What Challenges to Data Sourcing Are Compilers, and Thus Direct Marketers, Facing?
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