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Behind the Decline in List Pricing

Proliferation of user data and internal improvements in prospect targeting have contributed to across-the-board declines in list prices.


With supply at an all-time high and companies better than ever at identifying which prospects they should target, there’s a two-pronged sword deflating the value of data.

Add to that the recent history of rising direct-mail costs and you’ve got declines across the list business.

Thirteen of the twenty indices compiled by the most recent Worldata List Price Index (LPI) showed declines year-over-year. Of the seven that increased, only one improved more than 2 percent. Conversely, prices in nine classes went down by at least 2 percent.

Increased competition has a lot to do with it, according to Eric Podewell, circulation manager at b-to-b publisher Health Forum.

“You’re seeing more and more companies starting to sell email addresses,” Podewell says. “A lot of them have always refused to do that, concerned with keeping them private, but I think companies are realizing that they’re losing potential income. People are going to be giving up their emails anyway, so why not sell your emails as well?”

Podewell is right that it’s become a trend. In fact, the practice has become so widespread that it’s begun to significantly devalue the information as supply outstrips demand.

Among the categories covered in the LPI, permission-based consumer email is now the least expensive at $74 per thousand names. That price represents a $7, or almost 9-percent, decrease year-over-year—more than double the drop of the next closest category. Drops occurred in the other email classes as well however, as b-to-b, consumer, domestic and international took hits.

While the severity of the drop in consumer email value was aided by the “surge of available data” brought on by the recent election cycle, Worldata points out, the sector has seen declines in each of the past three years.

Working Smarter With the Names You Already Have

That’s part of the reason some publishers still haven’t given in to the pressure to sell their consumer email lists.

Instead, says Charlie Swift, vice president of marketing analysis and operations for Hearst, companies are increasingly looking for solutions internally.

Exchange volume is up among publishers like Hearst as pure rentals have declined; improved prospect targeting models allow for more accurate, more efficient buying. Above all though, it’s about leveraging existing relationships with customers.

“Those who read magazines are likely to read more magazines,” Swift says. “You know more about your own customers, so the desire to go buy outside lists diminishes if you can improve the performance on customers you already understand. We continue to invest in better understanding those names that we already have a relationship with.”

While the list business hasn’t turned to multichannel buying and selling yet, the spread of devices is only going to exacerbate the trend. More access means more data.

For Kurt Martin, group publisher at b-to-b pure-play Progressive Media Group, the future was once (only a few years ago) in email lists, a “founding principle” of the company. Though he still believes in the value of email, now, he says, “mobile and tablets are the primary drivers in our strategy moving forward.”

“Subscription-based models are promising in the potential for data they can accumulate,” Martin says, noting that his group was quick to adopt the new distribution channels. “Once we get enough momentum for sub-models, content walls, paid access—that’s where you’re going to gain the most information on the data side going forward. Are people going to be okay with that though? We don’t know.”

 


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