This story has been updated to include comments from ANA CEO Bob Liodice.
The Data & Marketing Association (DMA) is set to be acquired by the Association of National Advertisers (ANA) just one year after celebrating its centennial. The integration is scheduled to be completed by July 1, subject to a formal vote by DMA’s board.
The DMA will become a division within ANA headed by DMA CEO Tom Benton, per an organization announcement. Member benefits touted in the announcement include development into new technology platforms, leadership on data privacy and security issues, codification of data-driven standards, and increased access to education, training, and professional development opportunities.
“The [DMA] Nonprofit Federation is very important to ANA,” Bob Liodice, CEO of ANA said in a statement to The NonProfit Times. “There are a substantial number of client side marketers that we truly value and appreciate — so their satisfaction and delight will be very important to us. In terms of how we will ‘delight them,’ ANA’s robust portfolio of products and services will be available to them in short order — which should give them a lot more value than they have ever received.”
A precise cost comparison of membership dues at ANA and DMA was not provided. Dues structures are dramatically different at the moment, Liodice said, making such a comparison difficult. Dues will be aligned among members during a multi-year process.
The two associations have traveled on diverging financial paths in recent years. ANA reported revenues of $38.4 million on its 2016 Internal Revenue Service (IRS) Form 990, the most recent tax form available. That figure was up from $37.3 million in 2015, $32.8 million in 2014, and $26 million in 2013. The acquisition is the latest in a series made by ANA over the past four years, including the Word of Mouth Marketing Association, Advertising Educational Foundation, Business Marketing Association, and Brand Activation Association.
DMA, meanwhile, has faced steady revenue declines from $22.3 million in 2012 to $20.4 million in 2013 to $19.7 million in 2014 to $17.8 million in 2015 down to $11.7 million in 2016, the last year of available tax data. Revenue minus expenses similarly dipped from $1.8 million and $824,966 in the black in 2012 and 2013, respectively, to losses of $1.2 million in 2014 and $900,041 in 2015. The association rebounded with a $575,175 gain in 2016.
DMA has had numerous internal issues, with multiple chief executives during the past decade and a board proxy fight. In 2009, board member Gerry Pike, who was denied a second term by the DMA’s board nominating committee, ended up keeping his seat and gaining seats for three new members in a voting proxy that set up boardroom battles.
DMA has been seeking a partner for several years with at least one attempted merger with the The Interactive Advertising Bureau (IAB) falling through.
Senny Boone, general counsel and head of DMA’s Nonprofit Federation, said that conversations between DMA and ANA have taken place over the past several months, citing a good deal of synergy between the commercial side of DMA and ANA’s work. DMA underwent a name change in 2016, transitioning from the Direct Marketing Association to Data & Marketing Association. Becoming a division of ANA is an additional step in making data a focus, according to Boone, adding that data is becoming increasingly important for nonprofit members.
Boone estimated that about one-third of the current DMA membership is focused on the nonprofit sector– about 300 organizations and 70 to 80 agency suppliers that market to and on behalf of nonprofits. That share will decrease to about 10 percent within the larger framework of ANA, which does not currently have an area of focus specifically for nonprofits. The federation has been a cash cow for DMA, one nonprofit executives calling it “solid black in a sea of red.”
No association changes will be made in 2018, both in terms of events and staffing. The 2019 Washington Nonprofit Conference will also remain in place. Boone said that the focus is on enhancements — maintaining existing services while finding areas in which ANA membership might provide added benefit to existing and lapsed DMA members. It is too early in the acquisition process to look too far in 2019 and 2020, Boone said, but a commitment to transparency has been made if changes are made.
Kelly B. Browning, CEO of the American Institute for Cancer Research in Washington, D.C., served on the DMA board from 1999 to 2014. He said that he was not surprised by the acquisition and that the move appears to be a logical and attractive one for DMA. The importance of data in the direct-marketing equation has accelerated within the past five years and Browning sees the acquisition as an extension of that.
“I’m optimistic,” Browning said. “The last 10 years of charitable fundraising has been difficult. The economy has not been helpful. Economic policies haven’t been helpful. I look at it that nonprofits will benefit from the strength and stability that this merger will bring to the table.”
The stability and financial resources that ANA offers DMA and, by extension the nonprofit federation, are primary benefits of the maneuver. DMA’s government affairs work will be a primary benefit for ANA, which has focused on the continued tax deductibility of advertising expenses, according to Browning. “Nonprofits are white hats. You want them on the hill with you,” said one long-term direct response executive with knowledge of the transaction.
Browning added that concerns about nonprofits being lost in the shuffle are legitimate, but he doesn’t see things playing out that way. He anticipates that nonprofit representation will improve rather than subside.
“I think that this particular merger kind of brings some renewed strength to the DMA and I expect the DMA to do the political representation and educational programs and market-making that they have consistently done over the years,” he said.
Geoff Peters, CEO of Moore Direct Marketing Group, voiced his contrary opinion that the nonprofit federation — despite being a large portion of overall membership — has not been much of a priority for DMA. The acquisition signals a doubling-down toward a digital path favored primarily by larger corporations, he said. Referencing his time volunteering with the association, Peters said he felt as though the federation was never seen as a major player within the larger association. Even though it eventually earned a board seat, it became less relevant with time. He sees the acquisition as predictable and more of a pro for for-profit members and con for nonprofits.
“In a word, hard-times,” Peters said when asked about the future of the federation without further changes. “If they do nothing, it won’t disappear overnight. It will take years. But it’s not going to grow stronger.”
Bold action is required to keep Humpty Dumpty together, Peters said, drawing parallels with the Association of Fundraising Professionals, Washington, D.C., chapter and Direct Marketing Association of Washington (DMAW). The organizations were struggling with declining attendance at both of their separate conferences. Peters proposed that the two associations, without any additional resources, combine efforts and the annual Bridge to Integrated Marketing and Fundraising Conference was born, serving as a boon for both organizations.
Peters no longer serves in any capacity with DMA or DMAW, but said that a similar arrangement might be beneficial to preserve the federation and that, if he were on an advisory council, he would look at options. If nothing is done and members do not see the promised increased benefit at ANA, federation members might vote with their feet by moving somewhere else and taking their dues with them. DMAW, which DMA sought to acquire years ago, would be the most logical partner, according to Peters, given shared goals including advocacy, education, and direct marketing for nonprofits.
“If I was in leadership, current leadership, I’d be thinking to look for new relationships and a new home and the obvious choice, to me, would be the DMAW,” he said.
Boone said that some such questions are not unreasonable, with many individuals eager to have nonprofits’ voices preserved in legislative and other initiatives already undertaken by the nonprofit federation. The primary reason that the federation is moving forward is the expectation that there will not be changes to the work already done, but rather opportunity in educational opportunities and other member benefits.
“We are vetting this carefully. We want to hear those concerns,” Boone said of criticisms and creeping doubts about nonprofits’ place in the new ANA division. “I think it’s a good thing that people are asking and we want to hear that and we want to respond moving forward.”
Boone described herself as a realist and recognized the sense of unknown that can be associated with an acquisition. She reiterated, however, that the focus remains to help benefit the nonprofit sector with data, educational, and other needs.
“We are going into this with our eyes wide open,” Boone said. “It’s meant to enhance the DMA. We’re not expecting changes. We’re expecting enhancements.”