Wientzen: DMA Fiscal Picture Brightens, But Industry on 'Slippery Slope'

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ASPEN, CO -- After two years of big losses, the Direct Marketing Association's finances are apparently turning around.


Fiscal 2003, which ended June 30, was "a year of slight surplus," DMA president/CEO H. Robert Wientzen said in the Q&A portion of his keynote address at Donnelley Marketing's third annual Consumer Privacy Conference here last week. Wientzen did not give specific numbers.


The DMA files its taxes as a 501(c)(6) not-for-profit organization. As a result, its tax filings are public record and available to anyone who requests them. They generally become available eight months after the DMA closes its books on the fiscal year.


The DMA operated at a loss of more than $3 million in fiscal year 2002 and lost $233,865 on its investments. The preceding year, it operated at a loss exceeding $1.7 million and lost more than $1.9 million on investments.


Meanwhile, though the DMA's financial picture has reportedly brightened, the same cannot be said for direct marketing's legislative landscape. Labeling the past six months as "horrible" for DM from a regulatory standpoint, Wientzen said the industry is on a slippery slope and called on marketers to take action to stop the slide.


Wientzen said he was "dumbfounded" by the number of direct marketing executives who have called the DMA recently saying: "What is this do-not-call stuff and does it apply to me?"


Since the Federal Trade Commission made the no-call registry -- which takes effect Oct. 1 -- available to the public, 28 million households have signed up, Wientzen noted. Though the FTC predicts that 60 million to 65 million households will sign up, Wientzen said, he thinks it will be more like 40 million to 45 million.


"They got that [65 million] number from us; specifically, they got it from me," he said.


However, he said, do-not-e-mail and do-not-mail lists loom. Wientzen said that he received a long audience with Sen. Charles Schumer, D-NY, to try to talk him out of his proposal to amend anti-spam legislation in the Senate with a do-not-e-mail list.


But "we really failed to convince him," Wientzen said.


Wientzen called on direct marketers to contact Schumer, whom he called a "former" friend to the industry, to protest the proposal. He added that the regulatory environment could grow far worse for DMers and called on attendees to examine their database marketing practices and the practices of those they do business with.


"Take a long look at what you're doing," he said. "You also have to take a look at what your suppliers are doing. If you're a supplier, you have to take a look at what your customers are doing."


If attendees believe their companies' database marketing practices wouldn't stand up to scrutiny from, say, a "60 Minutes" or "Dateline NBC" report, "then I think you need to consider what your company is doing and fix it," he said.


A staggering 50 privacy-related bills are pending in the 108th Congress, Wientzen said, adding that Florida Republican Rep. Cliff Stearns' Consumer Privacy Protection Act, or H.R. 1636, is the one "most likely to move."


Wientzen said he expected the Privacy Protection Act of Sen. John McCain, R-AZ, to be the one to move forward in the Senate.


Another threat on the horizon: The Fair Credit Reporting Act is set to expire Jan. 1. As a result, Wientzen said, "states and maybe even localities may enact their own rules.


"Clearly, if we must have privacy legislation, we'll need a single federal rule."


However, he said, the Treasury Department, FTC and Federal Reserve support FCRA reauthorization.


On another topic, when asked why the DMA doesn't do more public outreach, Wientzen said a public relations firm hired by the association determined that any message the DMA could take to the public would be defensive.


"We're not getting our message out, and when we do, it tends to be defensive," he said.


About 200 of Donnelley Marketing's clients attended the privacy conference, which included keynote addresses by former President Bill Clinton and President Bush adviser Karen Hughes, and a surprise appearance by Sen. Hillary Rodham Clinton, D-NY.


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