Direct marketers must work together to head off regulatory restrictions, developing cohesive solutions to advertising ethics and direct mail-delivery issues. That was the message delivered by John Greco, president of the Direct Marketing Association, to some 14,000 attendees and exhibitors at the group's annual conference and exhibition last month in Las Vegas.
Greco warned in particular of increasing government interest in regulating behavioral advertising, which targets consumers based on the collection and analysis of their Internet activity and history. The concern is that such personal consumer information may be concentrated in a few hands and misused.
In response, Greco urged an increased emphasis on self- regulation and marketing ethics to head off legal restrictions. He noted that the DMA is working with other professional organizations, including the Interactive Advertising Bureau and the American Association of Advertising Agencies, to develop self-regulatory guidelines.
“Consumers are generally willing to share some information, including market data and shopping habits,” Greco said. “Capturing marketing data does no harm; it actually does good in bringing relevant information to people. The whole essence of the free Internet is underwritten by ads.”
Greco also cited the association's opposition to “do not mail” initiatives undertaken this year in 15 states and spearheaded by consumer advocacy groups intent on imposing restrictions similar to those currently regulating email spam and unwanted commercial faxes.
The challenges to both behavioral marketing and physical mail, he said, have a common theme: “Do not track, retain, contact or market,” he said. If implemented, these initiatives “would drive relevance out of marketing, and marketing out of business.”
Also challenging the viability of direct mail, Greco said, is the current state of the U.S. Postal Service, as postal revenue falls in a worsening economy. He said the postal system should reduce prices to stimulate demand and unbundle services to provide different pricing structures for different types of business services.
While seminar attendance at the convention was robust, many exhibitors said attendance on the exhibition floor was lighter than in previous years. That perhaps was a reflection of the findings of a DMA report issued during the convention showing a decline in direct marketing business performance.
The DMA's Quarterly Business Review pegged the third-quarter revenue index at 47. Index scores below 50 indicate year-over-year declines in sales, staffing and other areas. It marked the second straight quarter the index was 47.
However, the review also showed that profitability remained solid in the third quarter, hitting an index level of 62, just one point behind the index scores in this year's first and second quarters.
Agencies had the strongest index (66), followed by marketers (64) and suppliers (58).
Also released during the show was DMA's annual “Power of Direct Marketing” forecast, which projects 3.7% annual direct marketing sales growth for this year. As the economy recovers in 2009, the strong ROI demonstrated by direct marketing will boost sales growth to 4.5%, the study projected.
New volunteer leadership was welcomed during the convention. Kelly Browning, exec VP-COO of the American Institute for Cancer Research and CFO of the World Cancer Research Fund, was officially introduced as DMA's new chairman for 2008-09.
This isn't the first DMA honor for Browning. Earlier this year he was selected as the recipient of the association's annual Max L. Hart Nonprofit Achievement Award.
Also announced as new DMA officers were: Eugene Raitt, exec VP-CMO of AIG, vice chairman; David Williams, president-CEO of Merkle, treasurer; and Christine Aguilera, president of SkyMall, secretary.