*Wientzen: Online Marketing, Looming Privacy Battles Dominate DM Horizon

TORONTO–E-commerce is easily the leading area of innovation in a direct marketing field still beset by privacy-related pitfalls, Direct Marketing Association president/CEO H. Robert Wientzen told a packed house at the organization's 82nd Annual Conference here yesterday.

Multi-hued spotlights cut through the smoke that filled the Metro Toronto Convention Center conference hall after Wientzen emerged amid an indoor fireworks display that shocked delegates and briefly set aflame part of the DMA display hanging behind the speaker.

But as the pyrotechnics faded, the haze cleared and Wientzen's speech got under way, it became clear that this year's address would concentrate more on e-commerce than usual — amid the executive's usual call-to-arms beckoning direct marketers to become involved in industry lobbying efforts.

“Technological advancements are rapidly changing the way we do business, presenting us with incredible opportunities — and of course presenting us with significant challenges, including some that frankly are adversely affecting our industry's image,” Wientzen said.

The Net is creating shifts in the traditional boundaries that have differentiated manufacturers, catalogers and retailers. Wientzen cited Dell Computer's groundbreaking move onto the Web, which has made the company the leader in its burgeoning market.

He also pointed out less well-known players such as Plasticsnet, a business-to-business site for plastics industry manufacturers and suppliers.

Similarly, old-school catalogers such as Spiegel and traditional retailers like Barnes and Noble and Macy's have either broadened their direct media — part of the megatrend known as “multichanneling” — or used the Web to branch into the one-to-one arena.

But as marketers have begun to collect consumer data through more and more channels, international concern about the protection of that information has grown. As part of an effort to drill that message home to his audience, Wientzen gave unusual prominence to remarks from a number of the direct industries' critics.

“I think the administration's self-regulation policy for e-commerce privacy is a fundamental misjudgement, because you have to have privacy first guaranteed in law before you can really have e-commerce succeed,” said Privacy Times editor and publisher Evan Hendricks, via a taped overhead projection. “So I think you have the equation backwards.”

The federal government is most concerned about marketing that targets children, and the protection of individuals' medical and financial records.

The DMA will continue its “grass roots involvement” — that is, its political lobbying — on the national and local level, Wientzen said. He urged all DMA member organizations to assist the efforts.

Other nonelectronic media like catalogs and mail are here to stay, Wientzen insisted. But the Net lets customers lead marketers' selling strategies more than the old ways of selling things did. In coming years, marketers will react to the whims and requests of consumers, rather than the other way around, he said.

The morning's second general session speaker, business author Tom Peters, added an addendum to that message: While the customer can benefit from the faster, cheaper and more convenient Internet media, it is product innovation that will separate truly successful marketers from mediocre merchants of the 21st century.

Moreover, the future's most successful companies will not shirk from totally destroying their old business models in order to stay on the front of the innovation and technology curve. That goes for direct marketers as much as for anyone else, said Peters, who is best known for his book “In Search of Excellence.”

“There is no other group on earth who understands the tools that are building the new economic environment as well as you do, period,” Peters told the assembly. “The question then before us is whether you have the nerve to use the full power of these tools [that are] reinventing the world.”

Peters stopped short of advising companies to undertake a wholesale abandonment of their traditional catalog, telesales and direct mail models in favor of digital media.

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