DIRECT MARKETING UNDER SIEGE

DMA Conference Cites Plummeting Revenues, Anthrax Chaos

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See Full Coverage: ANTHRAX AND THE MARKETING BUSINESS

CHICAGO (AdAge.com) -- Former President George Bush delivered the keynote address today at the Direct Marketing Association's 84th annual conference in Chicago, telling attendees they must feel as if they were in "uncharted waters."

Opening the day's events was DMA President H. Robert Wientzen. While Messrs. Bush and Wientzen spoke optimistically about the industry as well as the country's economic future, the impact of the recent events could not be ignored.

$42 billion loss
Mr. Wientzen told attendees that since Sept. 11, direct marketing ad projections for 2001 dropped $2 billion and direct sales estimates fell 2.4%, representing a $42 billion loss in revenue for the industry.

The bulk of his remarks, however, focused on the future. He spoke about the promise of digital marketing -- not only the Web, which 49% of DMA members said was a profitable channel, but also e-mail marketing, interactive TV and the importance of online and offline convergence.

Mr. Wientzen also spoke at length about the U.S. Postal Service, a longtime DMA partner that was on the minds of most of the attendees. The Postal Service's already dire financial straits, closing its most recent fiscal year with a $1.65 billion loss -- its second-worst in its 226-year history -- have been exacerbated by the current anthrax crisis, Mr. Wientzen said.

Postal Service is 'hemorrhaging'
"The Postal Service was bleeding," Mr. Wientzen said. "Now, I'm afraid, it's hemorrhaging."

Mail volume is down 5% since the Postal Service began its new fiscal year Sept. 8, he said, adding that it stands to lose $3.5 billion this year if that trend holds.

On a more positive note, Mr. Wientzen cited a recent DMA study that found that 92% of DMA members had no intention of changing any marketing plans due to current events.

"The impact of the anthrax crisis on our business so far has been negligible," said Mr. Wientzen, who urged marketers to be respectful of consumers' concerns. "Americans want sincerity, honesty and, above all, confidence that their trust is well-placed."

Mr. Bush echoed Mr. Wientzen's optimism, and his conversational style and sense of humor put the audience at ease.

"Can you think of anyone who receives more direct mail than the president of the U.S.?" he asked.

The silver fox
Although admittedly not Web-savvy, the former president told attendees -- many of whom contributed to the $582 billion in direct sales generated this year -- that his wife, Barbara, whom he called "the silver fox," has a "black belt in shopping."

In reference to current events and the uncertain landscape in which the industry finds itself, Mr. Bush said, "Many of you, I know, must feel as though you're in uncharted waters."

But, Mr. Bush suggested, "the best defense we all have in this new day and age is some good old-fashioned common sense."

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