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Whether the news is good or ill in the direct marketing sector depends on your predilection for a glass-half-full or a glass-half empty perspective.
One source, BtoB magazine, casts the news in an optimistic, light noting that direct marketers saw positive fourth quarter and expect modest growth in the first quarter, based on the Direct Marketing Association’s Quarterly Business Review released Monday.
On the other hand, AdAge is gloomy about the numbers, reporting that the “direct-response industry is bracing itself for the recession backlash.”
Here are the facts from the report: Direct marketers, agencies and suppliers, collectively, posted their 18th consecutive quarter of positive economic growth, despite fourth-quarter results and forecasts that were more modest than past periods. Overall growth in fourth-quarter revenue indexed at 55. A score of 50 represents no change, above 50 means growth and below 50 indicates a decline.
And profitability results also were decent-to-strong, at 65. By segment, marketers had the strongest profitability index at 68, while suppliers and agencies were at 63 and 62, respectively. In early 2007, the industry forecasted a hearty index of 66 for the second quarter of 2007; it then dropped to 65 for the third quarter and 63 for the fourth.
Speaking about the R-word, 47 percent of the marketers surveyed believe a recession is likely. If the recession becomes official, 47 percent stated that they’d maintain budgets at current levels but reallocate the dough - methods such as e-mail marketing, database segmentation and search-engine optimization stand to benefit from the budget shifting.
(For a host of additional findings, including charts, see coverage by MarketingCharts.)
Carla Hendra, co-CEO of Ogilvy North America, said, “It’s almost an all-bets-are-off kind of moment where you have to reinvent yourself. We don’t have a business anymore where we make a marketing plan for the year. We’re making them every day.”
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