VSS part 2

Professional & Business Information Services (PBIS)

Due to the efforts of professional and business information services providers to meet the demands of users for real-time information across multiple platforms, spending on PBIS is expected to increase 8.2 percent in 2006 to $135.35 billion. Spending is projected to grow at a CAGR of 7.8 percent from 2005-2010, reaching $181.90 billion by 2010. Spending on Business Information Services (BIS) is projected to increase at a CAGR of 7.7 percent during the 2005-2010 period, reaching $128.84 billion. Professional Information (PI) spending is expected to rise at a CAGR of 8.0 percent from 2005-2010 to $53.06 billion. Reliance on quality professional and business- related content fueled an 8.0 percent increase in spending on PBIS to $125.14 billion in 2005. Both segments contributed to the gain, with BIS up 8.5 percent to $89.025 billion and PI up 6.6 percent.

Marketing Services by Segment

Direct Marketing

Spending on direct marketing is expected to increase 6.6 percent to $154.47 billion in 2006 and grow at a CAGR of 6.0 percent in the 2005-2010 period. Direct marketing spending increased 7.1 percent to $144.95 billion in 2005 due in part to the growing use of database technology, which allows marketers to target specific zip codes and neighborhoods. Despite the implementation of the federal Do Not Call Registry — which fines companies that make telephone sales calls to consumers who have voluntarily placed their names on the list — telemarketing is the largest segment of the direct marketing industry and continues to achieve steady growth. Growth continued to accelerate in 2005, with spending up 5.9 percent to $60.23 billion. Direct marketing expenditures are expected to grow steadily in the mid single digits during the forecast period. By 2010 Direct Marketing spending is forecast to reach $194 billion.

Branded Entertainment

Spending on branded entertainment, including event marketing, event sponsorships and product placement, among others, is expected to increase 15.3 percent to $51.35 billion in 2006, driven by double-digit growth in all three categories. The market will experience a CAGR of 13.7 percent from 2005 to 2010, reaching $84.60 billion. Spending on branded entertainment increased 16.0 percent to $48.67 billion in 2005. Spending on event marketing, the largest segment of branded entertainment, increased 17.6 percent to $27.94 billion in 2005, as marketers sought to create excitement about their products and brands through live events. The integration of products into program content has become more popular, propelling the value of product placement, including paid and non-paid placements, upwards at a rate of 29.5 percent in 2005 to $4.48 billion. Paid placements soared 48.7 percent to $1.50 billion in 2005. Branded entertainment grew at a CAGR of 12.2 percent from 2000 to 2005.

Custom Publishing

Spending on custom publishing increased 29.1 percent to $28.41 billion in 2005, driven by double-digit growth in spending on magazines, newsletters and tabloids. Spending on custom publishing is expanding dramatically because of the medium’s ability to connect a company with its target audience on a regular basis, maintaining the company’s visibility. Custom publishing rose at a CAGR of 17.0 percent from 2000 to 2005. Driven by new publications in a variety of formats, spending on custom publishing is expected to increase 22.1 percent to $34.69 billion in 2006 and grow at a CAGR of 15.4 percent during the forecast period. Spending will reach $58.22 billion by 2010.

Other Marketing Services

Business-to-Business Promotions

Spending on business-to-business promotion increased 3.3 percent to $43.04 billion in 2005 due to gains in both promotional products and employee incentives. Corporations spent $25.03 billion on employee incentives in 2005, an increase of 2.8 percent. Spending on promotional products increased 4.1 percent to $18.01 billion in 2005, surpassing the market’s record spending level in 2000. Business-to-business promotions rose at a CAGR of 1.4 percent from 2000 to 2005. Spending on business-to-business promotion is expected to increase 3.7 percent to $44.62 billion in 2006. Growth will remain steady during the forecast period, as rising corporate profits fuel investment in rewards for employees and clients.

Consumer Promotion

Spending on consumer promotion is expected to increase 4.0 percent in 2006 to $44.47 billion, driven by gains in all seven categories. Overall, the CAGR for consumer promotion spending will be 4.1 percent in the forecast period, outpacing the 1.5 percent gain experienced in the previous five-year period. Spending will reach $52.22 billion in 2010. Consumer promotion includes point- of-purchase (POP) displays, premiums, promotional licensing, product sampling, coupons, loyalty programs and games. Spending on consumer promotion increased 3.0 percent to $42.75 billion in 2005, driven primarily by POP and product sampling.

Public Relations

Public relations has been gaining momentum in recent years as marketers increasingly turn to the industry to assist them in communicating messages to customers in the fragmented media environment. Spending on public relations accelerated in 2005, increasing 12.5 percent to $3.35 billion. Growth in public relations spending is projected to accelerate in 2006, increasing 13.9 percent to $3.82 billion, as public relations continues to gain prominence in the media mix.

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