Broker Roundtable: How Have Cooperative Databases Changed?
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: How has the role of cooperative databases changed, and how do you anticipate it will change further in 2011?
Our current panel includes: Michael Kertelits of RMI Direct Marketing Inc.; Lee Kroll of Kroll Direct Marketing Inc.; Rachel Mercer of American List Counsel and Michael Peterman of Veradata. (Would you like to be considered to be a member of our roundtable? Contact Larry Riggs at [email protected].)
Michael Kertelits, account executive, RMI Direct Marketing Inc.:
Cooperative databases have recently become a more entrenched part of organizations marketing plans. As all organizations contend with the needs to find better quality prospects, higher postage and mailing costs, co-ops are becoming a more readily available and cost-effective alternative to other direct response sources.
Leland Kroll, president, Kroll Direct Marketing Inc.:
The market is changing and cooperative databases must as well. They need to add the multi-channel aspect of email and mobile to the mix. This is not an easy nor an inexpensive task. Each record needs to be properly opted-in, and privacy policies reviewed and evaluated in order to be fully compliant.
We should also consider the next iteration. We need to embrace the large online network databases that are aggregated and updated on a daily basis as the cooperative databases of the future. Some of these huge databases are comprised of tens of millions of records that have upwards of 8,000 referring URL’s contributing invaluable consumer information.
Rachel Mercer, senior vice president, data acquisition, American List Counsel:
It has been interesting to watch the evolution of co-op databases over the last few years. The co-op landscape itself has become more competitive. With mailers cutting back on their prospecting efforts, the co-ops have responded with new multichannel products as well as a renewed effort to become the sole source of prospecting names for their clients. In addition, they have leveraged their knowledge of the industry with client transactional data for mailer’s reactivation efforts.
Clients are asking what their company’s participation in the co-op does for their business While it is true there are very few unique mail order buyers, the information provided by any given company does provide significant recency-frequency-monetary value (RFM) and channel value to the co-ops and other mailers. Mid size and larger catalog companies are focusing on those co-ops which continue to provide them with successful results and pulling out of others. For small and niche catalog mailers, co-ops continue to be a primary source of prospect names, as they are able to isolate pockets on their databases that can be cost-prohibitive for these mailers to find through traditional list rentals.
Moving forward, I see a couple of trends. As the co-ops combine efforts with compiled sources such as Epsilon and KBM Group they are providing aggregated transactional data that can be utilized in modeling of compiled data. This allows the co-ops to prospect to industries outside of retail and catalog and offer more robust models. And Abacus has responded with an aggressive push of their FastTrack solution.
Michael Peterman, CEO, VeraData:
Privacy legislation is a potential threat. Co-op databases can help to aggregate large pools of buyer data in the event traditional sources are somehow discontinued—a potential reality at some point in the future. Outside of this, co-op databases have played a larger role in assessing and predicting a household’s purchasing propensity. Many of the so-called compiled attributes designed to provide detail on a person’s economic health are based on many factors, some of which are inferred or derived from neighborhood information and algorithms. Co-op databases look at real life, up-to-the-minute actual spending behaviors of consumers. These are now, more than ever before, critical to predicting response behavior to increasingly expensive direct mail campaigns. Co-op databases are likely to expand into channel specific buckets—mail, e-mail, mobile, etc. and may branch out to include social network behavior like [CEO] Mark Zuckerberg tried to implement with Facebook a year ago.
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