Direct Response Marketing

Sour Grapes or Salient Points? How Perception Drives Reality

1 Jan, 2006 By: Thomas Haire Response

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In speaking recently with Venable attorney and Electronic Retailing Association (ERA) chairman Jeff Knowles (see Q&A, "For this issue" ), the longtime industry stalwart brought to my attention that the association, which has been around in some shape or form since 1990, had never been sued before Kevin Trudeau brought his defamation action last fall. However, news came in early December that not only will the ERA have Trudeau's suit to contend with in the coming months, but now the association must deal with a second legal action — this one brought in December by Boston-based ITVDirect and its leader, Donald Barrett.

Thomas Haire

Without getting into the merits of each suit (I'm sure Trudeau, Barrett and the ERA hierarchy have different takes on those), what should those who work in the direct response market make of this sudden flurry of legal action between big-dollar marketers and the main association that represents and oversees the DR industry? Are these suits merely a case of sour grapes by marketers who have been targeted by the Federal Trade Commission (FTC) and perhaps feel let down by ERA? Or does each action point out clear chinks in the association's armor?

As is often the case in such situations, the answer likely lies somewhere in the middle. Certainly, Trudeau and Barrett have each made their share of negative headlines over the years — rightly or wrongly — when it comes to marketing products via DR. They and their products and companies have been targeted by the FTC, and with the ERA's recent focus on self-regulation, neither of them is going to win any popularity contests within the organization.

But while Trudeau has never been an ERA member (though many of the service providers who have aided the marketing and dissemination of his products are association members), Barrett was a member in good standing until being expelled last summer by the association during a self-regulatory review of his ads for SeaVegg. Yet, both seem to wonder similar things in their legal actions — why does it appear that certain ERA members are able to avoid FTC investigation while non-members and those not in the association's "inner circle" don't seem to benefit from similar luck?

While the internal leadership of ERA would have you believe such a question is ridiculous and even offensive to ask, others seem to recognize the harm that just a perception of this nature could cause the association's image and strength in our burgeoning industry. It only takes one loud, angry voice (let alone two) questioning the internal workings of an organization to change perceptions.

In recent years, with its work on the self-regulation program and its initiatives to expand the scope of the DR market, the ERA has clearly improved on its past image as an "old boys' network." So, while it would clearly be a shame for the association and the industry if the accusations brought by Trudeau and Barrett were found valid in any way, it should be a huge concern to the association's leadership — whether the internal staff or the external board members — that, at this point, the dialogue is being shaped by its accusers.

Perception can become the imagined reality very quickly in this day and age. To win a war like this, one must first take charge in the battle to maintain its control.

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