Direct Marketing List Research — Just How Big are List Sales?
Q: I am doing some research for a large financial institution and am trying to determine the size of the consumer list market in the US (in terms of dollar volume, or number of list brokers, or any other sizing approach). Any help you can provide is appreciated.
PS: You have a great website and service offering
A: Hey — thank you for the wonderful compliment. It is much appreciated! : )
And, you are right — this is quite the daunting task. Here’s some information that we found to help you with your research project. We hope that this will fill in some of the holes and provide a more complete picture of the list industry and it’s size.
To start at the macro level, within the direct marketing industry there are over 14,000 individual contacts, and approximately 9,000 direct marketers, service firms and suppliers. These folks break down into the following categories:
- 19 categories of direct marketers
- 15 categories of service firms and suppliers
- 5 categories of creative services
When looking specifically at the mailing list business, there are 2,333 list companies as identified by InfoUSA. And, our research found that there are more than 60,000 mailing lists available in the direct marketing marketplace.
Now, according to the USPS’ Annual Report, they mailed 103.5 billion pieces of standard mail — which consists primarily of direct mail. The USPS reports that they made $20.8 billion for this standard mail in postage! Wow!
So, here is where we pull out our calculators and make some assumptions — so please take these as just that. Based on findings from the Direct Marketing Association, this mailing volume (as reported by the USPS above) normally equates to about half prospect mailings and half customer mailings. Therefore, we project this to mean approximately 50 billion prospect mailings (approximately half of the 103 billion pieces mailed). You could then argue that at $50 per thousand (on average) mailing list costs, this would equate to approximately $2.5 billion in list sales revenues. Again, this is an estimation on what we know to be true combined with industry averages. However, it is as close as we can estimate based upon the available information out there.
Here is some additional data to consider. This comes from the Direct Marketing Association’s 2007 Direct Marketing Report (available for sale in their bookstore):
- $173.2 billion were projected to be spent on direct marketing in 2007 (this projection was made in October — so it’s probably very accurate)
- This equates to a 4.4 percent increase over the $166 billion actually spent in 2006.
- The slowing economy has been taken into consideration in these numbers and adjusted for accordingly.
- The growth rate in direct marketing expenditure for 2008 is expected to bounce back to 5.7 percent, or $183.1 billion in direct marketing advertising expenditures. Above-average spending growth is expected in commercial e-mail, Internet marketing, DRTV, and direct mail (including catalog).
We hope that this gives you some additional food for thought for your research! Best of luck! And, if any of our readers has more food for thought or hard numbers on this question, please add your comments. Thanks!