What Will Lists Cost Next Year?
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: What do you expect to happen with list prices next year?
Our panel includes Kathy Joslin of Statlistics, Matt Kaiser of Veradata, Kevin Kerley of Carney Direct Marketing, Wendy McLaughlin of DSA Direct and Lisa Pollack of Adrea Rubin Marketing. Would you like to be considered to be a member of our roundtable? Contact Larry Riggs ([email protected]).
Kathy Joslin, account executive, Statlistics:
Until 2007, list prices were increasing one to two times a year. Since 2008 they have been slightly decreasing and are definitely more negotiable. I would hope that they are stabilizing and that list owners continue to make pricing offers that are attractive to mailers making it a win-win for both parties. Since there will be other channels available we need to make sure lists are still economical enough to be part of the game plan. That said, I think we should all hunker down and continue with business as usual as we are in it for the long haul.
Matt Kaiser, executive vice president, Veradata:
Each dollar we earn today is 80% of what it was five years ago and list prices really haven’t seen an adjustment for inflation over the past decade. For the last 10 to15 years, specialty lists have been priced between $75 per thousand and $110 per thousand. The list price index is flat, for the most part. The one area where you can see a difference is in specialty email lists. The leaders in this group (in terms of data quality) have priced their data appropriately and are doing a good job maintaining quality of response as a result.
I think at some point, we need to adjust the prices of data to match the increases in maintenance and warehousing costs. Everything else in the suite of products like postage and paper has seen price increases but data has not. Arguably, data is the most important factor in any appeal and the power of data is growing. I think we’re going to see list and data prices increase in the coming year —specifically in the specialty list market and not so much in the compiled list market. While compiled lists have tremendous value, I think their prices will lag behind specialty list prices by a few years.
Kevin Kerley, executive vice president, Carney Direct Marketing:
I believe that published list prices will remain the same as they have over the last couple of years. With the economy the way it is now, we can no longer afford to increase list costs annually as we have in the past. We are going to need to offer deeper discounts to keep our clients in the mail this year. We must look at the selection costs and either waive them or lower the selection cap cost. On the subject of net names, we will have to start getting net/net arrangements, even on test orders. I hate to say it, but with all of the other costs associated with going into the mail, list prices are the only area that our mailers can try to save on.
Wendy McLaughlin, vice president, list brokerage, DSA Direct:
List prices will continue to decrease. Now, if things operated like the U.S. Postal Service, we’d take up prices as volume and demand decrease. But given the competitive nature of the list business, pricing will drop and deals will be plentiful.
Lisa Pollack, senior account executive,| Adrea Rubin Marketing Inc.:
Mailers will continue to try to compress list costs in 2012, especially with the new postal increase. Although the list cost is the smallest cost of any direct mail campaign, companies will try to find the savings where they can. We are finding that list owners are willing to negotiate on test orders, which is helpful to the mailer’s testing budget.
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