and technology, marketers today are recognizing “the incredible potential” that data-driven marketing brings to their businesses. “This is further evidenced in the accelerated data-driven spending growth we see this quarter – and by the increased growth rate in staffing – the first we’ve seen since Q4 2010,” Woolley says. 

Jonathan Margulies, managing director at Winterberry Group, the consulting firm that worked with DMA on the report, says 2013 initially showed a “reasonable dose of the uncertainty and economic malaise” that hurt growth during the end of 2012.

“Fortunately, it appears that much of that sentiment was grounded in individual threats – such as the fiscal cliff and sequestration battles – that are not likely to continue imparting the same impact,” Margulies says. “Marketers and service providers should take heart that virtually all other first-quarter performance indicators point to strong growth prospects ahead for the DDM community.”

Findings include:

  • It appears data is growing more influential, indexing at 3.31, up from 3.1 at the end of 2012; availability of technology indexed at 3.26 in Q1, up less dramatically from 3.15 last quarter.
  • Several respondents said their organization’s Q1 DDM spending was either equal to (41.9 percent) or greater than (38.7 percent) their spending in Q4 of 2012. On an index basis, it also appears that the rate of spending growth is accelerating; the pace of Q1 DDM spending growth surpassed that of the previous two quarters (3.19 in Q1 2013 versus 3.10 in Q4 and 3.16 in Q3) and is consistent with the rate of spending growth seen in first-quarter 2012 (3.20).
  • The DDM community’s staffing growth rate is accelerating for the first time since Q4 of 2010, indexing at 3.16 in Q1, up from 3.01 last quarter.

Almost half of DDM practitioners surveyed reported their DDM-related revenue increased in Q1 (45.9 percent) while 39.4 percent indicated revenue remained flat to the previous quarter. Looking to next quarter, DDM practitioners expect their related revenue to increase further – 52.9 percent say revenue should grow in Q2, while 36.5 percent predict revenue will remain steady.

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