DIRECT MARKETING TACKLES BENEFITS OF NEW MEDIA;DMA'S NEW CHIEF REMINDS HIS INDUSTRY TO KEEP FOCUS ON THE CUSTOMER

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[new orleans] Direct marketing executives heard last week that about 58% of all U.S. ad expenditures now are spent in direct-response formats.

And, both consumer and business-to-business direct, if they grow consistently at projected rates, will double to $2 trillion in U.S. sales by 2003, according to the Direct Marketing Association's 1996 industry study, highlighted at the group's convention here.

In his outgoing speech to the 12,000 conferees, retiring DMA Chairman-CEO Jonah Gitlitz expressed optimism about new media's ability to grow the business, and also concern about the public's perception of privacy risks in the info-driven economy.

Bob Wientzen, the new chairman-CEO, seconded Mr. Gitlitz's parting thoughts.

`MAINTAIN A VOICE'

"We must maintain a voice in the global marketplace," Mr. Wientzen said, and "aggressively support all efforts that encourage new technology applications."

However, he added that the industry needs to think more about what customers want, rather than what the product wants to offer them.

In the realm of new media, online applications for trackable and non-intrusive direct mail techniques were introduced. One was Acxiom Preferred Mail, jointly produced by Acxiom Corp. and IBM Corp. with privacy in mind and designed to calm both consumer and marketer. It allows a marketer to target and measure the mail recipient's activities, and also protects the addressee's privacy and e-mail address.

Synergies between direct mail and direct response techniques also were a hot topic, as were synergies between promotion and regular direct marketing and catalog/retail cooperation.

BULLISH ON CATALOGS

Among catalog marketers, William End, former president-CEO of Lands' End, said he's bullish on the industry but catalogers need to work harder on getting their fair share of the retail market.

Last year, catalog sales accounted for 3.7%, or $86 billion, of the $2.35 trillion in retail sales.

Mr. End, now managing partner at consultancy International Cornerstone Group, said catalogs need to develop their own branded merchandise, consider acquisitions and partnerships, and outsource capabilities they don't have to build muscle at a time when retail stores are increasingly price-driven and in-store service is declining in quality.

Other catalog industry executives suggested ways that retail stores and catalogs could cooperate. Susan McIntyre, president of McIntyre Direct, Portland, Ore., said adding a new sales channel almost always benefits a company so cannibalization should not be a fear.

For small stores, she said, a national catalog launch is an opportunity for a major brand repositioning.

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