Privacy: the gathering storm; privacy may well be the most challenging issue facing direct marketers in the 1990s

Folio: The Magazine for Magazine Management, Oct, 1989 by Richard A. Barton

"How much do they know about me and how do they use that knowledge?" The rhetorical question, asked of me by Senator Patrick Leahy (D-VT) during the course of a joint Senate-House hearing on privacy, came out almost as a plea.

The lawmakers are concerned. And although the direction that future regulatory thrusts may take is not completely clear at this point, we can be sure that there will be some significant attempts to tighten privacy laws. Some of these will inevitably affect direct marketing. Conversations with key senators and representatives and their staffs clearly point in this direction. There are literally hundreds of privacy bills pending in state legislatures. Most of them deal with the use of state-owned lists, but all of them can affect direct marketers in one way or another.

Rumblings of concern

In the mid-1970s, privacy became a household word. The aftermath of Watergate brought with it a national soul-searching into the extent to which our individual privacy was being compromised by the growing ability of government and business to collect and disseminate personal information. In 1974, Congress passed the Privacy Act of 1974, which created the Privacy Protection Study Commission. The commission was charged primarily with developing recommendations to protect individuals from unwarranted government intrusion into their private lives through promiscuous use of the vast amount of personal data that Federal, state and local governments could and did collect. However, the commission was also asked to study the list practices of direct marketers and to determine whether or not "an organization engaged in interstate commerce should be required to remove from its mailing list the name of an individual who does not want to have his name on it."

The Direct Marketing Association (then known as the Direct Mail Advertising Association) mounted a significant effort to educate the commissioners about the direct marketing business and to convince them that the simple appearance of a name on a mailing list was not an invasion of privacy, and therefore should not be subject to governmental regulation. The commissioners agreed, but acknowledged there would come a time when the situation must be reevaluated. The commission also admonished direct marketers that selfregulation was essential and insisted that they provide their customers ample opportunity to have their names removed from mailing lists, should they so desire.

To this day, we have made great efforts to do just that. Direct marketing companies enthusiastically joined in efforts to offer their customers a nameremoval option, and the Direct Marketing Association (DMA) offers a nationwide service to assist in removing names from all national lists.

For many years, self regulation was a significant factor in convincing govemment officials that regulation of mailing lists was unnecessary. But the era of governmental laissez faire toward the list practices of direct marketers is fast coming to an end.

In 1989, we are facing a new, more intense era of privacy concerns. This time the catalyst is not a fifth-rate burglary in a Washington office building, but a growing awareness of the computer and the uses to which it can be put. We now have the capability to gather, store, analyze, segment and use for commercial (and many other) purposes more data about more people than was dreamed of in the 1970s. And technology is providing us with ever more ingenious ways to reach into the lives of every American. It is little wonder that Americans are getting nervous.

Not a violation

Direct marketers maintain, with justification, that their practices should not frighten even the most privacyconscious person. Whatever data may be used to generate a mailing list is not revealed when the final list is put together. The worst thing that can happen is a person receives a piece of mail or a telephone call. Annoying to some, perhaps, but hardly a violation of a fundamental right.

Nevertheless, there is a growing nervousness among legislators and regulators-and understandably so. In the direct marketing field alone, new practices and technologies have received a good deal of publicity lately. The use of credit data to generate mailing lists has raised some eyebrows. Telephone technology that allows the caller's number to be identified and captured by the recipient of the call can be a boon to marketers and customers alike, but it also raises serious privacy questions that must be resolved. The intrusiveness of telephone calls and the even more controversial use of Fax machines for marketing raise privacy questions of a different sort, which were unheard of just a few years ago. Supermarkets capture information on customers' purchases and use it to market other products and for couponing. Even magazines are getting into the act by using information about subscribers to tailor personalized issues.

More traditional direct marketers are not off the hook, either. Databases are more comprehensive than they have ever been. Even the sophisticated use of personalization raises questions in some people's minds. List compilers have much more powerful tools to collect and store information from thousands of public sources.