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Though multichannel direct marketing drives more than 10% of the economy, potentially industry-crippling challenges loom, said DMA chief executive John Greco during his opening remarks at the DM Days New York conference Wednesday.

Spending on direct marketing and related processes in the U.S. accounts for about half of all ad-related spending and drives about $18 trillion in incremental sales, or about 10.3% of the nation’s gross domestic product, he said.

“This kind of economic muscle makes multichannel direct marketing a big segment by any definition and like any big segment, we have big opportunities and big challenges,” he said.

For example, the U.S. Postal Service isn’t done raising rates and has filed for an 8.5% average rate increase, including 9% for standard mail, Greco said.

“Faced with continued costly price increases, many businesses and nonprofit mailers will ultimately be forced to limit campaigns or seek less expensive ways to communicate with current and potential customers,” he said. ”Such cutbacks would also affect downstream players, such as paper mills, printers and list providers.”

Postal reform to curtail erratic rate activity has passed in the House and Senate but awaits resolution in joint conference committee, he said.
Meanwhile, multiple states have considered bills that would create do-not-mail registries for postal mail similar to the national do-not call list that has proven to be highly popular with consumers.

 
“Fortunately, all of the bills have been voted down so far,” said Greco. “But they’ll be back next year driven by both privacy advocates and environmental groups.”

More than 9 million jobs and $900 billion in commerce depend on having a viable postal service, he said. “Maintaining that viability is an important challenge for all marketers.”

Another hot-button issue for marketers is data security, he said. Close to 30 states have enacted laws on handling sensitive information, and nearly al the rest are considering them, he added.

In Washington, six House and Senate committees are working on data security related legislation, Greco said.

The DMA is working to help lawmakers draw the distinction between “personal identity” data and marketing data, he said.

“It’s vital we emphasize that marketing data isn’t useful to steal identity,” he added.

As a result, he said, the biggest challenge for marketers is maintaining consumer trust.

“The best way to build confidence and trust is by demonstrating that we are responsible stewards of the marketer consumer relationship,” he said. “That means informing consumers about their choices and their rights. It means honoring their preferences, being responsive to their concerns and safeguarding their data.”