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Direct Marketers Will Try New Approaches

The direct-marketing industry, which sold about $528 billion worth of goods and services through the mail last year, is worried it may face a crisis resulting from the nationwide increase in cases of people being exposed to anthrax through letters.

Though the chances of contracting anthrax through the mail are infinitesimal, consumers and businesses are growing increasingly concerned about unfamiliar letters and packages - a particular problem for direct marketers that often mask their identities to prevent recipients from dismissing a pitch out of hand as junk mail. Those fears, unfounded or otherwise, threaten to hobble the industry, whose fortunes rise and fall with the response to the rivers of mail that flow daily into the nation's mailboxes.

"The hardest thing we have to do as direct marketers is getting someone to open the envelope," said Howard Draft, chairman and chief executive at Draft Worldwide in Chicago, the largest direct marketing agency.

"Until this passes, I think we'll have somewhat of a lowering in response rates clients will see," he added. Draft is a division of the Partnership unit of the Interpublic Group of Companies.

The difficulties generated by the anxieties over mystery mail are likely to make a challenging period even tougher for the industry, which was already grappling with an economic slowdown at its most important time of the year, the start of the holiday shopping season.

"The last time I talked to the mail people, they told me Sept. 11 had really cut into their response rates," particularly for credit card solicitations and magazine subscription renewals, said Robert J. Coen, the longtime predictor of advertising spending, who is senior vice president and forecasting director at Universal McCann in New York, part of the McCann-Erickson World Group division of Interpublic.

"And this may carry over into 2002," he added. "A lot of marketers are going to be worried." Mr. Coen had estimated that marketers would spend $46.6 billion on advertising mail this year, compared with $44.6 billion in 2000.

"We're going to have to be creative in finding ways to give consumers the confidence that they don't have to be concerned" about opening their mail, said Carla Hendra, president for the North American operations of another large direct marketing agency, OgilvyOne Worldwide, part of the Ogilvy & Mather Worldwide division of the WPP Group.

"It's the same as putting yourself on an airplane," she added. "It's necessary to reconsider every aspect of that."

Indeed, the Direct Marketing Association, the industry trade organization, began yesterday to distribute - through e-mail messages - wide- ranging guidelines to its 5,000 member companies, suggesting responses to security issues.

The 13 suggestions include advice to "avoid using plain envelopes," to "use a clear and identifiable return address" and to "temporarily consider briefly delaying" mailings to businesses "because of potential logjams in receiving mailrooms."

"While there doesn't appear to be a widespread campaign to disperse anthrax through the mail," said H. Robert Wientzen, president and chief executive at the association in New York, "clearly we are concerned about what appears to be overreaction and the impact it could have."

"The panic is inappropriate," he added, "but we still are likely to see a temporary" effect on the response rates to direct-mail appeals.

The guidelines were developed by the association after discussions with representatives of the Postal Service and consultants on security and biohazards, Mr. Wientzen said, adding that many were based on "common sense, but are worth reminding people."

Among them: consider notifying recipients by telephone or e-mail message that the mail is being sent,; print a toll-free telephone number or Web site address on envelopes as a reassurance; and add more elements of personalization so mail will seem less odd or unusual.

Companies that send advertising mail "have to be concerned about things they've historically done," said Larry Kimmel, chairman and chief executive at Grey Direct in New York, a large direct marketing agency that is part of the Grey Global Group.

"Envelopes without logos have classically increased `open' rates tremendously," Mr. Kimmel said, because people are eager to learn the identity of the senders of such mailings, known as blind-outers. "But you can't do that anymore or now they will be discarded."

Another ploy now likely to be problematic, he added, are "fat letters, which do incredibly well," meaning envelopes containing additional inducements besides letters like trinkets, gifts and other premiums.

At Time Inc., the giant magazine publishing house that is part of AOL Time Warner, reassessment of its billions of pieces of mail is already under way.

"We're not going to stop mailing," said Jeremy Koch, senior vice president for consumer marketing at Time Inc. in New York, "but we're looking at all of our packages with a critical eye."

"The question is, `Is this a package, if I were nervous, I might hesitate to open?' " he added. "

"Blind-outers are pretty harmless looking," he added, "but now it may be something that makes a recipient a little bit nervous."

So, too, may envelopes containing small, unsolicited gifts like refrigerator magnets, Mr. Koch said, especially "if they say `Do not bend, merchandise inside.' "'

"Once upon a time, it was an innocent device," he added. "But current concerns about the mail may change this."

The worries over direct mail may stimulate growth for alternatives like e-mail messages sent to consumers who provide their e-mail addresses, known as permission-based e-mail marketing, and direct response television, the program- length commercials known as infomercials, which typically involves sending mail to only those consumers who requested it.

"We're looking to migrate some customer communications from direct mail to e-mail," said Mr. Kimmel of Grey Direct, "which can cost as little as half a cent to deliver."

"E-mail is a good solution, but it's not a be-all and end-all," he added. "A poorly crafted permission-based e-mail program could have large opt- out rates," referring to the number of recipients who ask to be removed from e-mail mailing lists.

As for infomercials, "it's too early to tell" whether interest among marketers will increase, said Hugh Allspaugh, senior vice president for client services at Tyee Euro RSCG in Portland, Ore., an agency specializing in program-length commercials that is part of the Euro RSCG Worldwide division of Havas Advertising.

"One thing's for sure," he added, "people are watching more television" - presumably to learn more about the safety of mail.


Stuart Elliott, The New York Times. October 16, 2001

Copyright © 2001 The New York Times Company. All rights reserved.