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US banks and credit institutions spent $13.4 billion in 2007 on direct marketing advertising – which generated $178.8 billion in sales, and the amount of those returns is forecast to hit $286.2 billion in 2012, according to the Direct Marketing Association (DMA).

Those findings are from a new DMA report, “Direct Marketing Facts and Figures in the Financial Services Industry.”

“DMA found that the Financial, Banks and Credit Institutions sector in 2007 was the number-one American industry spending on direct marketing, and it ranked second in sales,” said Anna Chernis, DMA’s senior research manager and the report’s author.

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“In addition, the Financial, Security and Commodity Brokers, Holding Companies sector was the tenth-largest spender and sixth in direct marketing-driven sales.”

Most financial services industry direct marketers (41.8%) use direct mail (other than catalog)?as their primary channel, whereas the most common secondary channels are websites (57.8% said so) and inbound telephone (50.8%), according to the report.

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Among other key findings of the report:

  • Banks and credit card institutions had the best ROI in this sector in 2007, at $13.37 per dollar spent.
  • Financial services direct marketers mainly use non-catalog direct mail (41.8%) as their primary direct marketing channel.
  • Financial services companies’ advertising expenditures for commercial email is expected to have the largest growth among all media types between 2007 and 2012, with a compound annual growth rate (CAGR) of 22.5%.
  • Internet direct marketing advertising spending in this sector is projected to grow at the second-highest rate, at a CAGR of 17.8%, from 2007 to 2012.
  • Telephone marketing advertising expenditures for the overall financial services sector are expected to reach $7.4 billion in 2008 and $8.4 billion in 2012.
  • Broadcast advertising sales are expected to climb at a CAGR of 4.8% from 2007 to 2012.
  • Insert media sales in the financial services arena will exceed $1.1 billion in 2008, with banks and credit institutions accounting for half of sales.
  • Financial services companies are projecting to spend less on print advertising than they currently do. Banks and credit institutions’ ad spending is expected to decrease 0.5% in 2012 from current levels.

About the study: This DMA research is intended to help financial services marketing professionals benchmark their performance. The eight chapters of the study – Financial Services Overview, Direct Mail, Insert Media, Commercial Email, Internet Marketing, Print Media, Broadcast Media, and Telephone Marketing – illustrate advertising expenditures, direct marketing-driven sales, and direct marketing-driven employment.

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