DMA in DC 2011 Takes Members from Issues to Action

March 21, 2011 — As reported in Direct from Washington, on March 15 and 16, DMA hosted its annual policy conference, DMA in DC 2011. Members from across the country joined DMA staff and a stellar line-up of expert panelists for a day-long issues briefing before heading to Capitol Hill to advocate on the issues that matter most to their businesses.

The March 15 issue briefing began with the DMA Government Affairs team describing the current “state of play” in Washington and across the States on issues ranging from postal reform to digital privacy, use taxes to affiliate nexus, and “Do Not Mail” to “Do Not Track.”

During the second panel of the morning, attendees heard updates on the global consumer privacy debate from Ambassador Philip Verveer, Deputy Assistant Secretary of State & U.S. Coordinator for International Communications & Information Policy; David Vladeck, Director of the Federal Trade Commission’s Bureau of Consumer Protection; and Daniel Weitzner, Associate Administrator for Policy at the Commerce Department’s National Telecommunications and Information Administration. All three agreed that privacy regulation does not come without costs. Ambassador Verveer emphasized that any privacy regime must be balanced against the growth of ecommerce. Mr. Weitzner said that the American model for privacy protection helped foster ecommerce growth and that America does not want to lose that advantage. Director Vladeck discussed the new privacy icon concerning tracking of web surfing that DMA and the Digital Advertising Associates created and the newly announced browser privacy tools. He encouraged DMA to work with the browser community to create compatible privacy tools.

The “Sales Tax ‘Face-Off’” included a lively discussion over whether and under what circumstances remote sellers should be obligated to collect sales taxes on purchases made by customers in states where the remote seller does not have a physical presence. Scott Peterson, Executive Director of the Streamlined Sales Tax Governing Board, made the case that the economy has changed since the Supreme Court’s 1992 decision in Quill vs. North Dakota requiring the physical presence standard and that the Quill standard should be abandoned in favor of a more equitable treatment of like transactions despite the seller’s presence or not in the state. He also noted that his members, states, were unlikely to give up unilaterally the sovereignty required to bring any significant efficiency to the taxing of remote sales. George Isaacson, DMA’s long time tax counsel and a partner at the law firm of Brann & Isaacson, defended the precedent in Quill and discussed how the streamlined sales tax project has seemingly achieved little in the way of streamlining the nation’s 7,500 taxing jurisdictions and the complexities and peculiarities found within them. Kelly Cobb, Government Affairs Manager at Americans for Tax Freedom, brought additional perspective to the issue framing the debate in the context of states pursuing legally questionable legislation and the need to have a unified national solution to the question. The discussion amongst the panelists highlighted the many aspects, concerns and challenges associated with states conscripting companies located solely out of state to collect and remit sales taxes.

The first afternoon panel involved a discussion of the merger of digital and print communications. Ron Myers, Director of Multichannel Marketing at Quad Graphics, explained how Quad is using digital printing and information to print individually customized mailing pieces. This significantly increases the response to the advertisements. He provided statistics that Americans of all ages still read and respond to mail. Ashley Lyons, Government Affairs Manager for Pitney-Bowes described the new Volly service offered by Pitney. The service utilizes consumer preferences in which channel (digital or print) the consumer wishes to receive information. John Payne, CEO of Zumbox, outlined the Zumbox model wherein consumers will have a digital mailbox associated with their postal address. Consumers will receive transactional and financial information via the digital mailbox, but the notices will look like physical mail envelopes. All three of the digital/mail services require consumer information which emphasizes the need for non commerce restrictive privacy regulation.

Stu Ingis of Venable and Daniel Castro of the Information Technology and Innovation Foundation outlined the ins and outs of “Do Not Track” proposals during an afternoon panel entitled “’Do Not Track’ Or ‘Do Not Innovate’? Policy Guardrails for Emerging Technologies.” Castro highlighted the significant economic benefits of online behavioral advertising, noting that the Internet economy accounted for $300 billion – 2% of the national GDP – in 2010, with Internet advertising alone reaching $25 billion. He also pointed out that advertisers can derive three times the revenue from interest-based ads, which have been shown to be up to 600 times more effective than less targeted advertising. Ingis alluded to the Senate Commerce hearing on privacy scheduled for the following day (March 16), calling it “Opening Day” for the privacy debate in the 112^th Congress. While we may not get to a “World Series” (i.e., final legislation), Ingis noted, the debate will focus on what the standards for online privacy should be, and who should set those standards – industry or the federal government.

Attendees learned about “Accountability in Online Behavioral Advertising: How DMA Enforcement Works” from Senny Boone, DMA’s SVP Corporate & Social Responsibility, and Scott Meyer of Evidon. Boone outlined DMA’s participation in the industry-wide coalition that established principles for online behavioral advertising best practices and outlined how those principles have been built into DMA’s own Guidelines for Ethical Business Practice (with which all DMA members are required to comply). DMA’s extensive self-policing of complaints and case-handling process was summarized, showing how a complaint is handled and how DMA holds both members and non-members accountable. The complaints for OBA will be handled through the complaints process by the DMA’s Ethics Operating Committee, comprised of marketing practitioners following DMA guidelines. DMA will be partnering in this process with Evidon, the company that was selected to provide compliance monitoring services to the DMA and the BBB to assist the organizations with OBA enforcement. Meyer then outlined his company’s products and services which will provide, among other things, the Ghostery panel of users as a data source allowing the DMA to know how broadly the OBA standards are being adopted by the online marketing community. Meyer provided several useful examples of how marketers are demonstrating their compliance and offering the consumer choices about online ads. In light of earlier panels highlighting the urgency of regulators looking to adopt severe “Do Not Track” standards, both speakers stressed the importance of companies actively participating in the Self-Regulatory Program through use of the Advertising Option Icon and Consumer Opt-Out Page. Companies are encouraged to visit www.AboutAds.info in order to learn more.

Fruzsina Harsanyi, Senior Advisor at the Public Affairs Council, spoke to attendees about “How Washignton Really Works: Politics, Policy and Procedure.” Her presentation focused on familiarizing attendees with the role of lobbying and advocacy in supporting an organization’s strategic interests. She made the case that lobbying and advocacy have an essential role in the development of sound public policy and that every organization has a responsibility to influence the policy environment in which it conducts business.

Following the issue briefing, attendees also enjoyed a keynote address by Senator Mark Pryor (D-AR) over dinner. Senator Pryor spoke about the issues facing the country, focusing on Congress’ current budget negotiations and the need to significantly reduce the national deficit. He discussed the importance of improving our economy, noting the need for growth in the ecommerce sector and the importance of finding balance in addressing consumer privacy without negatively impacting the Internet economy.

The following day, member companies joined DMA’s Government Affairs team for a series of Capitol Hill meetings, advocating directly on issues of postal reform, privacy and “Do Not Track” proposals. DMA members met with the offices of Senators Rob Portman (R-OH) and Mark Warner (D-VA) as well as Representatives Gerry Connolly (D-VA), Danny Davis (D-IL) and Cliff Stearns (R-FL). Meetings were also held with the staff on Senate and House committees tasked specifically with working on privacy and postal matters.

If you would like to learn more about the annual DMA in DC conference, please contact Rachel Thomas, DMA’s vice president of government affairs.

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About Direct Marketing Association (DMA)

The Direct Marketing Association (www.the-dma.org) is the leading global trade association of businesses and nonprofit organizations using and supporting multichannel direct marketing tools and techniques. DMA advocates standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the end-to-end direct marketing process. Founded in 1917, DMA today represents companies from dozens of vertical industries in the US and 48 other nations, including nearly half of the Fortune 100 companies, as well as nonprofit organizations.

In 2010, marketers – commercial and nonprofit – spent $153.3 billion on direct marketing, which accounted for 54.2% of all ad expenditures in the United States. Measured against total US sales, these advertising expenditures generated approximately $1.798 trillion in incremental sales. In 2010, direct marketing accounted for 8.3% of total US gross domestic product. Also in 2010, there were 1.4 million direct marketing employees in the US. Their collective sales efforts directly supported 8.4 million other jobs, accounting for a total of 9.8 million US jobs.

The Power of Direct: Relevance. Responsibility. Results.

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