Budco Marketing and Fulfillment Industry Outlook

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       The Budco Perspective:
       marketing and fulfillment industry outlook




AI2 BUSINESS INTELLIGENCE CONTAC T CENTER PRINTING AND PRODUC TION MAILING SERVICES
TA R G E T CO N N E C T D I R E C T M A R K E T I N G I N F O R M AT I O N T E C H N O LO G I E S WA R E H O U S I N G
AND INVENTORY MANAGEMENT OPTI-COMM ESTORE 8.3 FULFILLMENT LETTERSHOP
A N D F I N I S H I N G C R E AT I V E S E R V I C E S C D D U P L I C AT I O N O P T I - P O S T P LU S F I N A N C I A L
S E R V I C E S T arget C O N N E C T D I G I T A L P R I N T T A R G E T C O N N E C T A I 2 B U S I N E S S I N T E L L I G E N C E
CONTAC T        CENTER        FULFILLMENT            PRINTING          AND      PRODUCTION            MAILING          SERVICES
D I R E C T M A R K E T I N G I N F O R M AT I O N T E C H N O LO G I E S WA R E H O U S I N G A N D I N V E N TO R Y
M A N A G E M E N T O P T I - C O M M P E R F O R M A N C E M E A S U R E M E N T A N D I M P R O V E M E N T D irect M arketing
ESTORE        8.3     LETTERSHOP           AND      FINISHING          C R E AT I V E    SERVICES         CD    D U P L I C AT I O N
OPTI-POST PLUS FINANCIAL SERVICES BRAND CONNEC T DIGITAL PRINT LET TERSHOP
AND      FINISHING          PERFORMANCE              MEASUREMENT              AND       IMPROVEMENT             FULFILLMENT
C R E AT I V E S E R V I C E S A I 2 B U S I N E S S I N T E L L I G E N C E CO N TAC T C E N T E R P R I N T I N G A N D
P R O D U C T I O N M A I L I N G S E R V I C E S TA R G E T CO N N E C T D I R E C T M A R K E T I N G I N F O R M AT I O N
The Budco Marketing and Fulfillment Industry Outlook
The year 2010 proved to be one of slow economic recovery, with increased consumer spending, the
U.S. GDP expanding approximately 3.0%, and a corporate focus slowly shifting from cost control to
revenue growth.

Initial projections for continued growth in 2011 were positive. Although these projections have not been
abandoned, the first quarter economy has been described as "sluggish."

However, the marketing and fulfillment industry continues to
evolve with many exciting, innovative solutions available to help
strengthen and grow businesses in almost every industry.

This document represents Budco's perspective on the marketing
and fulfillment industry and is supported by data from various
sources, including previously published reports from the
Winterberry Group, Nielsen and Goldman Sachs, as well as
perspectives from our business partners, colleagues and clients.

This report includes Budco's view on:

        The state of the industry
        Important trends and influencers
        Growth strategies to consider
        A review of key marketing and fulfillment tools and technologies


Please feel free to contact us with questions or to further discuss any of the ideas or information
contained in this report.

        marketing@budco.com               www.budco.com             1-888-BUDCO-40


To access past Budco reports and white papers on fulfillment, direct marketing, printing and other
topics, following this link:

                               http://budco.com/jsp/news/whitePaper.jsp




                                                       1
State of the Industry
Today's Economy
With the second quarter of 2011 upon us, the economy continues to show mixed results with most
experts describing it as "sluggish." Unanticipated global events, such as the natural disaster in Japan
and further conflict in the Middle East, as well as the increasing price of fuel and a slight rise in inflation,
can be viewed as reasons for concern. At the same time, the national unemployment rate has dropped
below 9%, personal consumption expenditures have grown and the GDP is still forecasted to grow.

It is anticipated that corporate focus should continue to shift from tight cost control to revenue
growth and new customer acquisition. This should drive an increase in marketing budgets leading to
more spending on advertising and marketing initiatives.


Marketing and Advertising Spending

Projections for marketing and advertising spending also call for potential mixed results. Overall
spending on traditional "above the line" advertising channels is expected to decline this year versus
2010. Traditional print media, like magazines and newspaper, will continue to slide. Despite the
projection of an overall decrease in ATL spending, slight growth could be seen in select media, such as
outdoor and cinema.




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Conversely, direct and digital or online channels are projected to grow by as much as 6.0%, accounting
for spending of nearly $164 billion for the year.

Lower implementation and management cost and an improving ability to measure results and customer
engagement will continue to drive expansion of digital channels like eMail, online display, social media,
search optimization and others.




Interestingly, the direct mail channel, pronounced dead by many an industry critic, not only showed
year over year growth in 2010 of approximately 3.0%, it is projected to grow by almost double that
amount in 2011. The observation that "direct mail is not dead" can in part be attributed to the fact that,
according to the U.S. Postal Service, 98% of the U.S. population interacts with mail on a daily basis
either at work or at home. It's simply ingrained in our culture, and, as a marketing vehicle, it works.
Direct Mail continues to be proven effective at reaching targeted audiences with meaningful content
and delivering measurable results.




                                                       3
Industry Trends and Influencers
Social Media

Social media and online networks continue to grow in popularity and shape the way we interact both
personally and professionally. The impact on marketing and fulfillment is undeniable, although
measureable results from targeted marketing and selling efforts using social media need to continue to
prove themselves, especially related to business-to-business initiatives. However, according to a report
from the Winterberry Group, 79% of corporations have undertaken social media in an effort to connect
with customers, prospects and employees.




    600 million users
                                                           190 million users




                     100 million users                                         2 Billion views per day


The advent of social media as a marketing tool highlights an interesting dynamic between traditional
offline and emerging online communication channels.

While online content consumption erodes the use of traditional offline channels like print, mail and
fulfillment, it also generates requests for literature, products, samples and coupons that often result in
utilizing traditional offline channels to get materials and information into the hands of those requestors.
Additionally, data collected via online sources is used to generate targeted marketing and fulfillment
campaigns, often delivered through offline channels.

This dynamic indicates a need for marketers to continue to find the right mix of channels, properly
aligned with the right target audience, to ensure maximum reach and effectiveness in marketing
performance.




                                                       4
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