The Direct Marketing Association's New Math

Submitted by Chris Hoofnagle on February 8, 2008 - 10:50am.

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, 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.”

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