$137.8B U.S. ad spend for top 200 advertisers
To better understand the challenges list owners face in generating incremental revenue from valuable customer information, BtoB Senior Reporter Carol Krol held a roundtable by teleconference with four leaders from the list industry: Gloria Adams, senior VP-audience development and book publishing, PennWell Corp.; Jane Buck, director of marketing, Hello Direct; Alan Douglas, president, Douglas Publications; and Barry Green, VP-director of circulation Hearst Corp.
Common themes emerged, including the need to take advantage of partnerships and alliances in order to generate revenue while still maintaining control of access to customer information.
BtoB: What are the current trends in list marketing?
Gloria Adams: The thing I am noticing more than anything is quite a shift in the lists that are being rented. For years, my high-tech magazines really were our bread and butter with lists. They have really fallen a lot in the last couple of years, while our more traditional magazines have increased greatly.
Barry Green: I definitely agree. The direct mail orders for our publication lists have decreased. Overall list rental revenue has remained fairly constant. Since we're so targeted on the electronic engineering side of the business, the prospects for using our files are fairly limited, except [for the fact that] our list marketing firm has this one gigantic, humongous business database, and what they sell through that is used by more traditional marketers.
Jane Buck: I've had a very successful year. Some of that success has to do with very basic process and procedures that we've put in place at Hello Direct to improve the consistent delivery of our list and increasing names available on the market. We just have begun renting our e-mail list. We've got a pretty significant amount of names: 360,000 e-mail addresses, and 180,000 of those have postal. I had expected to see a lot more interest in our e-mail list.
BtoB: Why hasn't there been more interest?
Buck: The list came on in September. That was bad timing, because e-mailers don't traditionally get that aggressive with b-to-b offers in Q4.
Green: We're getting advertisers who are looking to create their own databases. What they are looking to hook up with is either a value-added or they want to make an arrangement to cross-reference lists and append data from their list to ours and our list to theirs. But the end result of that is that possibly after that's completed, they are likely never going to be a renter of your file because you kind of use up what you each have that the other doesn't have.
Adams: I totally agree. I think we are seeing lots of advertisers that used to rent our list but are now asking to append.
Buck: We are forecasting pretty significant growth in our postal list rental revenue in 2007 based on our successes in 2006. We also are part of the Abacus B2B Alliance, we're part of MeritBase and we're part of Experian' B2B [database].
Alan Douglas: We, on one hand, have magazines, but then we do send out over 4 million pieces a year in support of our video and newsletter divisions, and we participate in some of the same co-ops and large databases.
BtoB: What are your biggest challenges?
Douglas: There really is a need for salespeople to stop giving away programs that end up not being used and calling them a "value-added" or "full marketing media packages" when what they really are are giveaways.
Green: Absolutely. That's been the toughest thing because on the list management side, you don't want to be the cause and have it rest on your head that such and such an advertising program didn't happen because we wouldn't give value-added.
Buck: I've got outbound telemarketers who have access to the database; I have inbound teams who have access. It's hard to keep everybody on the same page.
Adams: My biggest concern is that I'm killing my list. We have circulation using the list and we have the Web group using the list to promote webcasts and white papers. We have show groups that promote to it, we have list rental that promotes to it and we have circulation that promotes to it.
Douglas: I would disagree. It's not an issue that we're having too much sex; it's an issue that we're not having enough great sex.
I truly am convinced, based upon open rates, response rates, that in fact what's happening is there's very little either unique or compelling from one media company as related to their competitors. It's not the frequency.
BtoB: How are you marketing e-mail lists and dealing with permission issues?
Green: [We're] making sure that everything we do complies with CAN-SPAM. We are all facing lower responses in direct mail and especially in trying to sell subscriptions to publications, so e-mail marketing has been a savior.
Buck: I struggle sometimes with corralling the cats. I try not to get in our customers' in-box three times in one day—I want to spread the messages out.
BtoB: Are you renting third- party lists?
Buck: I'm on the verge of doing that, and most likely, I'm going to begin with list exchanges.
Adams: Barry and I know all about that.
Green: That's the only way to survive. It's too costly at a 1% response rate to pay.
Douglas: The other way in which to be effective and not burden your subscribers or your "listees," is to find formal alliances whereby others will send out your message for you. That not only ensures an open rate that's much higher but also a click-through rate and an implied endorsement.
Adams: I think that's great when you can do it. We do nothing other than e-mail and telemarketing because you can't afford to mail things, yet a lot of people refuse to rent their phone numbers.
Buck: I refuse to rent my phone numbers.
Adams: That really puts you in a bind from a circulation standpoint because then you just keep using the same old lists over and over.
BtoB: Why aren't you renting the telemarketing list?
Buck: We have an outbound telemarketing team that sells products to corporate accounts, so we want to protect those accounts.
Douglas: I think that the days of believing that we have unique phone numbers and we are somehow protecting our list by not giving them out ended when appending e-mails and appending phone numbers became cost-effective.
Green: There is one publishing company in the engineering market that has about three publications, and they will not rent or trade their phone numbers. What I find hilarious about them is that they will trade their e-mail addresses. It's amazing to me, because that's where I find most people are overprotective.
BtoB: What are the big opportunities in 2007?
Douglas: Partnerships with other firms that will bring fresh meat and prospects in, and appending, appending, appending and appending. The answer to "people won't give me e-mails and won't give me telephones" is getting what you can and then appending.
Buck: It's back to basics. Let's go through and look at who rented in 2006 by the category, by the industry; and let's talk with the broker, the management team about where they think the dollars could come from, where the growth opportunities are; and let's go get those people to rent our file.
Adams: The thing that we are working on is creating more data-bases … to try to generate additional revenue.
BtoB: How do you choose a list manager?
Douglas: Painfully. After years of one relationship, we [recently] created an RFP. We narrowed it down to just a few firms, including the incumbent, to see what they would offer us, and we ultimately ended up making the change to MeritDirect. It was a lot like childbirth.
We were looking for a firm that would assist us with essentially being able to go out and get hundreds of thousands of names that we didn't have, a firm that would give us appending support, a firm that would be willing to experiment with rotating circulation, a firm that would give us a guarantee.
Adams: One of the things that you have to look at is who are their other clients? You obviously want synergy between your list and the other lists they are selling. I also think it has to be somebody who you enjoy working with. You spend a lot of time working with these people.
Douglas: That's important for us, but let's face it … it's going to be economically driven. As much as we may cherish values, we tend to act based upon economic interest.
Green: I'm still with the same list management firm we've been with about eight years. I appreciate a current vendor based upon the stretches they have made for me, getting something done in shorter amount of time. Sometimes that's not always translatable into a dollar value.
Buck: I would be afraid of the loss of momentum. I believe in an open and honest relationship. I wanted [my list manager] to be more communicative, and now they have biweekly meetings.
Douglas: When we made our switch, we ended up with the individual that we have been working with for years at our old vendor who had moved to our new vendor. That's both the economic advantage and the relationship.