DMA BUILDS E-PRESENCE VIA 2ND ONLINE PURCHASE: ACQUISITION OF NET ALLIANCE ACKNOWLEDGES 'CONVERGENCE' OF DISCIPLINES

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The direct Marketing Association again affirmed the concept of "convergence" of its namesake specialty with the online realm last week by acquiring the Internet Alliance.

The move marks the second time the DMA has bought an Internet trade organization; last year, it established a foothold in the online marketplace by acquiring the Association for Interactive Media.

"The lines between traditional business and the Internet are fading quickly -- established and successful industries are moving rapidly to coalesce with online innovators," DMA President-CEO H. Robert Wientzen said when the acquisition was announced May 4. "This convergence is propelling the Internet's global success."

The DMA acquired the Washington-based Internet Alliance, a policy research and advocacy group, in an equity swap.

"This is another step in trying to develop a real voice for the Internet industry," Mr. Wientzen told Advertising Age.

MARKETING CLOUT

Mr. Wientzen noted that the combined memberships of the DMA and the two Internet groups bring significant marketing clout to bear in addressing issues such as consumer confidence and trust in the burgeoning online medium.

The DMA has good reason to invest more heavily in Internet-related issues. Of DMA membership surveyed in its 1999 Electronic Media Survey, 90% currently have a Web presence, and more than half of those use their sites for sales and e-commerce.

The DMA currently has 3,684 voting members. The Internet Alliance's 140 members include Bell Atlantic Corp., DLJdirect, eBay and Prodigy Communications Corp. Companies belonging to both groups include America Online, AT&T Corp., IBM Corp., Microsoft Corp. and Netscape Communications Corp.

The Internet Alliance will operate as an independent subsidiary of the DMA, as does the Association for Interactive Media, though the alliance will draw on DMA marketing, public relations and educational resources.

Marc Jacobson, senior VP-corporate development and public policy at Prodigy, was elected chairman of the Internet Alliance the day before the acquisition was announced. He succeeded Bill Burrington, VP-global public policy at AOL. Jeff Richards remains executive director of the alliance.

LOBBYING AND MORE

While the Association for Interactive Media focuses on information dissemination and networking specifically in the e-commerce area, the Internet Alliance has operated as a lobbying group, concentrating on public policy development and advocacy beyond e-commerce. It was founded by online pioneers in 1982 as the Interactive Services Association and reorganized in early 1998 as the Internet Alliance.

The Internet Alliance's objectives will expand beyond lobbying under the DMA.

BUILDING CONFIDENCE

"We want to build the membership and build consumer confidence in the medium both here and abroad," said Mr. Jacobson, citing the example that "people are still reluctant to use credit cards online."

Mr. Wientzen said the expansion of the Internet Alliance will include increasing membership, broadening staff, and strengthening the alliance's administrative and database management systems, as well as an office move to more appropriate space for the expected expansion.

With 1,500 pieces of legislation concerning Internet issues currently in the works on Capitol Hill, expansion of the Internet Alliance could be a crucial step in exerting a measure of control over the destiny of Internet marketing. Coincidentally, on the same day the DMA announced the acquisition of the Internet Alliance, President Clinton proposed legislation to protect, among other things, consumers' financial privacy on the Internet.

"We have a broader interest in the Internet as a whole beyond e-commerce," said the DMA's Mr. Wientzen.

BECOMING CRUCIAL MEDIUM

Alliance Executive Director Richards agreed that overcoming confidence and trust issues is a central mission.

"The confidence and trust issues that are so important to the DMA and the Internet Alliance will become critical worldwide," he said. "We need to make sure that the Internet becomes a crucial consumer mass-market medium in the 21st century."

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