The turbulent year hasn’t made direct marketers barricade their borders completely, but it has made them rethink initiatives to foreign shores.
“Everyone drew back with the recession from thinking about overseas expansion. I’m beginning to see a little bit of pick-up in interest in the last few months as companies refocus their activities,” says Charles Prescott, vice president, international business development and government affairs. “However,” he adds, “international expansion is always viewed as something nice but not necessary. Companies that do focus on those markets view the amount of work that needs to be done as something that can always be postponed and picked up later.”
The increase in postal rates by the USPS and other carriers, combined with “the increasingly appalling level of services” discouraged a lot of companies, even major mailers who have begun to look for alternatives such as other suppliers, media and sources of new names, continues Prescott.
Approximately 15% to 20% of the DMA’s hard goods membership is doing e-commerce internationally, he says, noting there has been “quite a bit of rethinking of business models. Companies that are looking at international work are becoming more focused and more careful.”
To help sharpen that focus, the association will present the results of its first international mailing survey at the end of October. The online poll surveyed postal customers worldwide on topics such as domestic and foreign postal trends, whether customers think service is getting better or worse, and if alternative carriers or media are becoming more of an option for promotion or fulfillment.
Both Prescott and DMA president and CEO H. Robert Wientzen have made several overseas visits this year on behalf of the association, to locales such as Russia, Finland, Brazil, Mexico, London, Brussels, Paris, Madrid, Geneva, Warsaw and Germany. After a slow period, member interest in traveling abroad on trade missions is also reviving, says Prescott.
While the DMA does spend a lot of time educating domestic marketers about the global marketplace, it also spends time filling in the rest of the world on the United States. The anthrax guidelines developed by the DMA were picked up and translated in about 12 different countries, and the association has also done outreach on U.S. e-commerce regulations and do-not-call lists.
To keep DMA members informed, this summer a new e-mail newsletter called “Currents and Crossroads” debuted. Prescott describes it as “an attempt to provide interesting nuggets of information from around the world to raise the curiosity level of doing business outside of your own country.” About 3,500 subscribers receive the publication, which includes sections on small business, Web site reviews and regulatory issues, as well as entertaining features like travel information and restaurant reviews. Information about the newsletter is available online at www.the-dma.org.
One of Prescott’s key responsibilities is keeping abreast of legislative issues around the globe that affect direct marketers. Privacy continues to be the hot issue globally, he says. Despite a great deal of interest from citizens in having regulations in place, a proposed “business friendly” privacy bill in Japan did not pass earlier this year. Prescott characterized the situation as being “mishandled badly” by the Japanese government, especially considering the public outrage to announced government plans to computerize and link all municipal records.
Canada’s Personal Information Privacy and Electronic Documents Act has had significant impact on the industry there. The regulation has made businesses on both sides of the border more aware of the principles of privacy and data protection, and forced U.S. companies that do business in Canada to think about issues they’ll have to deal with when working with other countries, he says.
In Mexico, the DMA is calling on the industry to support the Mexican DMA in lobbying against a proposed Federal Personal Data Protection Law that would cripple direct marketing in that country.
The law, which could be adopted by the Mexican Congress in its fall session, would legislate mandatory opt-in requirements for the use of all personal data by companies for marketing purposes. It would also make it illegal to transfer personal data to other companies for purposes such as list rental, or to send data outside Mexico to the United States.
Prescott notes that if adopted, the law would effectively not only end database construction in Mexico, but the country’s growing 40.7 billion peso ($546 million USD) DM industry and its 139,000 jobs as well. Industry support is crucial, he says, because the Mexican DMA does not have a deep lobbying budget.
“There is a constant battle in country after country of educating the policy makers of what the reality is in business, government and the private sector in the information age,” says Prescott, calling the proposed law “fairly horrible.”
“[There is] a need to build flexibility in the system to let the information age happen,” he continues. “The implications are disastrous for DMA member companies in the U.S. and all companies with operations in Mexico. If a company is developing databases for marketing or for enterprise management, such as human resources, you won’t be able to bring the data to the United States, and what you will be able to do in Mexico will be severely limited.”
Many of the international regulatory issues facing DMers come out of Europe. The Data Protection in Electronic Communications Directive, adopted earlier this year, requires giving current customers the chance to opt-out from faxes and e-mail, and forbids using anything other than opt-in e-mail addresses for prospecting.
Another provision on that directive that caused furor concerned storage requirements for electronic messages. EU member states would require telecoms and ISPs to retain the actual communications and billing records of customers for a period of time; the current debate is for how long. In this situation, issues of national security run head-to-head with European sensitivities about personal information.
This has done something healthy for the privacy debate, says Prescott. It makes people focus on why data protection became so important in European policy making — it was an attempt to control what information governments gathered and what they did with it. Over the years, that focus has instead shifted on how businesses are using information, rather than what consumers lose in opportunities and savings.
According to a recent study, says Prescott, the costs of data protection in Europe raise the cost of consumer credit by two to three percentage points.
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