Online Sales Among Direct Marketers to Grow

Online revenues among the direct marketing industry will outpace the rest of the Web, growing by 150 percent from 1999 to 2000, according to a collaborative research effort.

The study also found that e-commerce sales among direct marketers are expected to grow to 30 percent of all direct marketers’ orders in the year 2000, up from a base of 12 percent in 1998. The expectations of direct marketers are somewhat more optimistic than those of other Web marketers, the study found. Overall, Internet revenues are expected to double from 1999 to 2000 when compared to a 150 percent increase among direct marketers. The study also found the majority of direct marketers online to be profitable.

The study “The Direct Marketing Industry Online” was conducted by Millard Group, Inc., ActivMedia Research, and the Direct Marketing Association (DMA).

Direct marketers estimate that their Internet initiatives have contributed 15 percent net new customers, two-thirds of which are brand new, first-time buyers to direct marketers.

The study found that most direct marketers are online primarily to sell products, but most suppliers (manufacturers, wholesalers, and business services) are not. Instead, these business-to-business firms focus primarily on communication and relationship building. Business-to-business sites use their sites to stimulate offline contact from customers or generate sales leads.

Only half of all offline publishers intend to generate revenue from their online ventures, the study found. Among those looking to increase revenue, they will look to advertising and sponsorships, which are considered more lucrative than soliciting subscriptions. Respondents to the survey consider paid banner advertising the most effective means of generating advertising revenue.