**FEDMA Focuses on Deficit Reduction, Building E-Confidence

BRUSSELS, Belgium — FEDMA's three-year program to wipe out its $60,000 deficit in three stages “is well on the way,” and the reduction this year should total 40 percent, chairman Ivan Hodac said here this week.

The Federation of European Direct Marketing wound up its two-day forum in a generally far more upbeat mood, with even critics conceding that the organization “had turned the corner.” Hodac, who had glossed over the budgetary problems in his opening remarks earlier in the week, said, “If things go on as they have been, we should be in the black by the end of next year, and certainly by 2002.”

Hodac insisted that while FEDMA had faced “some problems, they were not immense” and that most of them had arisen from the merger several years ago of predecessors FEDIM and EDMA, one a lobbying group and the other a membership organization. Two cultures needed to be meshed, overhead cut and the association reorganized. He conceded that the 36-member board of the merged organization had been far too large, and that had impeded decision-making.

“We're down to 29 and we're hoping to reduce the number to 20 by 2002, which is about the number that shows up for our meetings now,” he said.

Current FEDMA membership is 385, down 20 or so from last year but with fewer membership categories.

“We've simplified categories and cut them down to three — the national DMAs, corporations and companies,” said director general Alastair Tempest.

Lobbying, he said, remained the group's core competency.

Certainly the national DMAs believe it is, and reforms enacted so far have not ended the disagreement over FEDMA's essential functions. DMAs believe research and lobbying should be the key rather than membership activities.

“I think you will see FEDMA return to its FEDIM roots,” said Colin Lloyd, president of the UK DMA. “It will be an evolutionary process, but that's where I think the DMAs would like to see FEDMA go.”

Since large DMAs such as those in the United Kingdom and Germany have the greatest fiscal clout, observers said their views were likely to prevail.

Lloyd, who spoke at the forum, said he had spent a good part of one of the days at the forum at the European Commission and found that EC officials held FEDMA in high regard, a good omen for the future. DMAs, he added, want to get more involved.

Others said that financing still needed some trimming and that they were not sure that FEDMA should be in the conference or publishing business — at least not beyond research studies.

Tempest and other staff members also made these points:

• FEDMA was eager to help build consumer confidence in e-commerce and had adopted an e-commerce code for members in September. The code, Tempest said, provides a good legal base for Europe's direct marketing industry.

• FEDMA is studying whether to issue a Pan-European trust mark that would increase buyer confidence when they see it on e-tailers' Web sites. The problem, Tempest said, was that five national DMAs had trust marks, and he did not want to undermine them. He expected to make a decision by early next year.

• The Global Business Dialogue on Electronic Commerce, a group of high-powered executives concerned with free development of e-commerce, had invited 40 organizations to a meeting in Miami in September to discuss trust marks, an alternate dispute resolution system and other e-commerce issues.

About 25 groups came and decided to create an informal organization that would develop new ideas in the trust mark, self-regulation and other confidence-building institutions.

• Internet fraud was becoming a major issue that the industry needs to address, specifically to push law enforcement into taking a more active role in fighting cyber crime.

“We can't police the issue,” Tempest said, “but we do need proper application of existing laws to stop fraud, and we will work closely with the authorities to help them do so.”

o Postal liberalization is a major issue for FEDMA lobbying efforts. The European Commission has proposed reducing the “reserved” area for postal monopolies to letters heavier than 50 grams, but the European parliament insists on 150 grams.

If parliament has its way, the introduction of free postal competition across the European Union could be seriously crimped. Dates for final liberalization are still up in the air, with a decision to be made in 2004.

This year's forum drew 150 participants, according to an unofficial FEDMA count, with more than 300 attending Monday night's Best in Europe gala event where 70 gold, silver and bronze medals were awarded. A total of 430 campaigns were entered in the competition, 300 more than last year, and were judged over a September weekend in Dublin, Ireland.

In his closing remarks, Tempest said FEDMA's agenda next year would focus on governmental affairs, self-regulation, education, research publications and the forum. No date has been set for the 2001 forum, but it will probably be in June.

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