What Challenges to Data Sourcing Are Compilers, and Thus Direct Marketers, Facing?
February 2006
|
A number of legislative measures reduced the amount of data to which compilers and marketers have access. The Can Spam Act knocked down e-mail universes, because mailers only wanted to rent names that were
verified opt-in. But this left better e-mail sources for rental, because sourcing got stronger.
With the Shelby Act, drivers license data was lost, but more importantly, you lost [an easy way to derive] affluence based on car model and make. With HIPAA, the only access is to self-reported data, so direct-to-consumer marketing is extremely difficult. Imagine someone notes what health issues she has on a survey, but doesn’t check off the box to OK permission for contact. Then the survey does no good.
Every time you lose a data source, though, you don’t just lose the name for marketing purposes, but you also lose the ability to validate and qualify data. Modeling and customer surveys are the leading ways to replace data that used to be compiled [from more accessible sources]. But you really have to bump up [the amount of] surveying [done] to get this self-reported data.
In the end, multiple verification of data leads to better quality universes, so there’s a positive side to losing easy access to data. But on a fiscal level, this is a painful process in compiling information.
As [the industry] educates consumers about how data is collected and used, then the data sources will come back as consumers make more informed decisions [about what data they will share]. From my perspective, cutting off the ability of people to choose whether or not they will receive marketing is worse than losing a data source.—Stefanie Pont, managing partner, Pont Media Direct
One of the challenges is that there’s no more [Donnelley Marketing] Shareforce. [Compilers and marketers] used this survey data as a second source of data verification as well as for data overlays.
In addition, legal restrictions limit the amount of information that can be shared as a result of joint ventures. For example, when a person purchases a car, the credit information and VIN number cannot be released to third parties due to the GLB Act and Shelby Act. But, you are able to verify the car make and model, and that credit was used to make the purchase; this information still allows marketers to provide the prospect with targeted offers based on the insight gained from this [transaction].
Another example is that because you’re often getting data from list owners who have agreements with other parties, you have double royalties. And, because you don’t have the volume you used to and more of the data you source is direct response data, it’s more expensive to compile. It was not unheard of to get data for under $10/M; now, it’s more like $25/M.
But data compilation is more meticulous and [compilers and marketers] are more careful about the quality of the data they source, so the information we have now is far more responsive than it was in the past.—Michele Volpe, vice president of sales and marketing, Media Source Solutions
Apart from legislation, the compiled industry has another issue that is threatening it … and that is the proliferation of companies that are reselling data—everything from compiled to survey to transactional to modeled. Ten years ago, there were a handful of companies doing this. Today there are probably 30 to 40. This creates two problems: 1) Rather than being the premium that it should be, data are becoming a commodity; and 2) in order to “get the business,” pricing becomes the competitive issue.
Some companies multisource and use sophisticated segmentation techniques designed to enhance response, but this adds to the cost of data. So, when cost is the bottom line, mailers may opt for the lowest cost. Over the years, many mailers who otherwise “would not touch” a compiled file have begun to test the waters. The number of demographic selects that are available is a strong selling feature, and the widespread, low pricing is compelling. However, when the cheaper lists don’t perform, it casts a shadow over the entire compiled industry … and we find ourselves back to square one again with mailers who say that compiled files don’t work.—Chicca D’Agostino, president, Focus USA
verified opt-in. But this left better e-mail sources for rental, because sourcing got stronger.
With the Shelby Act, drivers license data was lost, but more importantly, you lost [an easy way to derive] affluence based on car model and make. With HIPAA, the only access is to self-reported data, so direct-to-consumer marketing is extremely difficult. Imagine someone notes what health issues she has on a survey, but doesn’t check off the box to OK permission for contact. Then the survey does no good.
Every time you lose a data source, though, you don’t just lose the name for marketing purposes, but you also lose the ability to validate and qualify data. Modeling and customer surveys are the leading ways to replace data that used to be compiled [from more accessible sources]. But you really have to bump up [the amount of] surveying [done] to get this self-reported data.
In the end, multiple verification of data leads to better quality universes, so there’s a positive side to losing easy access to data. But on a fiscal level, this is a painful process in compiling information.
As [the industry] educates consumers about how data is collected and used, then the data sources will come back as consumers make more informed decisions [about what data they will share]. From my perspective, cutting off the ability of people to choose whether or not they will receive marketing is worse than losing a data source.—Stefanie Pont, managing partner, Pont Media Direct
One of the challenges is that there’s no more [Donnelley Marketing] Shareforce. [Compilers and marketers] used this survey data as a second source of data verification as well as for data overlays.
In addition, legal restrictions limit the amount of information that can be shared as a result of joint ventures. For example, when a person purchases a car, the credit information and VIN number cannot be released to third parties due to the GLB Act and Shelby Act. But, you are able to verify the car make and model, and that credit was used to make the purchase; this information still allows marketers to provide the prospect with targeted offers based on the insight gained from this [transaction].
Another example is that because you’re often getting data from list owners who have agreements with other parties, you have double royalties. And, because you don’t have the volume you used to and more of the data you source is direct response data, it’s more expensive to compile. It was not unheard of to get data for under $10/M; now, it’s more like $25/M.
But data compilation is more meticulous and [compilers and marketers] are more careful about the quality of the data they source, so the information we have now is far more responsive than it was in the past.—Michele Volpe, vice president of sales and marketing, Media Source Solutions
Apart from legislation, the compiled industry has another issue that is threatening it … and that is the proliferation of companies that are reselling data—everything from compiled to survey to transactional to modeled. Ten years ago, there were a handful of companies doing this. Today there are probably 30 to 40. This creates two problems: 1) Rather than being the premium that it should be, data are becoming a commodity; and 2) in order to “get the business,” pricing becomes the competitive issue.
Some companies multisource and use sophisticated segmentation techniques designed to enhance response, but this adds to the cost of data. So, when cost is the bottom line, mailers may opt for the lowest cost. Over the years, many mailers who otherwise “would not touch” a compiled file have begun to test the waters. The number of demographic selects that are available is a strong selling feature, and the widespread, low pricing is compelling. However, when the cheaper lists don’t perform, it casts a shadow over the entire compiled industry … and we find ourselves back to square one again with mailers who say that compiled files don’t work.—Chicca D’Agostino, president, Focus USA
Companies Mentioned:
 |
|
Secrets of Direct Marketing Testing
Strategic Catalog Marketing