Posts filed under ‘Direct Marketing Industry Research’
Your Question: Do you know what is the amount of Direct Marketing spend (in the US) on back to school activities?
Our Answer: Wow. This was a tough one to answer, and, in fact, although I searched with a vengeance, and referenced many research materials, I could not find the definitive answer…
I did, however find several related articles that may shed some insight on back-to-school marketing activities.
The first two articles talk about how much students are anticipated to spend going back to school (hint–it’s a lot: $47 billion for college students and $18 billion for other families!).
College Link: College Back-to-School Spending to Surpass $47 Billion
Family link: Back-to-School Spending to Top $18 Billion
For information on marketing strategies and tactics that retailers will be using in their back-to-school campaigns, check out this article, from USA Today.
Social Media is Key Component of Back-to-School Marketing Supply List
JupiterResearch Finds That Social Media Has Emerged as Important Marketing Platform for Retailers During Back-to-School Shopping Season
I do apologize for not being able to answer your specific question (this was actually the first time I’ve been stumped!), but hope that you’ll find my links to be helpful. I also urge any readers with further info on this topic to pipe in and comment with your insight.
Your question: What are the top direct marketing beauty brands?
My answer: Great question, and a pretty tough one, too. I’ve tackled your question by quantifying the overall marketplace. I’ve also found some data on media spend by cosmetics and other personal care brands in several direct marketing channels: Direct response television, catalogs and radio.
The Direct Marketing Association (DMA) estimates that approx. 3.5 million people shop and order cosmetics and toiletries via the phone or by mail, over the course of a year. This equates to about 1.6% of all cosmetics/toiletries purchases. So, it’s a pretty large market. These direct marketers are using a combination of long and short-form infomercials, catalogs and other direct response channels such as direct response TV.
Response Magazine does an excellent job of reporting on media spend, by category and by company. I urge you to check out their research, but I’ve highlighted some key findings here:
- In Q1 2008, Cosmetics, Hair and Personal Care firms spent $73,460,100 in long-form infomercials (30 minutes). Sadly, the research did not report on media spending by individual firm/brand.
- In Q4 2007, Drug and Toiletries firms spent $2,337,600 in direct response television.
- The two leading advertisers in this category were Media Power (marketers of vitamins and other health/beauty products) and NAC Vitamin Company–who made the top 10 list of leading direct response tv advertisers.
- In Q1 2008, Drug and Toiletries firms spend $351,519,700 in short form direct response television.
- The two leading advertisers in this category were: Proactiv Solutions that spent $47,669,300 and Nutrisystem that spent $42,657,800.
- See the following chart that lists the top short form advertisers.
Another excellent resource I found is Infomercial Monitoring Service. This firm keeps track of which companies are advertising on TV–how often, etc. Their services are subscription-based, so for the skinny on what beauty brands are up to in regards to television ads, you might consider purchasing their data. I have access to 2004 data that lists the following Beauty brands in the Top 50 Infomercials (based on frequency of ads aired on national cable networks):
- Youthful Essence
- Sheer Cover
- Principal Secret
In regards to catalogers, note that there are only three “Personal Care Products” firms that made the DMA’s list of the top 100 catalogers, in terms of customer growth (2005 data–sorry–that’s the most current I could find…).
- Yves Rocher
- Healthy Living
- Caswell Massey
I welcome additional comments with more information. While I did my best to provide as much information as I could gather on this topic, I know that there are experts out there who can flesh out the answer in greater detail.
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!