YOU’RE WRONG IF you think this is going to be one of those “What was on the front page of DIRECT 10 years ago?” articles. Actually, there was but one issue of DIRECT in 1988, and it barely reflected the mood of that year.
It was an ugly year, almost as bad as the one we’re in now. It started as Iran- Contra was drawing to a close, continued through a long summer heat wave and ended with the bombing of Pan Am flight 103 over Lockerbie, Scotland.
And if you believe the old saying that “the past resembles the future more than one drop of rain resembles another,” you might see harbingers of today’s national politics in that year’s presidential contest.
Gary Hart, disgraced as an adulterer in 1987, had re-entered the race, only to drop out again later. Joe Biden quit after allegations that he plagiarized a speech.
In New York, presidential hopeful Al Gore stood by nervously while Mayor Ed Koch told reporters that “any Jew who votes for [Jesse Jackson] is out of his mind.”
That summer, Ted Kennedy led convention goers in the derisive chant, “Where was George?” In the fall, it was George’s turn: He bashed Michael Dukakis as a liberal, and alienated a whole sector of the population with his Willie Horton TV ads.
That’s the way I remember 1988.
Direct marketers were also in a surly mood, but it had nothing to do with politics. In April, many were brought to the brink of insolvency by a 25% postal rate hike.
The U.S. Postal Service had asked for less, but the Postal Rate Commission thought it should get more, a move that spared the first class stamp. And once it had the PRC’s opinion, the USPS rushed implementation from June to “Black Sunday,” April 3.
The consequences were devastating for firms already struggling with massive paper hikes. As reported in that first issue of DIRECT, Fingerhut reduced its mailing volume by 25.3 million pieces. Several smaller catalogs simply closed their doors.
Tempers flared during a meeting between direct marketers and PRC chairman Janet Steiger at the DMA spring conference in Washington, DC. “We were screwed and didn’t enjoy it,” Lee Epstein ranted as he left the Hilton.
The response of incoming Postmaster General Anthony Frank? Basically, “Stop whining.” He complained that there was too much direct mail, and added that alternate delivery was nothing but “winos hanging things on doorways.”
That was one big story of 1988. While DMers were grilling Steiger, another story was unfolding in the Hilton’s basement cafeteria. There, among the ferns and the blond woodwork, executives from TRW Information Services unveiled a revolutionary new mailing list, based largely on data in credit reports.
Within months, TRW was savaged in every conceivable forum, including the trade press and U.S. News & World Report. In retrospect, it was the first time a list or database was criticized simply for being (most previous privacy flaps had to do with misuse of lists).
And the first real critics were not privacy advocates, but list managers. Several deplored the entry of TRW into the field, though it’s still unclear whether they were really worried about privacy or the new competition.
Either way, DIRECT reported in October that TRW planned “to issue a policy statement in an attempt to allay concerns over the use of demographic and credit information, in responseto the direct marketing industry’s growing concern over privacy.”
Didn’t anything good happen in 1988?
Oh, yeah. For example, the postal flap led-years later-to a more customer-friendly (and fiscally responsible) USPS. And it caused businesspeople to start wondering if they could be turned away from paper mail and the whole annoying process.
Direct marketers were already trying to find a way.
In 1987, for example, J.C. Penney had started an online shopping service called Telaction. It bombed, joining videotext and several other systems in the junkyard of technological buffoonery.
Old-timers may recall just how primitive things were in those days. Reporters wrote stories on typewriters, and we handed the hard copy to a typesetter. And yet, DIRECT quoted Steve Jobs as saying that “the dominant microcomputer for desktop publishing in the 1990s will be built around the UNIX operating system.”
Jobs wasn’t the only visionary-Prodigy and America Online were already around. But it was years before people starting talking about the “information superhighway.”
Yes, there were other good things. There was no recession, and Mike Tyson, who could still fight, was undisputed heavyweight champ.
We’ll talk again in 2008.
HAVING GIVEN their own views on the future, our soothsayers were asked about some of the more unusual or unlikely predictions they had come across.
“Eight years ago somebody predicted that within five years more than 25% of all orders would be taken electronically,” says OrderTrust’s Tim Litle. “That was at a DMA conference. I think it was from somebody who had something to sell.”
Steve Cone of Fidelity Investments cites two predictions. “First, that technology will present a threat to privacy. Second, that direct mail volumes are going to increase, not decrease. I think that’s just plain wrong. I don’t see any evidence of that occurring.”
“People in the computer industry said that Dell’s direct model would never work,” notes B. Joseph Pine of Strategic Horizons LLP. “Now I hear executives say that Dell’s model will work in computers, but it will never work in their own industries.”
Net Perception’s Steve Larsen doesn’t put much weight behind a forecast that technology was going to reduce people in direct marketing.
“That may have been true in manufacturing, but not in direct marketing. The more you can make e-commerce a satisfying experience, the more people are going to want to use it. And the more that they can use it, the more people you will need on the back end,” he says.
Finally, Steve Horne offers an ominous prediction as a cautionary note.
“Thirty years from now, we will have a fully electronic marketing future where almost all human contact is really taken out of the loop, save for some initial programming. That is a future in which you look around at the exhibit floor at the DMA conference and say that 90% of the folks won’t be in the business they are in if that comes true.”
