*Database Market Thrives Even As Privacy Squall Looms

CHICAGO–The current state of the database marketing industry is booming and the future looks just as promising, DMA president/CEO H. Robert Wientzen said at the 1999 Summer NCDM show here yesterday. Yet he asked representatives of the 114 companies attending the conference to realize that the database industry is at the center of the privacy storm.

“Database technology has expanded beyond anyone's imagination,” Wientzen said. “Those advances are responsible for what the direct marketing industry has become today — and that is a $1.5 trillion industry.”

The prognosis of the database marketing industry is excellent, he said, especially with its ties to e-commerce and desire to bring together those technology products with the old-school thinking of database marketers.

“You can see it in the corporate mergers and the combining of database and Internet activities,” he said. “Data warehousing combining with e-commerce and real-time database technology is having a major effect on frequency marketing and loyalty programs on the Web.”

But Wientzen sees a “storm on the horizon,” which he called privacy and data security — and database marketing is at the vortex of this debate.

“Every bill that gets passed on the Hill, there are a dozen more on the state level that we have to deal with, and that is no exaggeration,” he said. “Privacy is always in the press, and most of the time it is an unbalanced view.”

Most of the situations that grab headlines he categorized as events that occurred because of key managers who are simply unaware of the seriousness of the issue. Others he merely called bad business decisions.

Keynoter J. Walker Smith, managing partner of Yankelovich Partners, Atlanta, said marketers must relinquish control in the marketer-consumer relationship if they want to be successful in the future.

“We are dealing with a brand new type of consumer now,” Smith said. “Because of the information people now have access to, they can reinvent themselves into experts of whatever they choose. Because of this, they have the ability to ask questions they never would have thought of asking before. They are the self-invented consumer.”

There is no more script that people follow. “Their lives are now defined by the set of rules they create for themselves,” he said. The self-invented consumer is no longer content to choose from the options provided by marketers.

“Instead of marketing to choosers, we are marketing to inventors,” he said. “They are saying what [marketers] want to market should be at my discretion not yours. They want to be in control of their experience.”

To deal with the self-invented consumer, Smith said marketers need to use tools that provide three things: good context and completeness, which together provide the third component, consumer empowerment.

“The viewpoint that consumers are happy because they are currently spending a lot is too narrow,” he said. “They might be spending more now but they are enjoying the process less and less.”

Priceline.com, he said, is headed in the right direction in that it allows consumers to purchase things on an RFP — request for proposal — type fashion.

“They are offering their patronage for us to bid on,” Smith said. “If you champion the notion of empowerment, you will be able to establish loyalty by giving up control. The marketplace is now becoming an area of true give-and-take.”

Profiling and identifying customers will have to be done differently as a result of this trend. The new sell will be done through dialogue because these consumers want to be spoken to. Marketers also should expect to leave behind the concept of push marketing for the pull buy.

“Look down the road and anticipate the future of self invention,” he said. “That is how you will be able to profit. Self invention is not this big tidal wave that is going to wipe us away. But it is a steadily rising tide that will inundate us unless we find new anchorage because it is creating a wholly new demand for what consumers want in the marketplace.”

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