The results of Marketing Week’s recent Direct Mail Attitudes survey provide a fascinating snapshot of the current state of the direct mail sector from the point of view of industry practitioners.
One particular statistic stood out: 61% of practitioners polled believe that the Direct Marketing Association (DMA) should regulate the direct mail sector.
On the face of it, this should be something of a complement to the DMA. As the largest professional body to represent the direct marketing industry, the DMA would appear to be the most appropriate candidate. But it is not, and exploring the reasons why will help to clear up a common misunderstanding about the nature of industry regulation.
To understand why the DMA could never regulate the industry as a whole we need to look at the three basic parts of the governing framework that determines what you, as direct marketing practitioners, can and can’t do. Think of it a three-layered structure, with ‘caveat emptor’ forming the base; regulation on the top; and self-regulation in the middle. The notion of caveat emptor sets out the fundamental rights of consumers and of their expectations of responsibility for their own self protection. Regulation and self-regulation together must protect those rights.
Regulation and self-regulation are two very different beasts. Regulation comprises laws drafted by Government policymakers and enforced by Government-appointed regulators with legal sanctions at their disposal. Self-regulation consists of best-practice guidelines developed and administered by industry trade bodies and practitioners. Largely speaking, the Government favours keeping regulation to a minimum and letting self-regulation keep industries in check. This is the case for a several reasons: self-regulation does the job at a low financial cost, it’s constructed by industry experts and it is far more likely to be accepted by industry because of the unintended outcomes of regulation.
The administration of regulation compared to self-regulation is also very different, and it’s here that it becomes evident that the DMA is not equipped to regulate direct mail.
A regulator must be an independent body that shows fairness and balance in its policing of industry regulations. However, the DMA is a partisan organisation with a clearly stated bias towards advancing the development of all direct marketing channels. The DMA could never be perceived to be impartial and would therefore fail immediately in its remit as the regulator of the direct mail industry. The same goes for organisations such as the Royal Mail and other brands, who respondents in the Marketing Week poll also named as their preferred regulators.
The DMA keeps the direct marketing industry in check through its role in maintaining its self-regulatory framework. Self-regulation isn’t enshrined in law, so breaking it doesn’t incur legal penalties. However, it’s vital that Government remains confident that the industry is responsible enough not to require the imposition of heavy-handed regulation. Through its work in developing self-regulation and providing guidance to companies on how to work within its boundaries, the DMA helps to demonstrate to Government that regulation is unnecessary, and thereby staves off legislative threats to the commercial freedoms of the industry.
Currently, the self-regulation of the direct marketing industry is facing a great challenge as the Government moves towards an ever-stricter interpretation of principle of caveat emptor. This means that consumers’ rights are expanding and becoming tougher, so direct marketing self-regulation must adapt to accommodate these changes.
As a regulator, the DMA would be powerless to help the direct marketing industry cope with these changes; but as the self-regulator the DMA can help to ensure that direct marketing remains a successful industry that continues to enjoy the confidence of business, consumers and Government.