Marketers starting to demand richer, targeted e-mail lists

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E-mail can be an effective marketing tool when executed properly and used to supplement snail mail. Still, industry observers say that while e-mail lists are gaining in sophistication, they have a long way to go before they possess the richly detailed information that characterizes traditional postal lists.
As rentals pick up after a sluggish year, marketers are starting to lean on their list managers to broaden e-mail lists to include such information as names, SIC codes and company size.

"The market is going to demand that e-mail lists start to emulate postal lists," said Matthew Leonard, IBM Corp. senior manager of customer information policy. "It’s a small trend that’s going to grow. Most e-lists are in the early stages but are getting more sophisticated."

David Menzel, CEO of YesMail Inc., a Chicago-based list manager, said: "The e-mail data aren’t rich enough yet and don’t have the quantifiable target information that offline lists have. But there’s a significant demand for quality b-to-b online data and, as companies start to gather that information, they’ll be in a good position to gain market share."

Part of the problem in developing e-mail lists is that permission standards are a lot stricter online than offline.

"If you can get an online list that has a specific target, it’s more effective for speed," Menzel said. "But in terms of depth and size of audience, there’s no question that offline data are a lot richer."

Jeff Moriarty, director of sales and marketing for Cahners Business Lists, said that although marketers and catalogers face huge technological hurdles in developing e-mail lists for prospecting, they are committed to the space.

"With traditional lists you have people who like to thumb through the catalog. From an e-mail perspective, the technology is just starting to develop that will allow people to thumb through a catalog online," Moriarty said. "Traditional mailers have yet to really get into the game. There aren’t too many lists that offer the marketer information other than an e-mail address."

Another barrier to developing richer e-mail lists is that Fortune 500 companies have been slow to the draw. "They have more layers to deal with when prospecting new customers and are ambivalent about putting major dollars into an area of the Internet that remains difficult to measure," said Dave Smith, senior VP-marketing and business development for the Direct Marketing Association. "But the companies that are investing in e-mail are seeing results and doing more of it."

Industry experts say that within the next several years there will be a significant boost in the number of players offering e-mail lists with more sophisticated demographics that can give marketers the comfort they associate with postal lists.

There are several ways marketers are trying to pump some juice into their b-to-b e-mail lists, such as adopting change-of-address services that allow people on a list to register their new e-mail addresses when they move from one company to another. Companies also are appending postal addresses and other relevant information to e-mail lists.

Marketers can also enhance their e-mail lists through so-called collaborative databases. In a collaborative setting, marketers contribute their in-house names to a public database and take out a certain number of names to try and match up with existing customers who have asked for permission-based e-mail.

Steve Roberts, CEO of list manager Edith Roman Associates Inc., said he was able to increase e-mail response rates for his clients by 300% by applying traditional direct marketing methods to the Internet, such as similar copy, headlines and font size.

"All techniques in direct appeal are applicable to online sales," he said. "You need to use elements that generate interest and use graphics intelligently."

Cutting through the clutter

As e-mail lists grow richer and more detailed, marketers’ success rates using them depend on their ability to cut through the seemingly endless amount of Web clutter.

"My challenge as a marketer is to make a compelling line that will get a click-through," IBM’s Leonard said. "I want people to welcome my mail, not say, ‘Why do they keep sending me this e-mail message?’"

L.J. Roberts, a senior marketing manager for Commerce One Inc., said the Internet software company, which is currently tracking 10 separate postal and e-mail marketing campaigns, continues to hone its e-mail list strategy.

"It’s very beneficial to use e-mail as a direct marketing tool," Roberts said. "The downside is by doing too many e-mails you risk saturating the market. The target will unsubscribe to the service and then you’re lost. You have to make certain the e-mail is opt-in and highly targeted."

Although some economic indicators suggest the recession may be lifting, marketers remain in control in terms of negotiating prices for e-mail list rentals.

"Companies have been very cautious prospecting for the last year," said Jens Runge, VP in the brokerage department of Direct Media Inc., a Greenwich, Conn.-based list manager and broker. "They’ve exhausted their own customer bases and have to go out and acquire new names."

Rental rates for b-to-b e-mail lists generally run $100 to $500 for a thousand addresses.

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