September 2006 - Interview With ERA's Outgoing Chairman Jeffrey D. Knowles

The End of the Beginning

By Paige H. Muller

Under the glare of the national media and the intense scrutiny of a congressional panel, the impetus for a national trade association to protect the interests and growth of the burgeoning informercial market was born. Sparked by what representatives of Congress and the FTC dubbed “rouge marketers” within the infomercial industry, Jeffrey D. Knowles spearheaded the creation of the National Informercial Marketing Association (NIMA) with nine other industry leaders and $100,000 in dues revenue in 1990.

From this inauspicious beginning, the direct response marketing industry and the association both developed and evolved. As electronic retailing broadened in scope and definition, NIMA members realized the need for a more expansive nomenclature, which resulted in a name change to the Electronic Retailing Association (ERA) in 1997.

Many direct response marketing industry veterans will recall the early days of electronic retailing when the advertising “rule” of thumb was somewhat akin to the tabloid newspaper credo “if it bleeds it leads”; no product claim or promise was too big or over the top.

If fact, this sort of creative license if you will, branded the band of entrepreneurs who recognized the potential of this medium as “personas non grata” among organizations such as the Direct Marketing Association and the American Association of Advertising Agencies that either ignored or kept a wary eye on these upstarts.

NIMA’s highest priority was to proactively establish industry-wide guidelines to ensure “truth in advertising.” Knowles helped set marketing guidelines, legal principles and an ethical code of business conduct to help counter the industry’s tarnished image, gain consumers’ confidence and stave off potentially detrimental government regulation.

Today, the imprint of his lasting contribution to the evolution of the industry is discernable every time you turn on the TV. One of NIMA’s marketing guidelines required that all informercials must be identified at both the beginning and end as “paid advertising.” Now, virtually every long- or short-form advertisement is clearly labeled as such.

Knowles served as the association’s general counsel for 13 years and was an ex-officio member of the Board of Directors before assuming leadership of ERA as chairman in Fall 2005. Acknowledging that he is his perhaps own worst critic, Knowles cast a critical eye over his year-long tenure before stepping down this September to begin the next phase of his transformative role in the direct response marketing industry.

ERA: Looking back on your tenure as chair, what grade — A, B, C, D or F — would you give yourself and why?
I think it’s better to let other Board members evaluate my performance as chair this year. So much of what we’ve accomplished during my tenure has been the result of collaboration with my fellow Board members, ERA staff, ERA’s councils and committees and the membership as a whole. On a personal level, I’m my own toughest critic and while I’ve worked hard on a broad range of issues this year, there’s so much more to do to help the association reach its full potential.

ERA: What is your proudest achievement as chairman?
That’s a tough question because there are two achievements at the top of my list. First, I was extremely proud to have helped ERA launch the Online Retailing Alliance-a critical initiative to the association’s future growth and success. But one of my fondest memories is of this year’s Asian meeting in Hong Kong. After leading the association’s first efforts to reach out to Asia some 10 years ago, then watching helplessly as the economy there collapsed and ERA’s efforts waned, I was extremely proud to preside over this year’s vibrant, successful Hong Kong meeting, which was planned and organized by a reenergized and rededicated Asia Committee.

ERA: In a July issue of ERA’s e-newsletter, ERA President and CEO Barbara Tulipane wrote that the most important leadership skill is to “understand yourself” and that finding out your weakness and areas for improvement is an important step in becoming a more effective leader. What is your personal leadership philosophy and how did you exercise it as chair?
I’ve been in leadership positions for much of my adult life within ERA, Venable and other organizations I’ve long been associated with. Leadership, in my mind, requires honesty, integrity, drive, vision, practical and emotional intelligence, and an ability to listen to the needs and views of others. Management ability is one leadership skill, but should not be mistaken for true leadership, which requires an ability to motivate, listen to, work with and sometimes disagree with others. I’ve tried to exercise these qualities in my dealings this year with ERA staff, the Board of Directors, the Executive Committee, many of ERA’s counsels and committees, and the association’s membership.

ERA: As you are aware, ERA is trying to recruit new members beyond its traditional core. In your opinion, how much of a barrier is the public perception that ERA is “that infomercial association” to achieving that goal?
Perception and reality are different things. I believe that ERA can shape its own destiny regardless of any current or past perceptions about the association or the industry as a whole. With the launch of ORA, ERA is moving on to new territory and perceptions will catch up with the reality that ERA is expanding, evolving and embracing new opportunities and members.

Jeffrey Knowles, Esq. Partner
Venable, LLP
Jeffrey Knowles, a graduate of Columbia University, is a partner with Venable, LLP, and serves on its Executive Committee. Knowles is also chair of the Government Division of Venable LLP, and heads the firm’s Advertising and Marketing Practice Group. He has wide expertise in regulatory and legislative matters, as well as public relations and crisis management and represents many of the leading direct response television companies. Knowles represents clients before the Federal Trade Commission, U.S. Postal Service, state regulatory authorities and self-regulatory bodies, such as the National Advertising Division of the Council of Better Business Bureaus.

ERA: ERA has been very focused in its efforts to recruit online retailers and emerging technology companies into the association. We all remember what happened when the Internet bubble burst, however. Do you think there is a similar danger in making this market segment such a focal point of ERA’s efforts to expand its membership? Are there other potential leads that are being overlooked?
While ERA is currently focusing a significant part of its membership recruitment efforts on the Internet community, I think there is little risk of a follow-up crash like the one we saw in the late 1990s. The Internet is so well-established today and so widely used for so many different purposes that I think ERA is wise to refocus its efforts. However, I also know that ERA is not abandoning its recruiting efforts among its core constituency. Nor is ERA ignoring opportunities to attract new members from groups such as the interactive television industry or the big box retail industry.

ERA: Obviously, selling is key to ERA’s members. How would you sell someone on the reasons to join ERA?
I think the sales process for ERA is a fairly easy one and turns largely on presenting the right value proposition to each potential member. For most potential members, it’s networking; for others, it’s government affairs; for some, it’s education; and so on. While ERA has many great strengths and, yes, some weaknesses, it is the association for direct response television and electronic retailing. There is no other association today that offers anywhere near the benefits that ERA offers its core members.

ERA: What are the top five things you think ERA should do to improve its value proposition to its members?
ERA must continue to build in areas such as its already strong government affairs program. But it must also conduct or sponsor more industry research and provide more specific, relevant data and information to the media and potential members about our industry. In a nutshell, more member benefits, benefits, benefits…

ERA: Looking ahead, what challenges do you see facing the direct response industry? ERA?
This is a tough time for the DRTV industry. Fewer infomercials are working and marketers are challenged by a rapidly changing landscape. Media rates remain high and increasing media fragmentation is an ever-present reality. Government regulation and ERSP, ERA’s self-regulation program, are forcing marketers to tow the line or risk their livelihoods. As we turn toward a multichannel universe, however, there are countless new opportunities for ERA and the industry to adapt, grow and prosper. Obstacles present challenges and challenges present opportunities. Those who can spot the opportunities, adapt to new environments and tap the needs of consumers will survive and prosper. Many of the leading Internet companies-such as Google, eBay and others-are prime examples of organizations that have identified and served the needs of millions of consumers. ERA must adapt as well in order to remain relevant to its members and their needs.

ERA: What do you think the face of DR will look like five years from now?
The Internet and video, whether delivered through television, computers, iPods, or cell phones, will dominate the DR landscape. Direct mail, catalogs and other print media will remain active and, at the same time, move or adapt to the Internet and other channels driven by expanded broadband services.

ERA: Net neutrality, streamlined sales tax, and privacy are just some of the legislative issues on which ERA has provided proactive leadership, guidance and advocacy. Playing the role of political pundit for a moment, what issues will be on the agenda for the electronic retailing industry after the mid-terms and the 2008 presidential race?
The same legislative issues will remain on the agenda for ERA after the mid-term elections this fall. However, if the Democrats regain control of the House or Senate, we may see new issues or changes in position affecting ERA’s membership.

ERA: As a founding member of ERA and as someone who has served an active role since its inception, what’s next for you after you step down from the chairmanship?
I will remain on the Board next year as immediate past-chair, as Dan Danielson did this year, and I hope to continue to contribute to ERA’s growth and success. As general counsel of ERA for 13 years, and as a Board member for the past five years, I’ve attended every ERA Board meeting since 1990. After next year, as a founding member, I hope to continue to participate in ERA Board meetings and the Government Affairs Committee.

Thanks in part to Knowles’ tireless work, the tarnished image of the electronic retailing industry has been shed in favor of a new era that is bright with possibilities.

Paige H. Muller is ERA’s vice president, marketing communications. She can be reached at (703) 908-1020, or via e-mail at [email protected].


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