Companies using telemarketing and e-mail to deliver
direct marketing messages to consumers are being seriously affected
by new laws and growing consumer privacy concerns, according to
delegates at the Fourth Annual Privacy & Security Summit held
in Washington DC.
The trend is also causing compliance headaches for companies,
while making it especially difficult for new companies to prospect
for customers.
"The cost of reaching consumers is going up, while response is
down," said Jerry Cerasale, senior vice president of government
affairs at the US Direct Marketing Association (DMA).
One of the biggest examples of the increased challenge facing
direct marketers is the National Do Not Call registry set up last
year by the US Federal Trade Commission. So far, more than 57
million numbers have been included in the registry, and 200,000
more are being added weekly, said Lois Greisman, associate director
at the FTC's Office of Consumer Protection.
At that rate, the registry appears to be on track to reach the
60 million number the FTC anticipated when it first set up the
registry, she said. more than 60,000 telemarketers have also
registered with the FTC.
So far, the registry seems to have worked to curtail unwanted
calls to consumers, Greisman said during a panel discussion at the
show, and the telemarketing industry has shown "extraordinary
compliance" with the requirements of the do-not-call law.
About 27% of respondents in a recent poll said that
telemarketing calls had stopped entirely after their names were put
in the registry, and as many as 90% said their call volume had
dropped, she said.
But it has also sharply curtailed the number of outbound calls
telemarketers can make, and it has created several
compliance-related issues for direct marketing companies, said
Keith Fotta, chief executive officer of Gryphon Networks, afirm
that does compliance management work for several large
companies.
For instance, apart from the national registry, 43 US states
maintain their own do-not-call lists. In addition to those lists,
some companies also kept do-not-call lists of their own as well as
lists maintained by organisations such as the DMA. Looking ahead,
it will be especially important for companies to ensure consistency
between such lists, Fotta said.
Meanwhile, new regulations such as the Can-Spam act are making
it harder for US companies to use e-mail as a marketing
channel.
Companies have to clearly label their messages as commercial,
cannot use false or misleading headers and subject lines, and are
forbidden from harvesting e-mail addresses from online sources.
Companies must also offer users clear opt-out mechanisms,
provide them with a physical contact address and maintain lists of
users who don't want to be contacted via e-mail.
Another huge problem facing direct marketing companies via
e-mail is spam.
The tremendous volume of spam being generated now is leading to
increasingly aggressive measures by consumers and internet service
providers to block it. Companies with legitimate marketing messages
are unable to get past the e-mail filtering, spam detection and
blocking tools now in more widespread use.
The situation is getting so bad that even commercial e-mail that
a consumer might have consented to receive - such as online bills -
is sometimes blocked, either by consumers themselves or by ISPs
acting on their behalf. "We've got to figure out spam or else
e-mail (marketing) is going to die," said Cerasale.
At the moment, there are no plans to introduce e-mail
legislation that would mirror the do-not-call list, Greisman said.
The main reason that has not happened is because there is little
way to enforce such laws because most spammers operate fraudulently
and outside of the law anyway, she said. Such companies are
unlikely to abide by antispam laws, and companies that do comply
are, most likely, not the ones causing the problem.
Still, the US Congress has asked the Federal Trade Commission to
investigate the spam problem, and the agency plans to issue a
formal request for information from suppliers on possible ways to
control it, Greisman said.
"All lines are open, and all issues are on the table," Cerasale
said.
Jaikumar Vijayan writes for Computerworld