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The size and economic impact of direct marketing in the United States had been debatable for decades until the Direct Marketing Association (DMA) commissioned a study in 1992 to analyze the extent of direct marketing in the United States and to develop an economic model for forecasting purposes. The WEFA Group—a collaboration of Chase Econometrics and Wharton Economic Forecasting—was selected to conduct the study.
Three solid years of research were devoted to this landmark comprehensive study. And so it was that the DMA was able to announce in October 1995 that U.S. sales revenue attributed to direct marketing for that year was estimated to be $1.1 trillion.
Consumer direct marketing sales were forecasted to reach $594.4 billion in 1995. They increased by 6.1 percent per year from 1990 to 1995 and are expected to grow by 6.5 percent per year from 1995 to 2000—to $541.2 billion. This compares with overall U.S. consumer sales growth of 5.3 percent per year and 5.5 percent per year for those five-year intervals, respectively. Direct marketing is an interactive system of marketing that uses one or more advertising media to effect a measurable response and/or transaction at any location, with this activity stored on database.
Some people argue that, with continuing growth and development in the field, a standard definition is no longer valid. There are those who would dropthe term direct marketing in favor of such terms as directed marketing, or relationship marketing, or action advertising, or integrated marketing. Where the debate will end, no one knows.
Total advertising for 1993 was $232.080 billion. It is estimated that $149.970 billion, or 65 percent, was direct advertising. The flow chart reports direct components of overall media advertising expenditures. A growing percentage of broadcast, newspaper, and magazine advertising dollars can be categorized as direct advertising. The percentage is growing rapidly as marketers learn the efficiency of measuring advertising performance.
Traditionally, direct marketers have identified three key components to pro-during response, regardless of media used. The three components and ranking of importance has been as follows: list (40 percent), offer (40 percent), creative execution (20 percent).
Today, lists that contain only names of individuals, or names of business firms, are being supplanted by enhanced databases that help to profile prospects and customers, thus making it possible to target specific market segments. It has been said, with wisdom, that even brilliant creative execution cannot overcome an offer without strong appeal to the market approached.
The offer, sometimes referred to as the proposition, remains key to success.
