Direct Marketers Fight Privacy Concerns in Washington

$1 million plus budget set aside

Direct marketers are planning a broad campaign to defend their multibillion-dollar business against attacks by privacy advocates and others in Washington that propose to restrict data mining both online and offline.

The campaign, called the Data-Driven Marketing Institute, was announced today during the Direct Marketing Association's opening keynote address at its annual conference in Las Vegas.

A million dollars or more will be devoted to the effort, which will include advocacy tactics, consumer education and research to "set the record straight and correct the mischaracterizations of what marketers do, whether online or offline," said Linda Woolley, acting CEO and president of the DMA, during a press conference.

Billions are at stake. Spending on direct marketing, which uses consumer data lists, continues to grow at a healthy 5 percent clip, accounting for more than $163 billion last year, or half of the total advertising spending in the U.S. Digital channels are a big part of that growth, making up nearly 20 percent of the total.

But that growth could be chilled if the government adopts what Woolley called "needless regulation or enforcement."

Since March, when the Federal Trade Commission called out data brokers as companies that "buy, compile and sell a wealth of highly personal information about consumers but never interact directly with them," they have become the privacy bogeyman.

The perception of the business practice as "creepy" has been fueled by a number of high-profile articles in the press, such as one about Acxiom in The New York Times that portrayed the company as the "faceless organization that knows everything about you."

Congressional privacy leaders in both the House and the Senate have also jumped on board, launching investigations by dashing off letters to a number of data brokers about companies' data collection practices and policies.

"There seems to be a lot of fear mongering that is inaccurate," said Woolley. "I defy you to show me what harms have come from direct marketing. People would be marching on Congress if there was."

One of the first things the campaign has done is post a video showing how consumers expect, want and benefit from their personal information being used to target them with marketing messages.

"We wanted the video to show the ways consumers are delighted by the use of their personal information day in and day out. It's something they expect and want. It's ingrained in their lives," said Woolley, who expects the research the group plans to conduct will show consumers are happy with targeted marketing and "know exactly what the tradeoffs are."

Woolley acknowledged that privacy is a legitimate concern but dismissed the inference that companies would replicate the infamous Target example of marketing to a teenaged pregnant girl. "If you've got a brand to protect, you don't want to be in that creepy zone," she said. "When a marketer crosses the line, it sends a message to the rest of the community, and the marketplace corrects for that instantly. It's self-correcting."

Privacy advocates are skeptical that a $1 million campaign can change the debate. "The DMA's problem is that their business is about big data. Everyone is paying attention to what their members do. The Acxcioms and Experians are becoming known for violating privacy," said Jeff Chester, the Center for Digital Democracy's executive director. "What they really need to do is look closely at the practices of their members and rewrite some guidelines. They're in denial."

The DMA launched its initiative none too soon. On the same day the trade group announced the DDMI, the FTC announced it would host a workshop Dec. 6 to "explore the practices and privacy implications of comprehensive collection of data about consumers' online activities."