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Direct Marketing Services Industry Profile Excerpt
| SIC Codes: 7331 NAICS Codes: 541860 Page Length: 10-12 Last Quarterly Update: 11/17/2008 View Sample Industry Profile |
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The direct marketing services industry includes about 3,700 companies with combined annual revenue of over $11 billion. Major companies include Harte-Hanks, infoUSA Services Group, RR Donnelley & Sons, and Acxiom. The industry is relatively fragmented: the 50 largest firms account for 46 percent of industry revenue.
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. The direct marketing services industry is labor-intensive: average annual revenue per employee is less than $150,000.
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 ...
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