What would you do without self-regulation?

I've just been reading the annual report of the body, ASBOF that funds both the ASA's regulation of direct mail and provides the lion's share of the money to run MPS.  

To cut to the quick the words of the chairman, Winston Fletcher, don't dance around the issue. Revenues to fund these important pillars of self regulation have dropped by nearly a third in two years and the trajectory seems to be continuing. I know that this has been said before (by me in another publication) but that was 18 months ago when we we're merely looking down the slope. It's nice, in a way, to know that I wasn't crying wolf but it gives little lasting satisfaction.

This decline has been caused by a number of factors. Deregulation of postal services has brought competition, improved services and in many cases improved prices. However at that point of change, almost certainly unwittingly, brand owners (via both marketing and procurement) haven't ensured that the important small financial contribution to self regulation sitting at the bottom of every mailsort invoice was paid in the new supply arrangement. In my mind it's as important to a brand as a robust environmental and ethical policy. It's about a small fraction of expenditure now helping to protect our future ability to communicate. We're now riding down the slope at high speed in an environment where these shifts in the postal market have been exacerbated by the drop in direct mail spend. In my mind it's almost certain that the current financial trajectory will cause a partial collapse of the system.

Two questions come to the front of my mind. What would direct marketing clients and the data industry do if the voluntary levy system couldn't support the ASA's and MPS's needs? More importantly what would the government do?

First off we'd be in big trouble. An under funded MPS simply couldn't meet the consumer expectation of the universal free supression service that is a bulwark of self regulation. This could easily cause the second question coming to the fore. Government may well intervene to regulate if the industry doesn't, can't or won't. And government regulation tends to be more expensive, more bureaucratic, less controlable and frankly a blunter tool.

So what should we do? 

Engage, either directly with ASBOF or via ISBA, DMA or ask your agency to talk to the  IPA. All the major marketing trade bodies can help to ensure that the case for self regulation is understood from the boardroom to the postroom.If you'd prefer call me or drop me an email and I'll start the wheels rolling.

Do nothing and the future is all too clear.

Charles Ping is Commercial Director of AI Data Intelligence and a director of ASBOF representing the DMA

Which way for Royal Mail?

It would be a brave of the government to force through the generally unpopular part privatisation of Royal Mail. It wouldn't exactly be a morale or confidence building move in the current climate. However whatever the recent profitabilty of the company it all looks miniscule compared to the pension hole that sits behind the company (as Lord Mandelson has pointed out). Buying into a company with a £6-12 billion pension deficit would be a brave move with current profits.

And any suitors from within the mail sector will also be feeling the cold wind that has blown through the direct mail world over the past 9 months. Volumes are down and many are suffering.  Despite the undoubted ability of Lord Mandelson to create the future that he seeks it's difficult to see a deal that would give equal weight to the needs of all stakeholders; Mailers, employess and shareholders. It would be a tragedy if the market lost diversity but equally employees who have worked all their lives for pension entitlements need to have their expectations met.

Why Michael O'Leary is right (this once)

It's not often that I agree with Michael O'Leary but in a recent Sunday Times article on the economic gloom in Ireland (yes folks, it's worse than here) he is quoted as saying:

"This recession is fantastic. After 10 years of lunacy in this country it's absolutely necessary. Now we can start again and do things properly. There's never been more opportunity. Interest rates have never been lower. Oil is cheap. There's no pressure on wages. This is the time when good businesses start up, grow up and gear up for the next 5 or 6 years of growth."

Whilst some aspects of his words might grate the truth is that a recession can indeed be a fertile time. The sainted Warren Buffet phrased it well when he said "Be fearful when others are greedy. Be greedy when others are fearful". But then again he's had a bit of a haircut recently.

The challenge is to know which businesses will prosper and which sectors will grow. In the world of DM this can translate in to businesses that use DM or businesses that propser from supplying services. Rememeber, what we now know as Proximity, but was then Barraclough Hall Woolston Gray, was founded in 1991. At the same time that Norman Lamont claimed to see "green shoots of recovery". Lamont might have been misguided and didn't last the course but Simon Hall et al clearly weren't.

The Big Job

A few weeks ago I noticed an ad in the Sunday Times for a new Information Commissioner. All those rules about standards in public life mean that jobs like these must be advertised for a fair selection process to take place - no room for a tap on the shoulder in the golf club anymore.This has led me to wonder about the balance of skills required for this job. My list got as far as: ·         Independence of affiliation to any lobbying area·         Exposure to public policy making processes·         Leadership (of course)·         Advocacy and communication My list interestingly doesn't actually mention data, either from a marketing, security or public perspective. What have I forgotten?  I suspect that the future holder of this role will have to spend less time arguing about Identity Cards. A cash strapped future for public finances now appears to be the theme for 2009 and 2010 and would seem to suggest that Identity Cards might find them selves kicked into the long grass of public sector projects.

What goes around.....

An interesting aticle on The Register this morning highlights the fact that even a data literate DM'er like myself has to aknowledge the power of brands.

The idea that a sales model driven via an intermediary should be sucessful runs counter to much of the fashionable thinking over the past decade. Remember the word disintermediation? Yes, Not heard that one since the days of phrases like "clicks not bricks" and the idea that every supermarket would close down and be replaced by a delivery service.  It's not happened has it.  The reality is that whatever the business model a strong brand is the differentiator. Comparison web sites have been with us for some years but how many of us pick the absolute cheapest and how many the cheapest of the brands that we've heard of and of which we have some residual positive feeling?  Direct communication always works better on a bedrock of of a brand. It's an element of the mix frequently forgotten in the data world and measuring the effect of a brand on response is far from simple, but very worthwhile.

When does targeting become intrusive?

This is a question that has vexed marketers for many years.

I remember years ago working with a mail order company with full CTI integration (when it was something new) who had tried answering the phone to a repeat purchasers with “Hello Mr Smith, how can we help you today”. They stopped doing this for two reasons. Firstly many customers were spooked by this level of “big brother” knowledge and secondly the ensuing explanation actually wasted time, and in a contact centre time can mean money.  The consumer calling never questioned the targeting of the offer specifically to them, based on detailed RFV and other segmentation. They questioned the in your face application of the data.

The recent Phorm controversy is just this argument moving forward. I’d hope that all Marketing Direct and most BR readers are up to speed on this latest manifestation of data usage but you can get a fair summary on wikipedia (with the usual Tim Berners-Lee disclaimer about the web). In reality there are always two sides to these arguments and with privacy issues they tend to become polarised. However the success or failure of the implementation is whether it gives the consumer a better online experience or worse one. Given that no consumers really like online advertising then making it more relevant seems entirely sensible. That is as long as it doesn’t make some “mickey mouse” beginners mistakes. As an example the computer in our study at home is likely to have my wife or myself surfing. Our online habits are very different (no no, not that way!) but if my 17 year old son happens to use it because he’s too idle to go upstairs to his room then it becomes even more difficult for any behavioural targeting to keep pace. The light touch that was used by the mail order call centre many years ago, ignoring some of the attributes of the CTI integration, still teaches us lessons.

The heart of the matter

As a first post I suppose I better record the background of the blog title. It's Mark Twain: "Many a small thing has been made large by the right kind of advertising". From this point on we'll forget that sort of thing and concentrate on issues closer to DM.

Data (or at least the loss of memory sticks) is thankfully taking a back seat in the news to the recent financial turmoil.
However the management of data isn't far behind the issues. Aside from "spivs", securitisation and the role that it has played in the problems it is the failure of businesses to apply correct understanding of both customers and prospects is at the heart of the matter. Lack of analysis, lack of diligance, lack of data all play their part. It might just be that when we come through this malaise that marketing data and risk data might be really used together to find help make the best decisions. Maybe the teenage scribblers, (to use Nigel Lawson's phrase) will learn something of the value of the data industry. I certainly hope so.