I came across this statistic the other day while doing some research on marketing fraud:

In recent years, despite the creation of a national “do not call” registry, the legitimate telemarketing industry has grown, according to the Direct Marketing Association. Callers pitching insurance plans, subscriptions and precooked meals collected more than $177 billion in 2006, an increase of $4.5 billion since the federal do-not-call restrictions were put in place three years ago.

This all sounds very unlikely. And I recall from years of working on telemarketing regulation that the DMA used suspicious revenue numbers in order to influence the FCC and FTC, and prevent the creation of the Telemarketing Do-Not-Call Rule. You’ll note that many of their numbers concern 2001, the year before Do-Not-Call was being considered by the FTC.

So, tonight I did a quick search of the DMA’s website, noting all the times they they made a claim to regulators or in a press release about revenue from telemarketing. The result? Not only are the numbers suspiciously high, they seem to change…in the same year:

  • “Telemarketing Sales” 1996: $63,100,000,000
  • “Telemarketing Sales” 2000: $86,900,000,000
  • “Telemarketing Sales” 2001: $93,800,000,000
  • Sales to consumers in 2001: “nearly $270 billion”
  • Sales to consumers in 2001: $296,000,000,000
  • “Telephone Marketing Generated $668 Billion in 2001 and Employed Six Million”
  • “The teleservices industry employs more than four million people and provides product offerings directly to consumers that resulted in $275 billion in sales in 2001.”
  • “In 2001…customers purchased $661 billion in goods and services – accounting for almost six percent of Gross Domestic Product (GDP).”
  • Sales to consumers in 2001: $274,200,000,000
  • Sales to businesses in 2001: $390,000,000,000
  • “Telemarketing Sales” 2002: $100,000,000,000
  • “We will protect the integrity of the American teleservices industry, which generated over $700 billion last year [2002] for the U.S. economy, by respecting consumer preferences.”

Comments

  1. #1 R N B
    February 8, 2008

    I suppose I should declare an interest: I advise clients on “direct marketing”.

    Although we don’t really call it that any more. It is all “Personalised Marketing”, “Interactive Marketing”, “Individualized Marketing”, “CRM”, etc.

    Data protection laws are different in the European Union, although not yet harmonised across member states. But the trend is the same as you hint, because of the junk-mail scammers, there are ever more opt-out and do-not-mail lists, and ever greater penalties for violating them.

    Yet, for many reasons that are little discussed here but are hot topics elsewhere, “direct” marketing (in its purest sense of targeted and directly measurable marketing) is becoming more critical and more inevitable. Costs of commodities are becoming standard (if not tending to zero) and it is only by customisation and personalisation that added value can be generated. But we can only personalise if we hold customer data and permission to use it.

    Not easy to resolve. Everyone in the industry is looking for the magic solution. I call one possible development “Pepper’s Ghost” but it’s a subject that is much bigger than a comment box.

  2. #2 Scott Belyea
    February 8, 2008

    Not easy to resolve.

    Has been for me.

    “I don’t do business over the phone. Goodbye.”

  3. #3 ec
    February 8, 2008

    Didn’t know that they shill claimed to add money to the economy.

    I do know that around 2000-2001 I had signed up every person I could find on the DMA for spam emails. They had all email addresses as personalname@the-dma.org type at that time which were used to sign up for every possible internet spam type offer I could find.

    About 2 years later the DMA came out against spam emails and would change their website to generic email addressess such as customerservice@the-dma.org -which is generally how it looks now. Not sure if it is all related but it was fun to do at the time…

  4. #4 R N B
    February 8, 2008

    I meant “not easy to resolve” for the marketer, not for the consumer :)

    There is no future in junk mail. The spammers deserve every bit of opprobrium that they get.

    But if we believe that there may be benefits from better targeted communication, more personalized products, then the issue is how to accomplish that when the marketer is finding it increasingly difficult to collect, store and use the personal data that this requires.

    It need not be “push” marketing, but even customisation of Amazon’s front page to your preference requires use of personal data. That needs control and protection, but it has potential benefits.

  5. #5 Sanjdimes
    February 8, 2008

    We’re a startup that stops junk mail and has been dealing with their ‘numbers’ ever since we started. Don’t know if their numbers are accurate, but for $75,000 a year (if you spend $150 million more in direct marketing), you can join the dma and find out.

  6. #6 Daniel Rutter
    February 9, 2008

    Even the $63 billion figure would require every man, woman and child in the USA to spend more than $200 annually on “teleservices”. This seems, as you say, unlikely.

    The higher figures only make it more ridiculous. $700 billion is well over $2000 annually for every man, woman and child.

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