U.K. Travel Advisory

Planning to enter the British market? Don’t count on the abundance of mailing lists you’re used to in the United States.

Prior to 1994, there were 3,419 lists on the market in the United Kingdom, according to one source. Today, because of mergers and acquisitions, that number has dropped to 2,880, 70% of which are consumer lists and the rest business-to-business.

And the counts-at least for response lists-are smaller than they are in the United States, averaging from 100,000 to 300,000 names per file. At the same time, the cost per thousand is high. And hotline names are virtually unknown; data processing services are so expensive that list owners can’t afford to update their files regularly.

“It’s antiquated, they’re still back in the Dark Ages, but there is a glimmer of hope,” says Florence Leighton, senior vice president, international list brokerage for Acxiom/Direct Media.

The good news?

The files can be “extremely” responsive, according to Adrian Batt, marketing director for DMS, a DM agency in England.

Why is this so?

The average person living in the United Kingdom has handfuls of disposable income to spend, but receives only about 55 pieces of mail per year compared with up to 2,000 per person in the United States, Batt says.

“People aren’t inundated with direct mail,” agrees Suzanne Lewis, director of list brokerage for HLB List Brokerage, London. “They won’t have seen the same offers over and over from the same places.”

Response tends to be 25% higher than in the United States, Batt continues. But Leighton warns that there’s a downside.

“When you first go into the market with a new product, yes, the responses are very encouraging, but then they settle down like anything else,” she says.

A number of factors contribute to the apparent backwardness of the U.K. list market. For starters, list owners place less emphasis than their American counterparts on rental revenue as a source of income. Also, there is a fear that response rates will be cannibalized if the list is put out to market too often. And, of course, strong data- protection laws require that data is used according to a narrow definition of its original purpose.

But rental revenue is starting to look more attractive as U.S. mailers like American Family Publishers (called British Family Publishers in the United Kingdom) Publisher’s Clearing House, Rodale Press, Lands’ End and Eddie Bauer establish themselves in Europe.

“List rental revenue is not a part of the original thinking on the bottom line for many British companies, but some are starting to realize that there is money in the rental business,” Batt says.

Another problem is that direct mail is expensive in the United Kingdom (and throughout Europe in general). All costs are higher than those in the United States-including computer processing, postage, print, production and list costs, which range from $130 to $215 per 1,000 names.

Despite all this, observers say the U.K. list business is more sophisticated than those in France and most other European countries.

“They are catching up in the United Kingdom,” says Chris Page, vice president-international at List Services Corp. “You still can’t get a 30-day hotline or $50-and-over spenders, and the commission structure is not as clearly delineated. But U.S. influence is rapidly dragging them toward the quality of business we have here.”

Though most are small in number, U.K. lists do come in several varieties, adds Chris Morris, managing director of Abacus Direct England.

As described by Morris, each has its own strengths and weaknesses:

* The electoral roll, or voter’s register, offers critical mass but poor targetability.

* Lifestyle lists provide high volume and are reasonably well targeted.

* Affinity (or response) lists offer low volume but are highly targeted.

Abacus Direct England, based in the London area, will start offering names this month. Its new U.K. database features information collected from 44 million adults in 23 million U.K. households.

“There is a big demand in the U.K. market for a highly targeted, large volume data source,” Morris says. “Direct mail has grown 12% per year for the last 12 years and is projected to continue that way over the next 12 years.”

Abacus used the electoral roll to build the file, which was overlaid with demographic and lifestyle data mined from 50 million household surveys and product guarantee cards, and transactional data derived from U.S. and U.K. catalog companies that trade in the United Kingdom.

At deadline, Abacus had verbal commitments from 30 American and British companies interested in participating in the members-only database alliance.

“Managers and brokers often take on the same role and list commissions are similar to U.S. standards; list owners command 30%, brokers 20% and managers 10%,” HLB’s Lewis says.

Some lists are managed exclusively, which may prompt managers to push those lists because it’s in their best interest to broker them as often as possible, Batt cautions.

He recommends choosing several brokers who know the entire market.”It’s like any industry,” Batt says. “There’s good and there’s bad.”