The List Industry Is More Sophisticated and Competitive

Richer lists are more valuable, but also more costly, making industry discounting pressures a real “double whammy.”

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Thursday, November 30, 2006

By Barbara Love and CM Staff

Richer publishing lists are more valuable, but also more costly to develop, which makes industry discounting pressures a real “double whammy.” 

Striking a balance between rich, high quality publishing lists and the downward pressure on list prices in the industry seems to be more challenging than ever.

“If you want people to open up your email, you need to be more sophisticated than ever in the lists you choose and the message you send,” says Shannon Aronson, VP, Client Services, Venture Direct. “Over-saturation continues to be a problem, but if your message is relevant and you are reaching the right audience, an email message can be very successful.”

However, according to Barry Green, VP circulation, Hearst Business Media, even getting that “right” audience is more difficult now then in the past, especially in the b-to-b market.

“The publishing list sales business has been decreasing over the last few years,” says Green, “Especially on the ‘postal’ side, since many businesses have lessened the volume of direct mail efforts they have been doing. 

“As postal costs go up and marketing budgets continue to shrink, publishers have to work harder at collecting names and more information to make the contacts count. They can segment their lists in more and more ways.

So how can publishers make their list more sophisticated and keep their prices even? The answers are not quite clear.
“The important thing for publishers is to make sure their lists are well known and of high quality,” Aronson stresses. “We’ve been saying for years that quality counts.

“An email list is most successful when it includes information on who that customer is—their age of course, but also behavior, what they read online and what else they have signed up for. Then they are monetizing that name against all avenues.”

Green insists that high value lists are the key although getting full price can be challenging.

“Nowadays, it is costlier to create the publishing files, so it is a double whammy to be allowing discounting off of the normal file rental prices. To solve these problems, sometimes holding fast to the usage allowances and pricing parameters is desired, but if the purchaser is an advertiser (or a prospective one), holding the line can be extremely difficult.”

It’s a fine line that has to be walked and the actual compromises that have to be worked out can put you on a slippery slope at times. Just because the actual furnishing of the file (or records) to the marketer does not cost real “out of pocket” expenses, the value (sometimes tens of thousands of dollars”) has to be drummed into the mind of the utlimate user.”

Also, says Green, some advertisers or large marketers have been trying to establish their own combined databases of the lists of competitive publishing companies in order to de-duplicate the lists and not have to pay full rate for multiple total lists.

They also want to get “net name arrangements,” whereby they only pay a percentage of the price of renting all records from each file.

Aronson feels that publishers have something very valuable to offer.

“In the past, publishers had an advantage because they had information many others did not have—at least the correct address, Aronson says. “They no longer have that advantage, but they still have many products of their own—print, online, events, newsletters—that provide a rich picture.”