Direct Marketers Determined to Survive Without Driver DataDirect marketers and suppliers are confident they'll survive without updated driver license and other data from the Department of Motor Vehicles now that the new Driver's Privacy Protection Act of 1994 went into effect yesterday.
The new law mandates that states require drivers to give specific permission before their information is released for any direct marketing purpose. The information, however, will still be available to companies for statistical purposes, such as research sampling and market research. This information can include type of car purchased, telephone number, address, gender, date of birth, weight, height, eyeglass use and sometimes medical information.
Unlike the original DPPA, the updated version says states must implement provisions allowing consumers to opt in to state programs that market their personal information, a change from the current opt-out provision. Most states have chosen not to run an opt-in program because the costs associated with establishing a statewide opt-in system would not be the best use of the financial resources available.
As of June 1, four states have not yet complied with the law because of their legislative schedules -- Montana, North Dakota, Oregon and Texas -- but they have committed to complying in 2001. The new act was introduced last year by Sen. Richard Shelby, R-AL, chairman of the Senate transportation appropriations subcommittee, and was signed into law by President Clinton in October as part of a $49 billion federal transportation bill.
Acxiom Corp., Polk Co., Experian Information Solutions Inc. and other large list compilers are the main purchasers of the information. These companies use it in their list or data-enhancement products. Direct marketers often overlay their house files with fields that include driver data to help them target the right people.
As a result of the ruling, companies will have to use other data sources, such as credit bureaus, magazine subscription lists and land ownership documents for information; however, the motor vehicle and driver license data are considered the most accurate.
"We're concerned from the point of view that the data that was once available was very specific to the type of vehicle a consumer purchased or leased," said Brand Caso, director of business development at Automotive.com, an online automotive parts and accessories retailer based in Santa Ana, CA. "We'd like to see which people are replacing their cars every three to four years, and we won't be able to get that data anymore."
However, suppliers and even some customers are looking on the bright side.
"While the ruling will definitely have an impact on the direct marketing industry, we have several years of experience working with states with restricted data," said Steven Hamilton, director of marketing of the North American unit at Polk Co., Southfield, MI. "We've been able to [offer our customers data from these states] by using over 30 different data sources and modeling techniques. Now, we're offering similar data for all states."
John Jira, president of the automotive information services group at Experian Information Solutions Inc., Orange, CA, agreed.
"Fortunately, we've done business in providing lists in restricted states," he said. "As a result, we have a strong background in modeled information, specifically modeling that describes people that have various brand-vehicle preferences and who have a propensity to buy a certain make and model."
Indeed, before the new DPPA took effect, lists for direct mail were restricted by the District of Columbia and 19 states: Arkansas, California, Georgia, Hawaii, Illinois, Indiana, Kansas, Massachusetts, Nevada, New Jersey, New Mexico, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia and Washington.
In addition, Hamilton said that while this data may not be as to-the-point as data from DMVs -- where a company can look for registration data and notice that a consumer has leased a car at one point and will be up for a lease in two years, "we can now look at multiple sources of data, append it and model it to actually come up with a better profile of the customer than we normally would because we had such easy access to them."
Jira reiterated that the data, however, will not be as good as DMV data.
"The users of this information will be giving up some of the pinpoint accuracy that once existed because it just won't be available," he said. "Instead, [direct marketing programs] will be dependent upon who does the best job of modeling various household information."
Bryan Graves, business development manager at the largest Chevrolet dealer in California, Mark Christopher Auto Center, Ontario, CA, also is looking on the bright side.
"The new restricted marketing space will force us to focus more on more quality interactions with customers in real time," said Graves, who plans to look more closely at customer profiles and what their lifestyles, niches and likes and dislikes are. "It's not as easy as just getting vehicle registration information, but I don't think that the easy approach is really working anyway."