DMA’s Wientzen: Online Marketing Booms; Trouble Lurks

Online marketing’s power is growing, but so is the danger posed by spam and overzealous policymakers, warned Direct Marketing Association President and CEO Robert Wientzen.

Wientzen gave the keynote address at the organization’s Net.Marketing conference held in New York this week. It will likely be his last appearance at the conference, at least in his role as the group’s head. Longtime chief Wientzen has said he’ll retire this summer and a search is on for his replacement.

In Wednesday’s speech, Wientzen began by extolling direct marketers for their use of the Web as a sales channel, saying U.S. e-tailers drove an estimated $40 billion in sales in 2003. Wientzen added that sales are expected to grow at a more than 20 percent annual growth rate over the next four years, surpassing $100 billion in 2008.

E-mail played an important role in driving those sales. Wientzen said 40 million American adults had made a purchase in response to an email within the preceding 12 months, a DMA study found. Those people made, on average, 6.5 purchases at an average of $126 per purchase. He noted that the number of buyers includes responses to both solicited and unsolicited email.

“Importantly, well over one-third of those sales were generated from unsolicited email,” said Wientzen.

The DMA’s position is that sending unsolicited email is acceptable as long as it contains an unsubscribe link. Many interactive industry experts disagree with this stance, contending that only opt-in email should be sent. The federal government, with its Can Spam legislation, has condoned unsolicited email if it’s sent with certain unsubscribe information.

What the DMA considers spam is email that intends to commit fraud or doesn’t allow an unsubscribe — offenses that were already illegal before the recent Can Spam act was passed. Wientzen urged federal and state governments to provide more resources to investigate and enforce the law.

“The DMA and AIM are doing everything we can to combat spam in order to protect and nurture responsible email marketing,” said Wientzen. “Because if we don’t, email marketing — which is a ‘babe in its cradle’ — won’t make it much past its ‘toddler’ phase.”

To that end, the DMA Wednesday released new guidelines for email append, a practice by which email addresses are added to existing consumer records. The new guidelines say append is acceptable when a consumer gives a marketer permission and under certain other circumstances. These include when there’s an established business relationship with that consumer, when consumers were given notice and choice about receiving third-party offers when originally providing the data, and reasonable efforts are taken to ensure the append is accurate.

The guidelines say marketers shouldn’t rent, sell, transfer or exchange an appended email address. They should also include an opportunity to unsubscribe, according to the guidelines.

Such guidelines are aimed at heading off what Wientzen calls “unwelcome, uninformed and unbalanced policymaking.” He issued a warning to marketers that they should pay close attention to the new political environment, in which privacy is a hot-button issue likely to be taken up by lawmakers.

“After all, politicians — in Washington and the states — know that they’re on to something that the public and press are very receptive to,” he said. “So I believe they will continue to step in and regulate as long as there are matters that we — as an industry — don’t address expeditiously and thoroughly.”

Wientzen said the industry should give serious consideration to being more transparent with information usage practices, and perhaps call for disclosure of sharing of information to any compiler.

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