List Execs Concerned by FTC, Media Scrutiny

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NEW YORK -- The Federal Trade Commission and the consumer press are hot on the trail of the mailing list industry, according to a panel of list company presidents who spoke here yesterday at the Direct Marketing Association's List Vision 2004 Conference at the Waldorf-Astoria.


Panelist Chris Paradysz, CEO of ParadyszMatera, said the mainstream media, including television and The New York Times, also were looking at the list business and that the story likely would break this fall.


"The media will play this out how they want, but the industry needs to be in front of it," he said.


"Did you know that the FTC is actively investigating list companies and practices?" asked Chicca D'Agostino, president of Focus USA.


She claimed that a list owner was contacted by the FTC about a year ago and had to supply countless documents and undergo eight hours of interrogation-style questioning about data and its collection and use.


Paradysz recommended that the list industry get behind principles of responsible list use to prevent further legislation that would place restrictions and burdens on the business.


D'Agostino said the DMA Ethics Policy Committee soon would issue revised guidelines for the list industry.


The panel also addressed the list industry's future health. The most upbeat assessment came from the insert media sector.


"This has been an excellent year for inserts," said Alan Kraft, president of Media Horizons. Results have been excellent, rollouts are up and new programs are entering the market rapidly, he said. He predicted the trend would continue into 2005.


Challenges to the insert business include decreases in core programs, duplication and paper costs, he said.


From a business-to-business perspective, Ralph Drybrough, CEO of MeritDirect, said things were still choppy.


"We don't know exactly what's happening out there," he said.


His firm's BTB database was up 16 percent as of July, he said, and mailers are positive about the future.


Speaking as a compiled list seller, D'Agostino said she was doing more list recommendations, giving more counts and filling more test orders lately. She also said the number of catalogers looking to compiled files was increasing.


As a broker for many types of mailers, Paradysz gave an overview of each category. He said general publishing offers are enjoying good results, but that volume is down. Catalogs differ by category, but most are prospecting aggressively. Nonprofit results are improving after a tough spell, and the small-office/home-office market is growing, he added.


Rosemarie Montroy, chief marketing officer at Direct Media, moderated the panel discussion.


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