Lists: A Little B-to-B Cooperation
Breaking down the business co-op database market
March 2007 By Bill Singleton
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Why should you consider B-to-B cooperative databases? Because they reduce the complexity of finding good prospects to mail. There are two kinds of cooperative databases available today: Abacus’ B2B Alliance and Experian’s B2B Base, which are of the membership type, and Direct Media’s Data Warehouse and Merit Direct’s MeritBase, which are list-specific options.
It is important to put these prospecting sources into perspective. A few definitions and figures will give us a framework. As of January 2007, there are 301 million people living in the United States. From that total, 146 million are employed: 115 million work in non-farm, private sector jobs, and 22 million work for the government, according to the Bureau of Labor Statistics.
How can you reach key businesses or segments of this large working population? You have some options. First, you can follow the traditional route of working with a list broker to rent lists that fit your criteria. Keep in mind that there are 24,000 business-related lists out of the total 53,000 lists for rent on the market today. But you probably will lose a large portion of the names you select to duplication between lists before you get your net mailable count.
The alternative is to investigate rental databases. These systems fall into three categories:
• Compiled—The compiled databases, such as infoUSA’s files, aggregate businesses from directories and corporate filings. They offer lower cost names but have limited contacts within companies and limited selectivity past the basic firmographics of industry, employee size and sales volume.
• Owned/managed—The owned/managed databases, such as Edith Roman’s BRAD, offer greater selectivity but are comprised of only the lists that a particular list firm manages. Selections across the database are possible, and there are many more criteria by which to select business and contacts. But you will not be able to add other lists from different sources.
• Cooperative—The membership and list-specific cooperative databases offer solutions to the problems of navigating thousands of individual lists and losing names in the merge/purge as well as being limited to the lists of a single list firm.
Let’s further inspect this last source of B-to-B names to see what differences exist between the various offerings on the market.
Join the Club: Membership Databases
Abacus, in Broomfield, Colo., started the first membership database in 1998, the B2B Abacus Alliance. It now has 350 participants contributing 12 months of order history. The second is B2B Base, started in 2004 as a joint project by Experian, in Costa Mesa, Calif., and Merit Direct, in White Plains, N.Y. Both databases require you to contribute your own names and transaction history to the file before you can select names for prospecting.
The Abacus B2B Alliance holds a total of 75 million names at the company, site and contact level. The initial load of 12 months’ transaction history from each member was the starting point for monthly updates that have now accumulated 1.2 billion transactions at the order level. Additional content is provided by overlaying the customer information with D&B’s masterfile to provide selectability by SIC, employee size, sales volume and DUNS numbering to indicate enterprise, branch, headquarters or site locations. Modeling is provided by Abacus to find affinities between a member’s customers and prospects from other members’ files based on categories of merchandise purchased and factors such as the industry and size of the businesses. There is no membership fee; charges are approximately $85/M for net names selected for mailing.
As noted earlier, the Experian B2B Base is a joint venture of Experian and Merit Direct. Merit Direct is the exclusive list manager while Experian owns the B2B Base system itself. This membership database is smaller than the B2B Alliance, with 21 million names acquired from its 109 contributors. It is updated monthly by its members after an initial load of 60 months of transaction history that goes down to the SKU level. It is enhanced with the Experian National Business Database file, which supplies more than simple firmographics to include executive counts and credit status indicators. Modeling is provided by Experian. Similar to the Abacus B2B Alliance, B2B Base does not require a membership fee but does charge approximately $90/M for the net names selected for mailing.
An advantage that the membership co-op databases have over renting names from individual lists and the list-specific databases to be discussed in a moment is the transaction history. This is used in affinity and other types of models based on your customers’ purchasing behavior to find appropriate prospects for the goods that you want to sell. And there are several disadvantages. You have to submit your file in time to have it included in the next update of the database, which can require a month or more of lead time. Also, you cannot use other members’ names unless you let them use your names, nor can you control the use of your file as you can if you rent it out individually or place it in one of the list-specific co-ops.
Not a Joiner? Consider List-specific Databases
The two non-membership co-ops are Merit Direct’s MeritBase and Direct Media’s DataWarehouse, both launched in 2000. You can rent directly from these databases either by selecting specific lists, or by taking a sample or using a model to select across all of the lists in the database. To interact with these database systems, you can submit your own customer file to be included in the next monthly update and have your names used in look-alike modeling or as a suppression file against the prospect names in the database. Either way, you do not pay for the gross quantity of names rented, but for the net names actually selected and mailed from the database. If you contribute your names to either database, the arrangements are the same as if your file was rented on the open market: You control the use of your file by specific companies and receive market rates when it is rented.
Both databases also employ a rate-sharing mechanism called fractional allocation. If a name occurs on several different contributing lists, the name is considered a “multibuyer,” and each list owner gets a share of the rental fee. This has encouraged list owners to participate in these list-specific cooperative databases to receive a more steady income than if they waited to have mailers rent specifically from them.
Merit Direct has been growing its cooperative venture, MeritBase, by adding lists that its customers want. MeritBase has reached 300 million gross names, which net down to 80 million unique contacts. It includes 1,600 different lists. The names in the base are enhanced on a company or site level by the D&B business file and Experian’s National Business Database file. The output cost of the names varies with the rates of the individual lists participating in addition to a processing fee of $11/M for any names selected. Approximately 90 percent of MeritBase customers use the file for all of the prospect names they mail, the company reports.
Direct Media’s DataWarehouse currently includes 1,500 different lists contributing 112 million unique names. It brings together response files, compiled files and controlled circulation files in addition to three different sources of enhancement data. Given the coverage the DataWarehouse has of most U.S. employees at the majority of the country’s businesses, it does not have a strong slant toward one industry or size of company. The cost of using the DataWarehouse is the list-specific cost per thousand names and a $12/M processing fee.
These two list-specific cooperative files offer a distinct advantage to renting individual lists, developing private prospecting databases and working with membership co-op databases. If you want to use a list not already in the list-specific database, the database manager will invite the list owner to participate. You then shift from the typical payment for gross names selected to payment only for the net names you mail.
Decision Points
Some firms create and maintain private prospecting databases, though in practice the operation of these sources is the same as that of the DataWarehouse or MeritBase. However, if you take the private database route, you shoulder all of the costs of processing, enhancing and modeling the names. You also will have to keep the volume of names mailed from the private database above relatively high minimum levels to make it worthwhile for the hosting service bureau to dedicate resources and staff to the project. Before the co-op databases were launched, private systems were the only way for B-to-B mailers to merge all of the lists they wanted to use. Now there appears to be little advantage for such a venture and a large disadvantage in the likelihood of a high average cost per name compared to working with the co-ops.
If you are a general B-to-B mailer, the list-specific co-ops’ advantage over membership-based co-ops is their open nature. Almost any of the 24,000 B-to-B lists on the market can be included in these databases with the list owner’s permission. The possible range of prospects is therefore greater because you are not limited to just the customers of the members. You also can rent from the list-specific co-ops with little lead time while the membership systems need the time to integrate a new member’s file into the system. Some direct mailers participate in the membership databases while taking advantage of the variety of sources in the list-specific co-op databases to gain the benefits of both environments.
Your best course of action: Plan a campaign with the end goal in mind and allow adequate lead time. You then will be able to select the best source of prospects for your needs—whether that be individual lists, compiled databases, owned/managed databases, membership co-ops or list-specific co-ops.
Bill Singleton is president of Singleton Marketing, a database marketing consultancy in Algonquin, Ill., that specializes in circulation analysis, new customer acquisition, data enhancement, loyalty marketing and market research. He can be reached at (847) 854-7817.
It is important to put these prospecting sources into perspective. A few definitions and figures will give us a framework. As of January 2007, there are 301 million people living in the United States. From that total, 146 million are employed: 115 million work in non-farm, private sector jobs, and 22 million work for the government, according to the Bureau of Labor Statistics.
How can you reach key businesses or segments of this large working population? You have some options. First, you can follow the traditional route of working with a list broker to rent lists that fit your criteria. Keep in mind that there are 24,000 business-related lists out of the total 53,000 lists for rent on the market today. But you probably will lose a large portion of the names you select to duplication between lists before you get your net mailable count.
The alternative is to investigate rental databases. These systems fall into three categories:
• Compiled—The compiled databases, such as infoUSA’s files, aggregate businesses from directories and corporate filings. They offer lower cost names but have limited contacts within companies and limited selectivity past the basic firmographics of industry, employee size and sales volume.
• Owned/managed—The owned/managed databases, such as Edith Roman’s BRAD, offer greater selectivity but are comprised of only the lists that a particular list firm manages. Selections across the database are possible, and there are many more criteria by which to select business and contacts. But you will not be able to add other lists from different sources.
• Cooperative—The membership and list-specific cooperative databases offer solutions to the problems of navigating thousands of individual lists and losing names in the merge/purge as well as being limited to the lists of a single list firm.
Let’s further inspect this last source of B-to-B names to see what differences exist between the various offerings on the market.
Join the Club: Membership Databases
Abacus, in Broomfield, Colo., started the first membership database in 1998, the B2B Abacus Alliance. It now has 350 participants contributing 12 months of order history. The second is B2B Base, started in 2004 as a joint project by Experian, in Costa Mesa, Calif., and Merit Direct, in White Plains, N.Y. Both databases require you to contribute your own names and transaction history to the file before you can select names for prospecting.
The Abacus B2B Alliance holds a total of 75 million names at the company, site and contact level. The initial load of 12 months’ transaction history from each member was the starting point for monthly updates that have now accumulated 1.2 billion transactions at the order level. Additional content is provided by overlaying the customer information with D&B’s masterfile to provide selectability by SIC, employee size, sales volume and DUNS numbering to indicate enterprise, branch, headquarters or site locations. Modeling is provided by Abacus to find affinities between a member’s customers and prospects from other members’ files based on categories of merchandise purchased and factors such as the industry and size of the businesses. There is no membership fee; charges are approximately $85/M for net names selected for mailing.
As noted earlier, the Experian B2B Base is a joint venture of Experian and Merit Direct. Merit Direct is the exclusive list manager while Experian owns the B2B Base system itself. This membership database is smaller than the B2B Alliance, with 21 million names acquired from its 109 contributors. It is updated monthly by its members after an initial load of 60 months of transaction history that goes down to the SKU level. It is enhanced with the Experian National Business Database file, which supplies more than simple firmographics to include executive counts and credit status indicators. Modeling is provided by Experian. Similar to the Abacus B2B Alliance, B2B Base does not require a membership fee but does charge approximately $90/M for the net names selected for mailing.
An advantage that the membership co-op databases have over renting names from individual lists and the list-specific databases to be discussed in a moment is the transaction history. This is used in affinity and other types of models based on your customers’ purchasing behavior to find appropriate prospects for the goods that you want to sell. And there are several disadvantages. You have to submit your file in time to have it included in the next update of the database, which can require a month or more of lead time. Also, you cannot use other members’ names unless you let them use your names, nor can you control the use of your file as you can if you rent it out individually or place it in one of the list-specific co-ops.
Not a Joiner? Consider List-specific Databases
The two non-membership co-ops are Merit Direct’s MeritBase and Direct Media’s DataWarehouse, both launched in 2000. You can rent directly from these databases either by selecting specific lists, or by taking a sample or using a model to select across all of the lists in the database. To interact with these database systems, you can submit your own customer file to be included in the next monthly update and have your names used in look-alike modeling or as a suppression file against the prospect names in the database. Either way, you do not pay for the gross quantity of names rented, but for the net names actually selected and mailed from the database. If you contribute your names to either database, the arrangements are the same as if your file was rented on the open market: You control the use of your file by specific companies and receive market rates when it is rented.
Both databases also employ a rate-sharing mechanism called fractional allocation. If a name occurs on several different contributing lists, the name is considered a “multibuyer,” and each list owner gets a share of the rental fee. This has encouraged list owners to participate in these list-specific cooperative databases to receive a more steady income than if they waited to have mailers rent specifically from them.
Merit Direct has been growing its cooperative venture, MeritBase, by adding lists that its customers want. MeritBase has reached 300 million gross names, which net down to 80 million unique contacts. It includes 1,600 different lists. The names in the base are enhanced on a company or site level by the D&B business file and Experian’s National Business Database file. The output cost of the names varies with the rates of the individual lists participating in addition to a processing fee of $11/M for any names selected. Approximately 90 percent of MeritBase customers use the file for all of the prospect names they mail, the company reports.
Direct Media’s DataWarehouse currently includes 1,500 different lists contributing 112 million unique names. It brings together response files, compiled files and controlled circulation files in addition to three different sources of enhancement data. Given the coverage the DataWarehouse has of most U.S. employees at the majority of the country’s businesses, it does not have a strong slant toward one industry or size of company. The cost of using the DataWarehouse is the list-specific cost per thousand names and a $12/M processing fee.
These two list-specific cooperative files offer a distinct advantage to renting individual lists, developing private prospecting databases and working with membership co-op databases. If you want to use a list not already in the list-specific database, the database manager will invite the list owner to participate. You then shift from the typical payment for gross names selected to payment only for the net names you mail.
Decision Points
Some firms create and maintain private prospecting databases, though in practice the operation of these sources is the same as that of the DataWarehouse or MeritBase. However, if you take the private database route, you shoulder all of the costs of processing, enhancing and modeling the names. You also will have to keep the volume of names mailed from the private database above relatively high minimum levels to make it worthwhile for the hosting service bureau to dedicate resources and staff to the project. Before the co-op databases were launched, private systems were the only way for B-to-B mailers to merge all of the lists they wanted to use. Now there appears to be little advantage for such a venture and a large disadvantage in the likelihood of a high average cost per name compared to working with the co-ops.
If you are a general B-to-B mailer, the list-specific co-ops’ advantage over membership-based co-ops is their open nature. Almost any of the 24,000 B-to-B lists on the market can be included in these databases with the list owner’s permission. The possible range of prospects is therefore greater because you are not limited to just the customers of the members. You also can rent from the list-specific co-ops with little lead time while the membership systems need the time to integrate a new member’s file into the system. Some direct mailers participate in the membership databases while taking advantage of the variety of sources in the list-specific co-op databases to gain the benefits of both environments.
Your best course of action: Plan a campaign with the end goal in mind and allow adequate lead time. You then will be able to select the best source of prospects for your needs—whether that be individual lists, compiled databases, owned/managed databases, membership co-ops or list-specific co-ops.
Bill Singleton is president of Singleton Marketing, a database marketing consultancy in Algonquin, Ill., that specializes in circulation analysis, new customer acquisition, data enhancement, loyalty marketing and market research. He can be reached at (847) 854-7817.
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