Deliverabilty remains big issue

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International Data Group announced last month that IDG List Services President Deb Goldstein is retiring at the end of September. Goldstein has been with IDG for 21 years, including 16 as president of the list unit.

In that time, Goldstein has witnessed many changes in the list industry, including the shift from being a fairly straightforward list management business to becoming a strategic media partner to its mailer clients and an ally to publishers in furthering audience development. As Goldstein puts it, "We're not a list company anymore. We're a data services provider."

In 2005, the Direct Marketing Association named her List Leader of the Year. Goldstein spoke with BtoB about some of the most important issues in the list industry today, including the ups and downs of direct mail and e-mail marketing.

BtoB: E-mail is an important marketing channel, but challenges remain. What are the biggest challenges of b-to-b e-mail marketing from the list industry perspective?

Deb Goldstein: Deliverability is a big issue. I don't think that has changed and I've seen reports that up to 40% of e-mail messages get caught in spam filters. The difficult part is there's no way of knowing if your message has gotten to the recipient. There are things you need to do, like you have to ask the recipient to white-list you through their filter and you have to work with ISPs to make sure you are a white-listed or certified [with them].

We've been seeing very few complaints about response rates lately. There was a time where we heard about it a lot, but I think people have managed the expectations of what e-mail can produce from a lead perspective. When e-mail first started 10 years ago, response rates were 20%-plus—when it was really new. Now, response rates for e-mail are in the standard postal realm of 1% to 2%, but the difference is it is quick, flexible and measurable.

BtoB: Are e-mail opt-outs a big issue for media companies that rent their names to clients?

Goldstein: I've seen a decline in the past 10 years of at least 10% to 20%. Ten years ago, I had permission on 50% of my subscriber base, and now it probably averages between 30% and 40%. IT people especially are very deliberate about not getting offers.

Relevancy is really important to stemming the tide of opt-outs. You bear the consequence of a collective overuse of names. If more people adhere to best practices, then I think overall there would be less people opting out.

I also think the consumer habits spill over to our professional e-mail response issues. It's all about trust. If another company asks your permission, you get very reluctant.

But if I felt I was getting something that was important either professionally or to my buying habits, I would not mind.

When "Harry Potter" came out, if you pre-ordered the book from Amazon, you got 20% off, shipping at a lower rate and a $5 coupon toward another purchase; and I'll tell you, I used every bit of that.

Because Amazon does not bombard me all the time, I look at everything they send me. I know it's relevant to my buying habits. It's the same thing in b-to-b.

BtoB: What are the best opportunities in telemarketing list rental?

Goldstein: We were very reticent to put our numbers on the market. I convinced our in-house list owners to do it about five years ago. We saw immediate revenue. Telemarketing is really hot these days because it can lift response by 30% either as a follow-up to e-mail or a follow-up to postal. We hear a lot of success stories about it from people who use it.

We do have standalone telemarketing rentals, but most of it is a follow-up [to other media] to reinforce a message.

Response rates are a challenge. [Our customers] need to integrate in some way so a phone follow-up is really effective to making the whole process work better.

I'm seeing an overall increase in e-mail as well. My counterparts in the industry say the same thing. They've all seen a resurgence in e-mail list rental. There were so many issues in terms of response rates, and spam filters and deliverability; and my belief was that it fell out of favor for a little while and now I think it has come back.

That was especially true around the postal increase. Rentals started to increase in April and May and have not let up since.

BtoB: How is the additional impending postal rate increase going to affect the list industry?

Goldstein: I've been in the list business for 25 years. Every time there's a postal increase, two months before that, there is heavy ordering, then it drops off for two months and then it levels out. That did not happen this time. There was such notification on the postal increase that people got it, absorbed it and put it in the budget. And they just abandoned direct response mail. They said, "I'm taking my dollars elsewhere. It's too expensive, and I'm not doing it."

It was business as usual. We forecast accordingly, and it was just steady as you go. There was no spike and no fall off.

[As far as the impending increase] I think the same thing is going to happen. It'll be a combination of absorption, meaning "I budgeted for it," and investment in other media outside of traditional postal. They'll invest in e-mail.

Just like publishing companies have been managing the decline of print against the growth of online in the past five years, direct response takes a while to catch up to those trends. It's the same thing. We now have to manage the decline in postal, while offsetting that with the increase in e-mail and other diversified data products.

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