EU Directive Helps DM Grow in Denmark

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COPENAHGEN - Denmark is that rare European country where the EU's data protection directive will liberalize direct marketing practices rather than restrict them once it becomes law.


The deadline for translating the directive into the law of EU member states is October 24, but only a few will make it. The Danes won't. They haven't even started debating the law in the Folkeding.


"We don't expect the legislation to clear parliament before the first quarter of next year, sometime between January and March," Peter Nyemann, managing director of Scandirect, a major Danish DM agency, said.


"We expect the new law to be in force next March and then we will start list broking private addresses. A lot of companies are interested in doing that, not just our agency, and we expect that to have a big impact on the Danish DM market."


Nyemann expects a major shift from unaddressed to addressed mail as a result. "So if you define DM as addressed mail activity a lot of volume will move into addressed direct mail campaigns."


He does not think the shift will involve any loss of mail volume. At present direct mail generates an estimated 9 billion Danish kronor ($1.3 billion), about a third of total media spending. No reliable figures exist on just how much mail is sent out in Denmark, Nyemann added.


Unlike Norway where DRTV is going nowhere, direct response is prospering in Denmark which did not have any of it five years ago. "It has become a growing market here and that's why call centers have grown so much."


TV costs have fallen rapidly in Denmark as more and more commercial channels have gone on the air and pan-European channels have expanded their reach.


"We have five Danish channels where you can buy TV spots," Nyemann said. The Swedish owned TV Shop runs infomercials on its own Scandinavian channel, usually at night and in the morning.


DRTV has also helped boost Denmark's call center industry which first sprouted in the eighties fielding calls from Germany where restrictive shopping hours made flipping mail order calls across the Danish border a lucrative business.


As for the Internet, Denmark lags behind the other Scandinavian countries, but is still far ahead of most European nations. Shopping malls are in the early stages with payment modalities holding back growth.


The banks haven't helped, running ad campaigns that they cannot protect credit cards used to pay for goods on the Internet from misuse. "That has limited Internet shopping," Nyemann said.


Credit card penetration in Denmark is a sometime thing, he noted. Few Danes carry Visa or MasterCard but almost everybody has a bank card that can be used in stores and supermarkets as well as at ATM machines.


But few Danes will use them on the Internet before secure protection against misuse is in place.


Scandirect has been owned by Orkla Industries, a Norwegian conglomerate, since January of this year. Armed with new capital it has expanded into two new business units.


One, Scanbase, hosts marketing databases for major clients, while the second, Scanmedia, is a brand new unit "we started because the new EU directive allow us to go into list broking."


That is already a big business for Orkla "so we have the possibility of using economies of scale with our sister companies in Norway and Sweden."


The agency's two biggest clients are Advanced Nilfiski, a company that makes vacuum cleaners, and Codan, Denmark's largest insurance company.


Scandirect run pan-European campaigns for Nifiski's BTB program, using the resources of the Interdirect Network of agencies to supply local language copy.


For Codan, it handles loyalty and customer care programs that have a membership of 250,000.

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