Wientzen: Agencies Challenged Even as Direct Buying, Ad Spend Rise

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Depending on how marketers address key industry challenges, direct and interactive marketing agencies could be affected in a major way, Direct Marketing Association president/CEO H. Robert Wientzen told agency executives.

Take the influence of the Internet and database technologies on advertising spends. As broadband gains ground, e-mail marketing will ramp up with even more video content.

"Already, e-mail marketing is off to a good start, with 66 percent of marketers experiencing an increase in their e-mail marketing sales in 2001," Wientzen said at the DMA's Agency Council Executive Briefing on June 28.

This steady migration to the Web means that the customer is not as brand loyal. The new customer is driven by better prices and attentive service, he said, and is much more informed and therefore more in control.

Political challenges also could hurt marketers. The hot-button issues are privacy and data security, state and federal do-not-call lists and spam. The ailing U.S. Postal Service is another institution under threat from the Internet's growing influence.

"In short, the 227-year-old postal service is in crisis," Wientzen said. "Costs continue to rise while mail volume is dropping. In fact, for the postal service's year-to-date, Standard Mail has plummeted a startling 6 percent. Less volume obviously means less revenue for the postal service."

Alluding to the recent defeat of the postal reform bill in the House Government Reform Committee, he said Congress and the White House should create a commission to study the USPS and its role in a rapidly changing delivery and communications environment. Previously, the DMA was opposed to a presidential commission, saying it would only slow down the process.

Finally, marketers and agencies should work on creative ways to promote the direct and interactive marketing industry along with the benefits of shopping from home, office or the computer, he said. U.S. sales attributed to direct and interactive marketing rose 9 percent last year to $1.86 trillion, up from $1.71 trillion in 2000, according to the DMA's economic impact study.

Simultaneously, spending on direct and interactive marketing rose 3.6 percent to $196.8 billion, from $189.9 billion in 2000. This accounted for 55.2 percent of all U.S. advertising spending, said a DMA report on how direct marketing agencies are faring in the current economy.

"As industry sales continue to grow, the number of at-home shoppers has remained stagnant for years," Wientzen said. "While the Web will fuel our industry's customer base, marketers and agencies must focus their attention on attracting more customers and encouraging repeat sales."

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