List management is becoming a more competitive, sophisticated business at a time when b-to-b publishers are relying more than ever on the revenue that lists can bring in. Within publishing companies, there's increased focus on list revenue, said Shannon Aronson, corporate director-audience development at CMP Media. "It's coming to the forefront of business management's attention," she said.
Gloria Adams, director-corporate audience development at PennWell Publishing, said lists are "a huge revenue source, and they're critically important to the bottom line right now."
But the business is getting tougher. B-to-b circulation and list management executives point out that the marketplace is getting more competitive as more publishers put their lists in play, the number and types of lists offered expand, and list management companies compete more aggressively to manage lists. At the same time, direct marketers are under greater pressure than ever before to get the most bang for their list rental bucks.
Over the past five to seven years, the majority of b-to-b publishers have switched from in-house list management to professional list management companies. "I think the last recession led to the remaining in-house list management departments being outsourced," said Nicholas Cavnar, VP-circulation and data development at Hanley Wood. "In recent years, many b-to-b companies started to take the position that it's better to outsource, even if everything else is equal" because an in-house infrastructure can't be rescaled easily as business ebbs and flows.
Also, because list management companies have relationships with a wide swath of direct marketers outside an individual publisher's niche, they are able to open up opportunities that the publisher might not otherwise access. "Where I've seen growth with Hanley Wood is with the broader direct marketers, such as credit card companies and catalog houses," Cavnar said.
In a parallel trend, list management companies started paying more attention to b-to-b publishers.
"Direct marketers are looking to narrow their audience and get a better return on that investment," said Jeff Moriarty, VP-list management at MeritDirect, who spent 10 years in b-to-b publishing before being recruited in 2004 to help Merit- Direct establish more publishing-based list management programs.
With the pressure on marketers for conversion and ROI, the smaller, more targeted lists available from b-to-b publishers have become more attractive than they were when the size of the list was the key parameter, he said.
"You're seeing growing respect for the quality of the list," said Mark Priebe, president of Proximity Marketing. "[Marketers] are not batting an eye on b-to-b list prices when they have qualified and targeted people, and the [renter] can see a return. So b-to-b list pricing has held pretty well" as compared to b-to-c.
Even so, b-to-b list owners are starting to feel more pressure to discount. Profit margins in list management are still "very healthy, but they are going down a tiny bit," said PennWell's Adams. "There's more negotiating going on."
Hanley Wood's Cavnar said: "There's a lot more pressure on list owners to do more deals and not raise prices. I'm finding myself pushing back more." Usually, he said, he can come to terms with a list rental customer, but there are also times he has to walk away from business.
CMP's Aronson said she has seen more discounting as well as new types of promotions coming into list management: "They're testing different things. For example, a list management company will have a spring sale to try to bring in new business," she said.
Aronson also sees list managers offering more marketing services and, for the first time, hiring salespeople to market their list portfolios to major direct marketers. M