Broker Roundtable: Dealing with a Shrinking List Universe

By Aug 29, 2011

Welcome to Broker Roundtable, where each week we ask list brokers to give their opinions on issues that matter to the marketing community. This week's question: Is the list universe still shrinking and what should be done about it?

Our panel includes Tom Fleming of American List Counsel, Matt Kaiser of Veradata, Lori Kelly of DirectMail.com, Barbara Salles of Statlistics and Michele Volpe of Media Source Solutions. Would you like to be considered to be a member of our roundtable? Contact Larry Riggs (larry.riggs@penton.com).

Tom Fleming, senior vice president of list brokerage at American List Counsel:
Yes, list universes continue to shrink. With that said, clients still need to grow and increase their numbers of new customers. To do this, we must stretch our circulation plan. Add more lists into each plan, without jeopardizing response. This means getting creative with our circulation plans; going deeper and opening up new segmentation on our top performing lists, along with tighter segmentation and modeling applications on our secondary list categories, new list testing, and reactivation segments.

Matt Kaiser, executive vice president of Veradata:
This is a tough question because the actual universe is growing and the amount of information we have as marketers is expanding. The biggest problem is fear and legislation resulting from the comparatively small number of unscrupulous marketers who abuse private information. It's a case of the few ruining it for the many.

I believe we should redirect the effort used to fight privacy regulation and focus on pursuing the real abusers, levying very stiff fines and perhaps more serious criminal prosecution. List shrinkage is a function of abuse, cyber crime/identity theft and the fears that this instills in the consumer. If marketers used the intelligence available to them to really customize offers and select the right audience to pursue, we wouldn't be in this place. Too many people, I think, don't understand the impact of their actions. From the abusers to the complainers to the miscreants, the ultimate downstream effect is overregulation, hyper restrictive privacy policies and a paradigm shift in how data will be sourced. I can go on and on about where I think this will end but it starts with a "G" and ends with "oogle". If we don't get our arms around these challenges, we're in for a change.

Lori Kelly, list manager/broker, DirectMail.com:
While I haven't noticed a decline in the universe of prospecting lists, there is reason to believe that customers' house lists may be shrinking due to events that happened a few years ago. At that time, economic fallout prompted charities to reduce mailing to their donor files. Files became stagnant and donor base growth was stunted, yielding an overall shrinking universe of names.

I have noticed an increase in selects that help finetune a large universe into a more targeted list. Many clients prefer to mail to smaller, highly targeted lists as compared to making a saturation mailing. They find it benefits them financially and helps them to be more knowledgeable about current customers and new prospects. It is more important to concentrate on the quality of a list rather than the quantity.

Barbara Salles, marketing director, Statlistics:
Marketers in all categories are struggling with smaller universes, more targeted selections, and the relative lack of new properties to the list rental marketplace. Marketers now must be disciplined to retest other segments, like lapsed or expired names.

Michele Volpe, vice president of sales and marketing, Media Source Solutions:
Unfortunately, I believe that the list universes have not bounced back from the steady decline we have seen over the last several years. I don't think the future is as dismal regarding the availability of new names. It's my opinion that the decline has not been as steep as it's been and may have leveled out a bit. For many mailers, they have exhausted their supply of multiple buyers. This has caused them have run out of what once was an inexpensive source of prospecting names. Increasing postage and paper costs are not helping the direct mail industry either.

How do we solve this matter? I believe that if mailers would be more open to using compiled files on a consistent basis, it would go a long way to help dig them out of what has become a very large hole. The traditional sources, like direct-to-publisher and catalog buyers to give a few examples, have been hit so heavily it has driven down response rates. You can only mail to the same name so many times. Adding in direct response compiled file data to the mix will not only expand the mailable universes, the resulting customers that are acquired will help start the rebuilding process of for list universes. And this means they have been converted into buying customers.

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