25th Anniversary Issue: DM News: Yesterday, Today and Tomorrow
Let's start at the beginning. How did you come up with the idea for DM News?
It was pure serendipity, which is defined in Webster's Collegiate as "a gift for accidentally discovering something good." The time was March 1979, the place Las Vegas. I was at Caesar's Palace for a meeting with some association executives about developing a publication in an unrelated field. But as I walked through the lobby, I passed through a bustling trade show called "The DM/MA Spring Conference." "What's direct marketing?" I asked. "Is this a growing industry?" "What do you mean it's a discipline, not an industry?" It might have been the "Jurassic Period" of direct marketing, but the people I talked to knew that all the signs pointed in the right direction and there was a boom coming in direct marketing. One answer clinched it for me. Yes, there were respected magazines and newsletters in the field, but, no, there was no timely, professionally staffed newspaper covering the cascade of news coming from this discipline that was about to change the world of marketing.
What happened next?
I went back to New York and talked to everybody I could reach in the field. Ed Burnett lectured me on the list business for a few hours before agreeing to put together our charter circulation of 20,000 recipients. Walter Karl agreed to a "till forbid" advertising position on page 3, which his company, successor companies and present owner infoUSA have never given up in 25 years. Bob DeLay, president of the DM/MA, threw out the idea of making it a joint venture, but good-heartedly wished me well when I told him I didn't want it to be a house organ for an association.
Who put out the first issue?
I sold the advertising, as publisher. Joe Fitz-Morris commissioned or wrote the articles as editor. The lead headline, in vintage Fitz-Morrian prose, stated ominously, "New Warning of List Restrictions Issued," while the article went on to report that 600 direct marketers at the DM/MA List Day were warned that the only logical way to avoid government regulation was through continuous self-regulation. Other stories reported on a subscription campaign for five dance companies by Rapp & Collins, a direct mail test by the National Multiple Sclerosis Society and a new campaign for the American Express Gold Card by McCann-Erickson in collaboration with David Savage's Response Industries, which was handling the DR campaign for McCann since its recently formed Direct Response Division was merely a support arm rather than a profit center. Ogilvy & Mather Direct Response, Harold Cabot Co., Woodruff-Stevens & Associates, Service Web Offset and Wiland and Associates were all covered in stories about supplier companies.
Did you ever spell out a publishing or editorial philosophy for the newspaper?
Well, of course, as a movie buff I had seen "Citizen Kane" many times and believed it was obligatory to put up a Statement of Principles on the newsroom wall. Here are some selections from mine, which was published in the March 15, 1980, issue: "Direct marketing is a perfect example of a specialized marketplace with issues that affect society at large. Freedom of speech, privacy, government regulation - all of these need to be debated and resolved not only for the good of the direct marketing community, but for the rest of society as well. ... The marketplace is providing DM News with the final necessity for great reporting - namely, a "beat" that is teaming with news. What can compare in volume and variety of news items with direct marketing in 1980? A big city in the middle of the Industrial Revolution? Some of the issues affecting society at large have already been mentioned, but what about the new technology, the new media, the new marketing ideas? To call it a "booming market" doesn't half capture the intensity of activity, the achievements and success stories unfolding concurrently with the failures, frauds, bankruptcies, not to mention new lists, new people, new technology and, inevitably, new publications. Direct marketing, in short, is a reporter's paradise and a community sorely in need of a great newspaper. We intend to satisfy that need by filling this reporter's notebook, called DM News, with accurate, objective and truthful notes, and we intend to share those notes with our readers, even on those rare occasions when someone might object."
Do you believe that DM News has fulfilled this mandate?
Looking back, I believe these lines have held up pretty well as a description of the marketplace and mandate for our coverage. Though they reflect a certain degree of youthful idealism, I believe that all members of our staff, present and past, have believed in these standards and tried their best to adhere to them. Of course, it is always up to the readers and the marketplace to pass the final verdict.
How were the early issues received?
The layout and design were less than scintillating, but the writing was crisp, the headlines were breezy and the articles were filled with news and information about the people, companies and technologies that were in the vanguard of the DM revolution - except possibly when we wrote about industry meetings. Joe Fitz-Morris found the words "controversy erupts" to be irresistible when describing any meeting, no matter how uneventful. This predilection did not ingratiate us with meeting organizers. All the same, the newspaper was received enthusiastically by readers and advertisers.
As the years ticked by, did your coverage reflect the growing sophistication in the business?
Absolutely, and not only in our news coverage and special sections, such as those we introduced on database marketing and telemarketing, but also in our growing roster of expert columnists. Stanley Fenvessy wrote a column on a field that he basically invented, operations and fulfillment, from our first issue in 1979 until his death in 1994. Other important columnists over the years included Richard Barton on government affairs; Stephen Belth on nonprofit fundraising; Ed Burnett on the list business; Bill Dean on catalogs; Gene del Polito on postal affairs; Robert Gellman on privacy issues; Arthur Middleton Hughes, Rob Jackson, Jim Wheaton, David Raab and David Shepard on database marketing; Alistair Tempest, Jonathan Lambert and Bill McNutt on international; Roy Schwedelson on marketing of high-tech products; Martin Gross, Stan Rapp, Joan Throckmorton and Dean Rieck on creative strategies; Bob Bly on B-to-B; Rosalind Resnick on e-mail marketing; Seth Godin on permission marketing; and Arthur Winston and Andrew Lustigman on legal matters. (Please write if I inadvertently omitted anyone and we will run a correction in the paper.)
Did your editorial approach or the composition of your staff change as the pace of change and new technology accelerated?
Fitz-Morris resigned in 1985. He had negotiated for a piece of the action when I hired him, so, as some wag later put it, he left the company with a lump in his wallet, if not in his throat. We then promoted Ray Schultz to the editor slot. This was a period of rapid growth for the business and for DM News, during which we expanded our full-time reporting staff and ratcheted up our coverage of the advances in database, telemarketing and other technologies. In the early 1990s, we did a lot of trotting around Europe to international DM shows in London, Paris, Wiesbaden and other locales, and made a major effort - first with our monthly sections "Dateline Europe" and "Dateline Canada," then with our monthly supplement DM News International, our "Profiting from the New Europe" and other internationally focused shows - to provide information on new opportunities, and to expand our ad base. Tom Weyr, a writer who conducted interviews in four or five languages, served as editor of DM News International.
What happened with that?
In retrospect, I think we were a little before our time. Only the top tier was successful in international marketing in the early '90s, and Internet use had not reached a level with consumers and businesses that would facilitate global marketing.
How would you describe the DM News franchise today?
The weekly print edition of DM News serves a circulation of 50,300 direct, database, interactive and online marketers, all of whom, unlike any other DM publication, have requested their subscription directly within the past year. Under editor-in-chief Tad Clarke, who worked for Gannett Newspapers for more than 10 years before joining DM News in 1997, we have an editorial staff made up of professional journalists who have in-depth knowledge and experience in the subjects they cover in addition to being fine journalists. But the DM News brand extends far beyond our weekly print edition. Our Web site, www.DMNews.com, carries fresh news and features every day and offers an archive of more than 20,000 articles dating to 1995. Many direct and online marketers get their daily news from our e-mail newsletter DM News-iMarketing News Daily, which serves nearly 30,000 readers a day. Our weekly e-letters, E-Mail Marketing Weekly and Search Marketing Weekly, provide focused coverage to their target areas. Without disclosing any secrets, we have a lot of exciting initiatives on the drawing boards.
Do any special memories stand out?
Of the thousands of scoops that DM News has published over the years, one of the most dramatic, disturbing and moving to me was our front-page photo coverage of the terrorist attacks on New York's World Trade Center on Sept. 11, 2001. The photos of this horrific event were taken from our office window only blocks from where the towers stood, by then-publisher Scott Vail and editor Tad Clarke. The staff remained in the building to get out the next day's e-mail newsletters and the next week's print edition. I tip my hat to them. I would also like to thank Ed Burnett for a very touching note that he sent to me on the occasion of my 50th birthday. It read, "It is a pleasure to watch a man with a dream make that dream come true."
Moving forward again to this retrospective issue, what do you think of the articles?
I am in awe of the insights and observations that have been assembled. I think it's nothing less than a definitive history of the evolution of direct marketing over the past quarter century. I want to compliment senior editor Mickey Alam Khan, who proposed the idea and commissioned the contributors, along with Tad and the staffers who made this project a reality.
Did you have any favorites?
Several stand out in my mind. Don Libey's masterful analysis of the catalog business includes a hard-to-refute list of the six driving forces in direct marketing over the past 25 years. He identifies these as niche marketing, database marketing, printing technology, multichannel integration, professional management and private equity funding. Of these, he asserts, database marketing is probably the most significant because regardless of what marketing channel or combination of channels you use - catalog, retail, direct mail, telemarketing, Internet - it's still database marketing.
The article by Charles Prescott on international direct marketing is informative to me personally because we spent many years covering foreign markets and promoting international direct marketing. Prescott confirms that demographics and technology have revolutionized direct marketing, along with the many advances in infrastructure and tools that have swept the world, such as the digitalization and mass production of optical cable, computerization, digital photography and digital printing. I do not entirely agree with his contention, however, that economic and political deregulation have been the unmitigated boon for direct marketing that he posits.
Because despite its long-term benefits to direct marketing and the economy, there is a dark side to deregulation, a side that can produce instability, massive corruption and fraud, boom and bust economic cycles and other unanticipated and undesirable consequences. Consider the savings bank industry, where the sharpies moved in after deregulation and it cost the American taxpayer over a trillion dollars to clean up the mess. Deregulation of the airlines, similarly, may have freed the airlines to compete with each other and cut the cost of a ticket from Shanghai. But if the stories I'm reading every day in the financial press are true, most of the airlines in this country are either bankrupt or on the verge of bankruptcy.
So what does this have to do with DM?
The telecommunications business has followed the same script pretty closely, and many of the most prominent CEOs, after looting their stockholders' money, have now taken up residence in federal prison. For their part, telemarketing and teleservices companies used to be a big business in the United States, employing a lot of people and spending a lot of money. As a matter of fact, for years we published a monthly supplement called TeleServices News, which ultimately was reduced to a section in DM News as the remnants of the call center business moved to India and other countries.
Would you elaborate on the boom and bust cycle you mentioned?
In 25 years in the direct and database marketing business, we have seen the growth of the business stalled or reversed by three recessions, at roughly 10-year intervals - one in the early 1980s, the next in the early '90s and the last, dating from the end of 2000 and beginning of 2001 to the present. The severest of these for DM News and most of the publishing business is the current slowdown, which started with the bursting of the Internet stock bubble. No one doubts that the Internet is a marvelous technological innovation that has already had, and will continue to have, a profound influence on commerce and society. But perversely, it has already "snookered" us at least twice.
In what ways?
iMarketing News, one of our proudest accomplishments, was launched as a monthly in 1999 and was a big hit with readers and advertisers. In 2000, we upgraded to weekly and racked up an amazing 2,000 ad pages - only to see the advertising base depart en masse as the market crashed. In 2002, we merged iMarketing News back into DM News, where it had started as Web Marketing News. That was the first time.
The second time was in 2003 and 2004 when we turned around and noticed that Internet-based media, from Google and search marketing to e-commerce sites and e-letters, like so many foxes in the hen house, were raiding the advertiser base in our print edition, particularly among suppliers of online and Internet-oriented services, who, not surprisingly, were true believers in online marketing and advertising.
So what is the answer for DM News and the citizens of the direct, database and online marketing community?
It was interesting to me, in reading the articles that make up this retrospective issue, that virtually all of the authors acknowledged, directly or indirectly, that between technology and demographics, innovation and deregulation, survival in the world of direct marketing can be reduced to the basic evolutionary rule: adapt or die. One article mentions that the demise of the list industry is exaggerated. Another talks about the need of telemarketers to adapt. They all recognize the basic instability and unpredictability of contemporary business. Maybe Don Libey expressed it best in the last sentence of his article, where he wrote: "The true driver, however, has been the industry's ability to adapt to change and to embrace opportunities that emerge."