Economic Impact on List Rental Supply vs. Web 2.0 Insights

Given the consideration that revenues from list rental may offset losses from other areas on a direct marketer’s income statement, would a slowed economy in 2009 bring more new lists to market? Many would like to think so, but the hypothesis needs to be tested and getting to the answer is not that simple.

However, there are a few trends that might support this theory based on data from the NextMark index of 60,000 datacards. Here’s what we learned from the activity of approximately 800 list managers during the first quarter of 2009 compared with previous periods:

1. More new datacards in Q1 2009: 3,311 new datacards were published during the first quarter of 2009, compared with 3,102 during the same period in 2008—representing a 6.7 percent increase. This also exceeds the calendar 2008 quarterly average (2,972) by 11.4 percent.

2. Reduced universe sizes for new files: The average universe size decreased by 23 percent when comparing new cards published during the first quarter of 2009 with the same period in 2008. The average universe size decreased even more (33 percent) when comparing new datacards published in the first quarter of 2009 with those published in the previous quarter.

3. Increase in "e-mail-only" files: The number of e-mail-only list datacards also jumped significantly last quarter. There were 276 e-mail-only files added by NextMark users during the first quarter of 2009, compared with 196 during the first quarter of 2008 and 147 during the first quarter of 2007. That represents an average annual increase of 43.8 percent.

4. Slight decline in new files without e-mail addresses: The number of new list datacards that did not offer e-mail addresses (postal only) declined consistently each quarter over the trailing 12-month period. However, the average decrease in number of files was only about 1 percent per quarter.

5. Datacard cloning for e-mail lists types: Based on the observations in Nos. 3 and 4 above, one might expect the number of new files that include both postal and e-mail names would have increased. However, the findings were less predictable. The number of new multichannel datacards added in 2009 actually decreased compared to the first quarter of 2008. A few companies are creating e-mail-only versions of the datacard versus adding the e-mail list type to the existing datacard for an active postal list. This increases the number of searchable Web documents as well as the perceived count of list titles.

Some Interpretations
So how does this relate to the original question of whether or not the slowed economy would bring more new lists to market? Is there truly an increase in the supply of fresh names available for brokers and mailers to rent?

In reality, the number of postal names is fairly consistent with the population, while the number of opt-in e-mail files continues to grow. However, uncertainty remains as to whether or not the real number of new response lists is growing—but how important is that really?

The increased diversity of data, selectivity, program options and list-specific metrics are enabling marketers to do more than ever before. New lists come and go, many lists become hybrids as a result of enhanced data processing, and other traditional marketing programs are expanding online (e.g., webserts).

Here’s the takeaway: Opportunities for direct marketers must be evaluated in a broader context. The counting of new lists is meaningless without an understanding of list quality, segmentation, selectivity and options for multichannel use. The dark ages have been replaced by Web 2.0, which supports an online knowledge base that is available to direct marketers 24/7. Provided below are three examples of list-specific attributes that are available online for direct marketers to consider before testing new files:

• List popularity index (LPI): a mailing list's popularity rating on a range from 0 to 100, with 100 being the highest rating. The LPI scores are calculated using an algorithm that analyzes recency and frequency of more than 100,000 outside list recommendations made in the trailing 12 months of the scoring date.

• Recency, frequency, monetary value (RFM): Try running a Google search on “Swiss Colony Mailing List” or click here. Notice the RFM data including a monthly hotline, new-to-file buyers, multibuyers, average order amount ($75) and other targeted selects.

• Highly correlated lists (HCL): If you see reputable titles listed as "highly correlated," you know the list you’re considering is in good company. Notice the mailing lists also recommended by those who recommended the Swiss Colony Mailing List:  Harry and David—Mail Order Buyers Masterfile, Jackson & Perkins—Catalog Buyers Masterfile, Wolferman’s, Lillian Vernon Mail Order Buyers, Godiva Chocolatier, The Lighter Side, Abbey Press Mail Order Buyers, Figis Gifts in Good Taste Buyers, Fairytale Brownies, and Trophy Nut Company Food and Gifts.

Focus on retaining the empirical knowledge of a seasoned list broker, and take a closer look at the performance indicators for each new list on your testing matrix.

Chris DeMartine is the director of business development at NextMark, a Hanover, N.H.-based marketing mailing list information and technology company. Reach Chris at (603) 643-1307 x114 or via e-mail at cdemartine@nextmark.com. To be notified when new lists are added to the NextMark database, sign up for the firm's e-newsletter.

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