For the first time in U.S. business history, the size and scope of direct marketing in America -- of direct mail and catalogs, telephone marketing, and direct response print, broadcast, and other media -- has been measured as a result of an econometric study undertaken by the Direct Marketing Association.
According to the research, conducted by the econometric forecasting consulting firm The WEFA Group, in 1995 direct marketing generates an estimated $594.4 billion in consumer sales, and $498.1 billion in business to business sales. In 1995 employment, more than 19.1 million U.S. jobs are related to direct marketing activity -- nearly 10.8 million in consumer direct marketing and nearly 8.3 in business-to-business direct marketing.
Over a three year period from 1992 - 1995, The WEFA Group researched and developed an econometric model specific to direct marketing and integrated that model with WEFA’s other renowned models for U.S. economic activity, and for specific regional models. It verified the research with an extensive industry survey, many interviews with industry experts, and a thorough audit of newspapers, magazines, radio, and television advertisements.
For purposes of this study a media-based definition of direct marketing was applied: any direct communication to a consumer or business recipient that is intended to generate a response in the form of an order (direct order), a request for further information (lead generation), and/or a visit to a store or other place of business for purchase of a specific product(s) or service(s)(traffic generation). The following are definitions of these “intended purposes”:
Direct Order includes all direct response advertising communications -- through any medium --that are specifically designed to solicit and close a sale. All of the information necessary for the prospective buyer to make a decision to purchase and complete the transaction is conveniently provided in the advertisement.
Lead Generation includes all direct response advertising communications -- through any medium --that are designed to generate interest in a product or a service, and provide the prospective buyer with a means to request and receive additional information about the product or service.
Traffic Generation includes all direct response advertising communications conducted -- through any medium -- that are designed to motivate the prospective buyer to visit a store, restaurant, or other business establishment to buy an advertised product or service.
The following charts highlight top-line findings regarding telephone marketing advertising expenditures, sales, and employment.
Telephone Marketing Expenditures by Total & Market
%Growth %Growth 1990- 1995- 1990 1994 1995 1996 2000 1995 2000 Telephone Marketing 40.5 50.6 54.1 58.0 78.9 6.0 7.8 Consumer 14.5 17.3 18.2 19.4 25.2 4.7 6.7 Business-to-Business 26.0 33.3 35.9 38.7 53.7 6.7 8.4
Total Telephone Marketing Expenditures By Intended Purpose
%Growth %Growth 1990- 1995- 1990 1994 1995 1996 2000 1995 2000 Direct Order 13.6 16.5 17.5 18.5 24.1 5.2 6.6 Lead Generation 23.7 30.0 32.3 34.8 48.7 6.4 8.6 Traffic Generation 3.2 4.1 4.4 4.7 6.1 6.6 6.8
Consumer Telephone Marketing Expenditures By Intended Purpose
%Growth %Growth 1990- 1995- 1990 1994 1995 1996 2000 1995 2000 Telephone Marketing 14.5 17.3 18.2 19.4 25.2 4.7 6.7 Direct Order 5.2 6.1 6.5 6.8 8.8 4.6 6.2 Lead Generation 7.5 9.0 9.5 10.1 13.6 4.8 7.4 Traffic Generation 1.8 2.1 2.2 2.4 2.8 4.1 4.9
Business-to-Business Telephone Expenditures By Intended Purpose
%Growth %Growth 1990- 1995- 1990 1994 1995 1996 2000 1995 2000 Telephone Marketing 26.0 33.3 35.9 38.7 53.7 6.7 8.4 Direct Order 8.3 10.3 11.0 11.7 15.4 5.8 7.0 Lead Generation 16.2 21.0 22.8 24.7 35.1 7.1 9.0 Traffic Generation 1.5 1.9 2.1 2.3 3.2 7.0 8.8
1990 Telemarketing Expenditures
Compared to Total U.S. Advertising Expenditures
DM Advertising Total Advertising DM Percent Expenditures Expenditures of Total Telephone Marketing 40.5 60.4 67.1
1995 Telemarketing Media Expenditures Compared to
Total U.S. Advertising Expenditures
DM Advertising Total Advertising DM Percent Expenditures Expenditures of Total Telephone Marketing 54.1 82.7 65.5
Telephone Marketing Sales By Total and Market
(Billions of Dollars)
%Growth %Growth 1990- 1995- 1990 1994 1995 1996 2000 1995 2000 Telephone Marketing 272.8 356.1 385.6 421.4 599.1 7.2 9.2 Consumer 117.2 150.2 159.3 171.0 230.7 6.3 7.7 Business-to-Business 155.6 205.9 226.3 250.4 368.3 7.8 10.2
Total Telephone Marketing Sales by Intended Purpose
(Billions of Dollars)
%Growth %Growth 1990- 1995- 1990 1994 1995 1996 2000 1995 2000 Telephone Marketing 272.8 356.1 385.6 421.4 599.1 7.2 9.2 Direct Order 83.8 106.3 114.3 124.1 171.5 6.4 8.5 Lead Generation 164.3 220.2 239.5 263.0 383.4 7.8 9.9 Traffic Generation 24.7 29.6 31.8 34.3 44.2 5.2 6.8
Consumer Telephone Marketing Sales By Intended Purpose
(Billions of Dollars)
%Growth %Growth 1990- 1995- 1990 1994 1995 1996 2000 1995 2000 Telephone Marketing 117.2 150.2 159.3 171.0 230.7 6.3 7.7 Direct Order 38.9 48.4 51.3 55.0 73.2 5.7 7.4 Lead Generation 62.6 83.4 88.5 95.2 131.7 7.2 8.3 Traffic Generation 15.7 18.3 19.5 20.9 25.8 4.4 5.8
Business-to-Business Telephone Marketing Sales By Intended Purpose
(Billions of Dollars)
%Growth %Growth 1990- 1995- 1990 1994 1995 1996 2000 1995 2000 Telephone Marketing 155.6 205.9 226.3 250.4 368.3 7.8 10.2 Direct Order 44.9 57.8 63.0 69.1 98.3 7.0 9.3 Lead Generation 101.7 136.8 151.0 167.9 251.6 8.2 10.8 Traffic Generation 9.0 11.3 12.3 13.4 18.4 6.4 8.4
Telephone Marketing Employment By Total and Market
(Thousands of Workers)
%Growth %Growth 1990- 1995- 1990 1994 1995 1996 2000 1995 2000 Telephone Marketing 869.7 955.5 984.0 1007.9 1128.4 2.5 2.8 Consumer 309.0 324.0 331.0 337.2 364.2 1.4 1.9 Business-to-Business 560.7 631.5 653.0 670.7 764.2 3.1 3.2
Total Telephone Marketing Employment By Intended Purpose
(Thousands of Workers)
%Growth %Growth 1990- 1995- 1990 1994 1995 1996 2000 1995 2000 Telephone Marketing 869.7 955.5 984.0 1007.9 1128.4 2.5 2.8 Direct Order 292.1 312.3 317.4 321.3 342.2 1.7 1.5 Lead Generation 505.2 566.5 587.4 605.5 698.1 3.1 3.5 Traffic Generation 72.4 76.6 79.1 81.1 88.0 1.8 2.2
Consumer Telephone Marketing Employment By Intended Purpose
(Thousands of Workers)
%Growth %Growth 1990- 1995- 1990 1994 1995 1996 2000 1995 2000 Telephone Marketing 1,306.5 1,550.2 1,601.9 1,664.0 1,903.0 4.2 3.5 Direct Order 375.6 424.1 436.0 450.6 502.6 3.0 2.9 Lead Generation 798.5 992.7 1,028.3 1,071.1 1,248.4 5.2 4.0 Traffic Generation 132.4 133.4 137.6 142.3 152.0 0.8 2.0
Business-to-Business Telephone Marketing Employment By Intended Purpose
(Thousands of Workers)
%Growth %Growth 1990- 1995- 1990 1994 1995 1996 2000 1995 2000 Telephone Marketing 1,378.1 1,625.9 1,713.0 1,813.7 2,211.2 4.4 5.2 Direct Order 389.1 437.0 454.5 475.9 556.0 3.2 4.1 Lead Generation 925.4 1,119.6 1,186.0 1,261.6 1,568.4 5.1 5.7 Traffic Generation 63.5 69.3 72.6 76.1 86.8 2.7 3.6
Ratio of Ad Expenditures to DM Sales by Market
(Share)
1990 1994 1995 1996 2000 Telephone Marketing 0.149 0.142 0.140 0.138 0.132 Consumer 0.124 0.115 0.114 0.113 0.109 Business-to-Business 0.167 0.162 0.159 0.154 0.146
Ratio Ad Expenditures to Sales by "Intended Purpose"
(Share)
1990 1994 1995 1996 2000 Telephone Marketing 0.149 0.142 0.140 0.138 0.132 Direct Order 0.162 0.155 0.153 0.149 0.141 Lead Generation 0.144 0.136 0.135 0.132 0.127 Traffic Generation 0.131 0.137 0.137 0.136 0.137
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