Mark Roy, managing director of database management experts The REaD Group, should be a very happy man. For a start, he’s in a growth industry. Figures from the Direct Marketing Association (DMA) 2000/1 survey show that annual UK expenditure on direct marketing rose 22 per cent between 1998 and 2000, and currently stands at over &£10bn. For its own part, the REaD Group has launched a number of products – including a bereavement register that stops companies mailing the deceased – and has a number of blue chip clients on its roster. So why is Roy worried?
“The industry is coming under close scrutiny from people who don’t know the first thing about it,” he says. Indeed, as direct marketing has grown in scope so has public concern over the collection, storage and use of data. Roy views The Data Protection Act 1998 as a Government intervention to cover the industry’s failure to self-regulate, and adds: “Unless we as an industry get our act together and look after our customers in a more responsible way, we will continue to be told what to do.”
This isn’t the only issue that worries Roy and other practitioners. The Home Office recently published draft regulations regarding the sale and supply of the Electoral Register, against which mailing lists are checked. The DMA estimates that restrictions on access could cost the industry &£95m per year in misdirected mailings, which it claims in turn will cause thousands of job losses and add to the dreaded “junk-mail” perception of the industry. As electoral roll data is also used for credit referencing, there is concern that consumers seeking credit will be forced to wait unacceptable lengths of time for credit clearance.
If that isn’t enough, threatened increases in the cost of postage are causing consternation, as is draft European Union legislation that threatens to severely curtail the use of e-mail marketing. Practitioners feel the EU has failed to recognise the difference between “spamming” and the legitimate use of e-mail in customer relationship management programmes.
Furthermore, there remain the nagging issues of raising the status and public perception of the industry and ensuring that enough talented young graduates learn that direct marketing isn’t just a “couldn’t-quite-hack-it-in-advertising” option. As Dave Poole, chairman of both direct marketing agency DP&A and the DMA’s Creative Council says: “The industry is growing at an astounding rate and needs lots more qualified practitioners.”
So who’s looking after the industry’s interests? Until now the DMA has been an industry trade body in the most traditional sense. Founded in 1992, it set out to promote best practice, provide lobbying and legal advice for members and actively work to raise the status of the industry through its annual awards ceremony and to encourage and enhance consumer trust by setting industry standards.
Although the DMA does run conferences and workshops, training for the industry is largely seen as the province of the Institute of Direct Marketing, which was founded in 1987. The IDM provides accredited courses and has strong links with academic institutions in the UK and overseas.
Two’s a crowd
But there are those in the industry who feel the industry doesn’t need two bodies. Some say that, as the DMA and IDM are working for the same goal – the raising of the status and practise of direct marketing – the two should join together. The industry needs one strong body to act as a united force against the current threats.
“Frankly, the difference [between the IDM and the DMA] is really cosmetic,” says Chris Gordon, chairman and group chief executive of WWAV Rapp Collins Group. “The DMA says it exists to raise the stature of the direct marketing industry. One of the key ways of achieving that must be to provide education and training for the profession.”
Grahame Page, managing partner of communications agency MindShare, says: “Having two bodies that purport to represent the industry has to be less efficient than having only one. One body is cheaper to run than two; one body has a clearer positioning than two; if there is competition between the two then there will inevitably be politics.”
Even Professor Derek Holder, managing director of the IDM, says: “The IDM and the DMA, being different entities with different constituencies and objectives nevertheless share the aim of helping direct marketing to flourish commercially.”
So why don’t the two just merge? Holder says: “The IDM and DMA perform complementary roles – one looking after individuals, the other representing wider industry issues. On the occasions when there is genuine cause for the two to work together this is done.”
The DMA states: “The IDM and DMA complement one another and we are happy to coexist as we do now. Furthermore, DMA membership is for corporate entities, while the IDM is for individuals.”
As DMA chairman Jenny Mosely puts it: “Working together is top of the agenda, merging is not.”
Some industry figures believe that such public statements of mutual respect and co-operation are a false front, disguising insurmountable political differences between the two bodies. “The IDM was against the formation of the DMA and it is well-known that there has always been tension between the two bodies,” says Gordon.
Mosely disagrees. “I think we can do a lot together. If we merged we’d be spending our time arriving at mission statements and joint objectives when we could be getting on with the work.” Mosely insists that the level of cooperation between the two bodies needs no improvement. She adds: “We talk to each other more than people think.”
Not everyone within the industry believes that the two bodies should merge. Poole observes: “The two bodies have very different roles to perform. If they were to merge they’d probably prove incompetent t both functions.”
Roy adds: “It’s an interesting question and one that has been discussed at great length before. There is an argument that separation provides a wider platform for industry people to draw on.”
The notion that a merger would solve the industry’s problems could be false logic. The DMA has an impressive list of recent successes, including the combating of limits on the use of the Electoral Register (active lobbying has meant that the Home Office has now agreed that electoral roll data can be used for credit referencing and is considering how it could be used for list-cleaning purposes), a &£9m saving for the industry by a reduction in second class mail and the persuasion of the European Union to accept “opt-out” not “opt-in” for e-mail.
Indeed, some people in the industry feel the DMA’s only real problem is that it doesn’t blow its own trumpet loudly enough. Whatever the facts, it is debatable whether a merger with the IDM would make it more effective in its current battles, or help to address long-term concerns.
Peter Kempsey, managing director of data management consultancy Printronic International, thinks that the DMA should try to bring in more members than the current figure of about 850, but it isn’t necessarily true that a merger would achieve this.
Roy feels the DMA needs to get much tougher with those who fail to adhere to the industry code of conduct, but thinks joining with the IDM wouldn’t automatically help. Again, there are those who think the IDM is doing a great job, and those who think that it could do better – but it takes rather a leap of logic to arrive at the conclusion that a merger is the only way to address its shortcomings.
Who pays the piper?
Perhaps the most serious accusation is that of the DMA’s partiality in addressing the Royal Mail’s potential monopoly practices, The Royal Mail part-funds the DMA. Mosely is unfazed by the question. She says: “We have a number of partners in the industry who support us equally, such as BT, so I don’t see that as much of an issue.”
One thing is clear. No one is taking the attempted seduction of the larger agencies by the Institute of Practitioners in Advertising seriously. Kempsey says; “There is no room for another player. It will only create more confusion and discord.”
Roy adds; “They can seduce away all they like, but this DMA member is going to keep his trousers on.”
So what conclusions can be drawn? Well, unfortunately, only that some people in the industry feel that the DMA and the IDM should merge and some don’t. What can be made of this? As Mosely says, “Everyone is entitled to an opinion, and everyone gets the chance to say what they think in an open forum.”
The very nature of debate means that diverse and polarised views will be expressed and should be heard. The key issue is: does the call for a merger come from a few vociferous members of the industry, or is this truly how the majority feel? And if it is, shouldn’t the two just get it together? The only way to find out for sure would be to put it to a vote.