How Cooperative Are Co-op Databases?
Hawes reports that Abacus typically finds new co-op participants interested in blocking usage by other members. Then, as they conduct more model testing, participants see the value of building the models on as much data as possible, which tends to loosen their restrictions so they can get more data themselves.
Where it gets a little more tricky is in the exact parameters that are set up on modeling and list creation among co-op members. For example, Santaite points out that multichannel marketing can blur the lines on what names are considered to be of equal value. If a company that's already participating in the co-op wants to start an online pet supplies business, can it get access to a pet catalog's customer names?
Phil Wiland, chairman and founder of Longmont, Colo.-based Wiland Direct, a firm that offers a closed cooperative database for catalogers, expands this issue to retail vs. catalog names. "Is it fair to catalogers," he asks, "to rent their names to retailers when the retail channel takes away from catalog sales?"
The cardinal rule of cooperative databases, Wiland adds, is that limits are placed on the number of names that can be used for modeling and rental based on the number of names a member contributes to the co-op. Typically, each member is given a multiple based on its contribution level and a timeframe in which that multiple can be pulled.
"In my opinion, that protected the larger mailer from having its file used in huge volume by small competitors who really didn't have enough names to provide value commensurate to a large mailer," says Wiland.
The most extreme example of this point is that of a start-up company wanting to join a co-op, he explains. It would have very few names to submit in the beginning, so participating would allow it to build its business more easily on the backs of the other members. Along the same lines, Wiland cautions co-op members to find out their co-op firms' rules on existing members launching new products/titles with names from the co-op.