DMA Prez Sees Bright Side of Tough Economy

John Greco Says Companies Can Get More Bang for Buck With Direct Marketing

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NEW YORK (AdAge.com) -- When the Direct Marketing Association kicks off its annual fall conference today in Las Vegas, it will do so under a cloud of economic uncertainty. This will be John Greco's fifth show as president and CEO of the DMA, and he knows the economic crisis, along with the election, will be the current beneath every conversation, session and keynote speech in the next three days.
DMA president and CEO John Greco
DMA president and CEO John Greco

And he's fine with that. In his eyes, it will give marketers in attendance the chance to see the value and return on investment direct marketing can deliver in a time of tightening budgets and diminished consumer spending. The need for more customer data and cheaper ways of reaching targets have put some direct-marketing disciplines such as customer-relationship management and e-mail marketing in high demand, resulting in a bigger piece of the marketing pie for the direct industry. "It's probably impossible today to find an example of a company that is not using direct marketing in their mix right now," Mr. Greco said.

The theme of this year's show is "R U Connected?" Mr. Greco said 550 companies will be present, and 20% of attendees will come from foreign countries. He would not disclose estimated attendance numbers, but a DMA spokesperson said attendance will be higher than last year.

Mr. Greco took some time to talk with Ad Age before leaving for the show.

Ad Age: What's your take on the state of the industry?

Mr. Greco: Like everyone else, we are thinking of the economy and where we fit into it. We are predicting growth over last year and the year before but at a modest level. Obviously we are concerned about the direction it's taking, but we are guardedly optimistic, because the bottom line here is that all of the things that we talk about in terms of the power of direct -- relevance, responsibility and results -- are more valuable now than ever.

Ad Age: What are you hearing from agencies about the conversations they are having with clients?

Mr. Greco: Agencies are telling us that when it comes to the role of planning, strategy and research that it's not business as usual and that companies across the board are looking to revisit their marketing strategies, ad budgets and marketing mix.

Ad Age: What are you hearing from marketers about their interest in direct?

Mr. Greco: Overall they want to understand the effectiveness of all the channels and be sure they have an integrated marketing mix. They are starting to realize that it's about understanding the mix of channels, how they interplay in various circumstances and how to best utilize all the channels from traditional direct mail to mobile marketing and everything in between. We see direct channels represent over 50% of the overall advertising spend right now, so they are using it more.

Ad Age: What impact has the current economic situation had on the marketing world in your opinion?

Mr. Greco: From a marketing perspective, budgets are being scrutinized that much more carefully. As in any situation when the amount of pressure that is currently on all of the companies that participate in the economy, they are making sure that every single marketing dollar has a positive return on investment. There will be a lot of attention paid to channel selection and channel mix, more so than ever.

Ad Age: Do you think the industry is more recession-proof than others?

Mr. Greco: I believe it is absolutely not recession-proof. I talk about direct marketing as being a process that cuts across all vertical industries, so on the marketer side, those who use direct marketing as part of their mix, if anything, I would expect them to be looking to use it more aggressively. The agencies working with the marketers in the planning phase or the entire supply chain are absolutely feeling the impact of this, there is no question about it.

Ad Age: With the growing interest in accountability, do you think the industry should be doing better or are you happy with the role direct is playing?

Mr. Greco: I will be the first person to always say I believe in continuous improvement, so we are never ever satisfied with where we are and always want to do better. Having said that, I think we should be proud of what we're doing in terms of the kinds of returns we're able to produce for marketers.

Ad Age: There's obviously a greater demand for consumer information in today's world and a lot more ways for marketers to attain that information. What are your thoughts on the state of the privacy issue?

Mr. Greco: We have long been a proponent of self-regulation, and we are working with the marketing community to demonstrate that self-regulation through adhering to our guidelines works. We're working closely with other associations and marketers to make sure that we're developing the best self-regulatory regime and striking the right balance. We also believe that self- regulation can really stay on top of technology changes faster than regulatory bodies can. We think the DMA and its members are really uniquely positioned to ensure that privacy objectives of consumers are met and that there's security of their information and a respect for their choices.

Ad Age: And you're comfortable with the self-regulatory aspect of this?

Mr. Greco: Absolutely. I'm very confident that is the right solution.

Ad Age: Sounds like you have a lot of faith in your members to do the right thing in terms of privacy.

Mr. Greco: We not only have faith in our members, but we also have policies and practices in place to make sure that it's not just our trust and our faith. We have secret shopper programs and two bodies that oversee the ethical-practices arena: the Ethics Policy Committee and the Ethics Operating Committee. There's a serious process put behind this so that there's real substance behind the self-regulatory review.

Ad Age: Do you think direct mail is going to become a lot less significant in the next couple of years?

Mr. Greco: If you look at the total mix of direct-marketing channels, the mail component represents about one-third of it. Even without the financial pressures, the general trend [we are seeing] has been toward a faster growth rate of search-engine, e-mail and web marketing and now mobile platforms. As the internet grows, direct mail comes into play to drive people to the website, so the two go hand in hand. It's about multichannel mix, and the bottom line here is to make sure every channel is used in a more relevant way and that the mix of channels are more relevant.
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