DMA Struggles to Reinvent Itself as Direct Evolves in Digital World

Under New CEO Kimmel, Association Strives to Ramp Up Relevance, Embrace Social-Media Era

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NEW YORK (AdAge.com) -- When walking the exhibit floor of the Direct Marketing Association next week in San Francisco, pay careful attention to the vendors. Odds are the majority of them will be mailers, list providers, printers and letter shops -- not exactly top of the list for Firstborn, Digitas or R/GA.

Which goes to illustrate the conundrum the 93-year-old trade organization is facing: It's smack dab in the hottest space in marketing -- one-to-one communication -- but has struggled to evolve into the new world of direct exemplified by the likes of Twitter, Facebook and Foursquare. "They should be the center of leading-edge technological advancement in direct," one agency head said. "They could be the biggest show around."

Steve Cone, a longtime direct marketer and former CMO of Epsilon, was harsher in his assessment. "The DMA is not a relevant organization for the digital space," he said. "It should be, but it's just not."

For its part, the DMA concedes that it has a ways ago, though it has not lost relevance. Its membership roster, at 2,720, is down 10% from 2008 but the organization cites agency and marketer consolidations as part of the reason for the decline. It notes that influential new members that have come aboard in the last year including Walmart, Target , ESPN and Time Warner Cable.

The organization in two recent years has also operated at a deficit, with expenses exceeding its falling revenue. Total revenue plunged 23% to $30.1 million in the year ended June 2009, according to Ad Age DataCenter's review of DMA's federal tax return. That year, the trade association's expenses exceeded revenue by $4 million. DMA also ran a deficit in the year ended June 2008, when its revenue slipped slightly (down 0.3%).

However, CEO Lawrence Kimmel said "the DMA is financially stable now, and if you were going to project the year out from where we are right now in our fiscal year, which began on July 1, we would be in the black about $2.6 million. The $4 million deficit number is correct but 40% of that was from declines in a pension fund." He claims conferences and events are 10% up and enrollment in its education programs is up 56%.

But there's still a lot of missed opportunity to drive those figures higher. "I wouldn't describe them as forward-thinking, and that's unfortunate," said an executive at a digital agency that's no longer a member of the association. "It's an organization we would totally support if we felt like it was really listening and reflecting the digital space."

Mr. Kimmel, who became the organization's new CEO in July, says he is listening -- intently. Mr. Kimmel maintains that, up until not too long ago, he shared those same feelings about the DMA.

"I came in here and wondered like others in the community about the progressiveness and enthusiasm of the DMA," he said. "It hasn't been doing enough to remain on the cutting edge."

As a start to rectifying this, at this year's annual show beginning Oct. 9, Mr. Kimmel will be issuing a call-to-arms for the industry, asking for its help in "redefining and championing a new understanding of direct marketing." His plea will unveil several new branding and educational initiatives intended to illustrate the DMA's "progressive" activities around social, digital and mobile marketing. Mr. Kimmel will also announce the launch of a new DMA website newdma.org with an "American Idol"-type contest called the "Social-Media Face-Off" in which attendees will vote on the best social-media campaign presented by six industry thought leaders.

It's all part of the DMA's concerted effort to meet the needs of digital shops going forward. Mr. Kimmel said digital, mobile and socially themed sessions will have a greater presence at this year's annual show than ever before.

But one thing that won't change -- to the frustration of some -- is the organization's name. "We are starting with working as a community to change the understanding and definition of the discipline," Mr. Kimmel said. "The name of an organization is secondary to the understanding of the discipline."

"The words 'direct marketing' carry a lot of baggage," said an executive at one of the world's biggest direct agencies. "It's hard to bring a new generation of talent and vendors, because social and digital media is the passion of these young kids and companies, and they don't want the baggage that comes with direct marketing."

The DMA has tried to break away from its image before by bringing in e-mail marketing, social and direct TV, "but it has never successfully broken away from that stereotype of just being about direct mail," said an executive at one of the world's biggest direct agencies.

But it seems to stand a shot with Mr. Kimmel, who is the only agency CEO to hold the chief executive role at DMA; he is the former chairman-CEO of Grey Direct Global Network and as such has a closer view of what agencies playing in the digital world require.

"For 93 years, we have been successful in supporting the direct-mail community, so that defines, in many people's minds, the brand," Mr. Kimmel said. "But that's not really the brand anymore. This organization was too slow to integrate, but we are getting better, and we are proud of where we are and where we will be going."

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