Direct Marketing Services Industry Profile

The US direct marketing services industry includes about 3,500 companies with combined annual revenue of about $10 billion. Major companies include Harte-Hanks, infoUSA Services Group, and Acxiom. The industry is fragmented: the 50 largest firms account for about 45 percent of revenue.

Companies in the industry develop advertising materials for direct distribution to consumers by mail or online.

COMPETITIVE LANDSCAPE

Demand is driven by economic activity and corporate profits. The profitability of individual companies depends on their targeting services, creative skills, and marketing ability. Large companies have advantages in economies of scale in database analytics, marketing, and automated operations, which allow them to compete more aggressively on price. Small companies can compete effectively by specializing in a particular industry, geographic market, or service type.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major services are letter shop services (preparing and sorting mail pieces); printing; mailing list services; concept development; and full direct mail services, which include all of the above. Full direct mail services accounts for almost two-thirds of industry revenue. Companies providing only letter shop services account for about 15 percent of industry revenue, and companies providing only print services account for about 8 percent. Other offerings include fulfillment, sales promotion, and distribution services.

Historically, direct marketing referred to direct mail and telemarketing. Direct marketing can use any medium to reach specific customers, including mail, TV, print, email, banner ads, and billboards. The direct marketing industry is changing as organizations allocate ...