Telemarketers still calling for cash under new rules.

Right up until the Do Not Call Registry took effect just over a year ago, a small army of telemarketers was stationed just outside Los Angeles, scouting the classifieds for anyone selling a car.

Their pitch: For $39, the seller could run an ad in Autotrader magazine with a photo of the vehicle for its long as it look to close the sale.

In the language of telemarketing, it was a "targeted outbound cold call" and, on a good day, the team of 50 callers sold one ad for every 20 calls they made. But that changed on June 27. 2003, when the Federal Trade Commission started compiling the names of consumers who didn't want such calls, targeted or otherwise.

"We had to lay them all off," said Ana Ochoa, product manager for Ontario-based Trader Media Corp. which publishes Autotrader and seven other similar publications. "I can understand why people don't want to get the calls--I'm on the Do Not Call list--but it is not great for business. We had to make a lot of changes."

Layoffs and downsizing at companies that use telemarketing may be the most visible--and predictable--result of the registry. In fact, the FTC's move is having a ripple effect throughout the direct marketing industry with the impact felt even by those companies that had never used cold calls to reach consumers.

As of July 30, more than 62.9 million residential phone numbers had been added to the registry, according to the FFC.

"I think we are bringing peace to the dinner hour," said Lois Greisman, a commission spokeswoman. "The number of people who have signed up is a strong indication that this is something people wanted. It's a way to protect their privacy and avoid unwanted intrusions."

Creative approaches

The limits have forced local telemarketers to seek new ways to generate business.

"What you want to do is get people to call you," said Gerald Bagg, chief executive of Quigley-Simpson, an L.A. advertising agency that specializes in direct marketing. "No one likes to get the calls, but you can entice them to get in touch with you."

As an example, he said his agency created a campaign to launch the Dawn Power Dish Brush for Procter & Gamble Co. with TV spots featuring a toll-free number offering a discount coupon for the battery operated device.

"When we have a consumer call up to ask for a coupon we get their name and address and we have established a business relationship with the consumer," said Bagg. "Once they call you, they have given you their implied consent to contact them. We would not use the information to make an intrusive phone call. We don't want to alienate the consumer. We are on the 'good side' of direct marketing if you had to categorize us. But this is the new way to communicate with consumers."

Greisman acknowledged that the "opt in" aspect of the law remains fuzzy.

"I wouldn't call it a loophole but it is a little bit of a gray area," she said. "If you have had an existing business relationship with the consumer over the past 18 months or the consumer has contacted you with an inquiry in the last three months, you can call them even if they are on the list."

Still, some firms have given up on consumers altogether.

"They are all trying to get into my end of the business now," said Rich Madzel, executive vice president of Custom Telemarketing Services Inc., a Columbia, Md., firm that specializes in business-to-business marketing and which is not subject to the rules governing the Do Not Call Registry.

He said he has seen a steady rise in competition from telemarketing firms trying to elbow their way into the business side of the field.

"The reason there has been so much telemarketing is that it works," said Madzel. "'It may take a whole bunch of calls to get a stile or make an appointment, but it is still a cost-effective way to reach people."

Eileen Joyce, executive vice president of ad agency Palisades Media Group Inc. in Santa Monica, noted that there are still many millions of households that can be called.

"One thing you could say about the registry is that telemarketers don't have to waste their time and energy on those people anymore," she said. "The ones not on the list are the ones that you obviously have a better potential of reaching. So it could be a way to create more efficiency."

Still, major ad agencies have long viewed telemarketing as the industry's ugly stepchild.

"If telemarketing goes away, I say good riddance," said Mike Sheldon, general manager and managing partner of Deutsch/LA, part of the Interpublic Group of Cos. "It's a very inefficient use of a client's funds. The only thing that comes out of it is telemarketers get lectured by the people they call. There are much better ways to spend a client's money."