I had dinner with a good friend several weeks ago. Over a shared plate of wings and skins, I asked how her mother was doing.

She said her mom is afraid to leave the house, believing at any moment that the Publishers Clearing House Prize Patrol will appear at the door with a handful of balloons and a multimillion-dollar check.

Her mom’s bedroom is piled high with merchandise she buys promoted in direct mail sweepstakes in hopes of improving her chances of winning.

The Deceptive Mail Prevention and Enforcement Act was signed into law in 1999 to regulate sweepstakes mailings precisely because many elderly people thought their only chance of winning was to make purchases. The measure took a tremendous toll on the industry, forever crippling one of the most powerful tools used for generating magazine subscriptions.

Are there others across the country like my friend’s mom? Dozens? Hundreds? Thousands? And is there a ticking time bomb waiting to wipe out the remaining direct mail sweeps marketers and take the online sweepstakes industry with it?

Back in the late 1990s some elderly folks were so confused by sweeps copy that they flew down to Time Customer Service Inc.’s offices in Tampa, FL, to collect their fortunes.

One such mailing from American Family Publishers read: “Richard Lusk Has Won It All and Will Definitely Receive $12,000,000.00 Cash Guaranteed!”

Mr. Lusk, 88 at the time, flew to Florida. He was, of course, turned away by Time reps, who chuckled behind his back. His family tried to explain that he hadn’t won, and wasn’t likely to — and that he had to stop buying thousands of dollars’ worth of merchandise.

But that didn’t stop him. He snuck out of the house late one night and flew again to Tampa, lured by another mailing promising a windfall. This time his son Bill called the media. A reporter and photographer were there to greet him at the airport.

Florida Attorney General Robert Butterworth read all about it the next day. He asked that cab and bus drivers at the Tampa airport to take seniors traveling to Time Customer Service to collect sweeps winnings back to his office.

Multiple state investigations, consumer lawsuits and the media kicked into high gear.

People like Richard Lusk truly trusted companies like American Family Publishers and Publishers Clearing House. But he and others like him didn’t know that behind the scenes all that was happening was the more they bought, the more mailings they’d receive.

Most of today’s online and mobile promotions are targeted to younger consumers. They generally have an innate distrust of marketers and, so, are much less likely to be seduced by come-on copy. What they are likely to do is lambaste your brand on YouTube, where literally millions of site users might see it.

My friend isn’t willing to stand idly by. She’s called the companies sending her mother the solicitations and has asked that her mom’s name be taken off their lists. She plans to contact state officials.

Before the 1999 law passed, five children of parents also confused by sweepstakes copy told their tearful, heartrending stories to the Senate — and the world. The entire hearing was covered on C-Span.

By 2000, response rates plummeted, some by as much as 50%. American Family Publishers was forced to close. And the likes of Reader’s Digest and Publishers Clearing House were financially hobbled.

I wonder how long it will be before my friend’s mother’s plight — and others with stories like hers — once again catch legislators’ or the national media’s attention?

Is it the business of online sweeps marketers to pay attention to their offline brethren? I think so.

Send your comments to Patricia Odell at [email protected]

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FORGET THE OLD MYTH that sweeps mailings always pull better than non-sweeps.

After switching its direct mail strategy away from sweepstakes earlier this year, Hachette Filipacchi has held its average response rate steady at 2% to 3%. And, of course, pay-up is one and a half times better than it was with sweeps, ranging from 20% to 40%.

That’s not the only change at the New York publisher, which sends out 20 million pieces annually for 15 subscription-based titles. Woman’s Day, which has never been sold via direct mail, is now being offered through non-sweeps mailings.

Do the Math

The decision to turn away from sweeps was based on hard numbers.

CAUGHT IN the crossfire of negative press and new regulations regarding sweepstakes offers, sweeps lists have taken some serious hits. Sweeps entrants who once purchased magazine subscriptions believing they had a better chance to win are quickly turning into less-responsive consumers who enter but don’t buy.

This has led to a reduction in the number of small files on the market, and response has been soft to the sweepstakes lists that remain. Indeed, some mailers have chosen to stop offering sweeps at all rather than continue coping with heavy state regulation.

“The whole area has been decimated by legislation and negative publicity from American Family Publishers,” says List Services Corp. president Mal McCluskey.

Dozens of files have been pulled from the market including PuzzleMaster and Triple 8, whose owners have opted not to wrangle with the new strict controls regulating what can be stated on a direct mail sweeps piece, adds Fran Golub, vice president of list management for Walter Karl/InfoUSA.

Uni-Mail List Corp.’s vice president Carolyn Woodruff agrees. “I have a tremendous number of mailers who are saying, ‘I’m going to walk away from the sweepstakes business.’ Mailers don’t want to have to deal with these highly regulated issues on a state- by-state basis.”

Other mailers have simply cast a suspicious eye on sweeps files.

“Mailers are afraid to rent these lists; you’re never quite sure how legitimate they are,” Golub says. Even [American Family Publishers (AFP) and Publishers Clearing House (PCH)] have “dramatically cut down on the number of names they’re renting,” she adds.

The bottom line? A smarter sweeps player has emerged from the media blitz. Now emboldened to enter and not buy, they are entering the “sweeps-no” universe while buyer files continue to diminish.

And because sweeps-nos-regarded as poor responders-are growing in number, list managers are searching for ways to give those names some value.

What can be done to manipulate those files to work for a mailer’s offer?

Woodruff suggests testing weekly hotline names instead of the typical monthly responders. She adds that both sweeps-no multibuyers and names new to the file might perform better.

McCluskey counters, “It’s hard to make them more attractive. They’re not buyers.”

Are there other issues affecting the sweeps arena besides AFP and PCH’s legal troubles?

Big-money lottery games, like the recent $250 million Powerball that caused a nationwide stampede, have also led to a decline in the number of stampsheet sweeps players.

“There’s a lot of ways to win millions of dollars right now,” says John Case, executive director of subscription marketing for TV Guide.

To help strengthen its gross response, which Case says has been “soft,” TV Guide last month increased its sweepstakes prize from $100,000 to $1 million, its highest ever. He notes that “$100,000 just wasn’t that sexy anymore. We wanted to create a little bit more excitement with the offer.”

Meanwhile, a number of big sweeps mailers, like PCH and Harlequin Enterprises Ltd., report lower yields on their rented names.

For PCH, response on rented files has decreased annually. “The numbers decrease minimally each year, but over the years that adds up,” says Marianna Halufska, vice president of L.E. Turner, PCH’s list brokerage unit.

Why is this happening? In addition to the negative media blitz, Halufska cites a lack of new names and the continual conversion of prospects to customers.

Harlequin also has experienced a lower yield on lists it’s rented for years, says director of list management Bryan Weaver.

But there’s a bright side-sort of.

Because response is lower, list owners are willing to negotiate price, offer better net-name arrangements, lower or eliminate selection charges, or decrease the base rate for greater volume, says Halufska. “They’re trying to be fair, realizing that yields are decreasing.”

Another venue to make sweeps files more attractive?

Some experts suggest modeling and profiling, while others say that analytical process takes too long in an arena where recency is critical.

TV Guide recently built and implemented a lifetime-value model on its 10-million-name file. Over the last six months, it has seen an increase in requests for modeling and profiling services, Case says.

Jeff Feldman, vice president of list brokerage for Walter Karl/InfoUSA recently began encouraging mailers and list owners to participate in modeling. He agrees that “the most importantthing is recency,” but adds that modeling offers more names with a potentially higher response.

“Maybe you don’t need the recency if you create a model. Maybe you can go to a six-month name instead of a 30-day name,” Feldman suggests.

Experts are saying that the sweeps list arena has already hit bottom and is on its way back, according to McCluskey.

Though not as robust as past files, some new lists are emerging, and sweeps lists now on the market continue to perform “decently” for many mailers, including fundraisers, magazine publishers, and book and record clubs. Continuity clubs and general merchandise marketers also are making good use of them.

And, observers say, these lists continue to work well for sweeps offers.

“If you mail a sweepstakes offer to a sweepstakes-responsive name, almost always, regardless of the offer, it will [achieve good] response. Sweepstakes people are sweepstakes people,” says Uni-Mail president Mike Bryant.

Roman: Response Rates Steady Only 25% of mailers reported a drop in second quarter 1998 mailings, compared with 33% during the same period in 1997, according to a recent survey conducted via e-mail by Pearl River, NY-based Edith Roman Associates Inc.

This was largely due to a leveling out of results: While 42% reported actual gains, compared with 44% a year earlier, 32% said their response rates had stabilized, as opposed to 22% in the 1997 pilot survey.

When the results were broken out by industry, fundraisers and business-to-business catalogers were the big winners, with 100% and 80%, respectively, reporting increases. The remaining 20% of B-to-B catalogers said responses stayed even.

Half the seminar providers said their response rates increased, while the other half reported no change. One in five retail or consumer catalogers said they experienced increases; the rest noted stable mailing results.

Sixty percent of respondents use e-mail marketing. Out of those, 78% indicated even or improved figures. The rest of the industries surveyed-associations, clubs/membership organizations and industrial marketers-had some falloff.

Among financial DMers and office equipment/electronic marketers, two in five said response had increased, one in five said it remained the same and two in five experienced a decline.

DIRECT will report results of Edith Roman’s quarterly survey on an ongoing basis.-Patricia Odell and Richard H. Levey