How Cooperative Are Co-op Databases?
Recognizing that these issues are important to direct marketers, co-ops are working to address concerns about competition.
Rick Witsell, vice president, marketing at Alliant Cooperative Data Solutions, a cooperative data analytics firm in Brewster, N.Y., notes his firm's policy is that it won't create a data variable for use in the database or models unless at least three companies contribute that information, that way no one company is supplying other users with unique data. And, he adds, no contributor gives more than 50 percent of the data for any element in the base.
Save for the open co-op it runs with MeritDirect, Experian manages several B-to-C co-ops that are private. Even when it comes to b2bBase, Nicole Bartholomew, product manager, cooperative databases at Experian, a direct marketing data and services provider, with headquarters in Schaumburg, Ill., pointed out during the DMA•05 session that base participants are not allowed to specify which companies' data they want to use for analytics; selection is done by data category alone.
Bottom line: Before you sign on the dotted line, spell out your competitive usage limitations in clear terms.
Question No. 2: How Easily Can You Change Your Participation Status?
Another question to answer is that of data ownership: What happens to your data if you decide to withdraw from the co-op? Santaite has seen marketers listed as database participants, even when they haven't contributed customer records for years. Her main concern is that clients' data is never fully withdrawn from the database because the models have been built with this information.
Witsell explains that any models being created by co-ops should be so robust that their performance is not impacted if some contributors pull out of the base.
At Abacus, says Hawes, "If a member decides to cease participation, their data remains on the database but is inactive and is not included in other participants' models." She adds that Abacus can purge that member's data from its database, at the member's request.