Response Magazine's Ninth Annual State of the Industry Report1 Sep, 2004 By: Response Contributor Response
Members of the magazine's Editorial Board weigh in on self-regulation, the effects of the Web, and the continuing battle for good media time.
Michael Medico, E&M Advertising: These crackdowns are affecting the industry in an extremely positive way in that advertisers, especially those outside the traditional DR arena, can have a greater comfort level knowing the vendors they may select are legitimate. In addition, with the closing down of the illegal business, the direct response industry gains in stature.
“Consumers are more willing to buy via the Internet. For our industry to grow and thrive, we need the numbers of consumers who trust buying direct via TV to grow by 15 to 20 percent per year. Currently, this growth rate is nil. ”— Tim Hawthorne, hawthorne direct inc.
Stacey: I think some of the FCC and FTC crackdowns have been overly aggressive. However, they have made marketers more aware of the risks and penalties involved when they step over the line, we are seeing less offending shows and such shows are also being shut down sooner.
Hawthorne: It's not the crackdowns but the lack of crackdowns. Since the Ab Belt settlements last year, there have been just a few significant consent decrees: Coral Calcium, Balance Bracelet and Body Solutions to name a few. But don't we all feel there are still multiple DRTV products on air for months, even years, and wonder how come? Why hasn't the FTC taken action yet? I can only imagine that ERA's Self-Regulation Program will be flooded with complaints.
3. How do you see ERA's Self Regulation Program working? Is the ERA positioned properly to lead on this issue?
Ron Perlstein, Infoworx: I applaud ERA in its self-regulation efforts and feel that government affairs is the most important role that trade associations like ERA play.
“The challenge for DR will be the same for the general advertising community and that it has to come up with products, service and creative that get people to want to view the message. ”— Michael Medico, E&M Advertising
Larry Moulton, Moulton Logistics Management: I understand there are no guarantees if the ERA accepts the product that the FTC will agree. The marketer could be out time and money for an opinion and still get closed down. This potentially could become one more layer of burden for the marketer from the association he's already paying dues to.
Weisbarth: I am hopeful but it really is a difficult mission to police your own membership.
“Our experience in the U.K. is that consumers are much more discerning than they were several years ago. ”— Digby Orsmond, ARM Direct Ltd.
Hawthorne: It will work well, and yes, ERA is ready to lead it. It's been 14 years in the making and a significant accomplishment by the current ERA administration and membership to pull this off. Sure, there will be lots of groans, complaints and lawsuits, but I believe the net result will be marketers much more hesitant to launch DRTV campaigns with marginal claims.
4. Last year the Direct Marketing Association (DMA) made a strong pitch to reach out to the DR industry but seemed to fall short. What do you believe an industry association, be it ERA or another association looking to become involved in this industry, must do to more efficiently benefit the majority of companies working in the industry?
Perlstein: The idea of trade associations competing against one another for new members seems out of balance. We are members of both organizations and feel they each bring different strengths to the table. For instance, DMA represents outbound telemarketers who may have a different agenda when it comes to government regulations. We would like to see more cooperation between the organizations and teamwork on issues that impact all direct markets.
“Media prices are continuing to rise. This rise in rates will limit the type of product marketers are able to generate a profitable ROI from in TV sales.” — Joyce Cusack, CPO Direct
Medico: In order for any organization to effectively serve its members it must be considered truly independent. If the perception exists that a trade organization exists to benefit a few companies or its focus is on only one segment of the industry, it can never gain the major support it needs.
Moulton: It's unique in the DRTV business having ERA as our only association. Assuming they're doing the job, it keeps our sales expenses down by limiting the number of shows, boards, etc. Competition is healthy but here's one time it may not serve us well — somewhat like when Response was the only DR magazine.