Assessing Impact of List Legislation

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A private matter has become public in the direct marketing sector.


Seasoned list brokerage professionals now face the creative challenge of replacing potential lost name populations. Because of government regulations and the public's preoccupation with privacy issues, the list community is forced to re-evaluate mailers' allocation of names from both compiled and traditional list sources. Politicians, the media and the controversial issues involving the Internet threaten the free flow of information that the list industry has enjoyed.


Strict federal and state legislation is affecting the use of driver license information, telephone marketing, marketing to children, credit bureau data, full disclosure of sweepstakes rules and regulations and, now, Internet tax collection threats.


List brokers need to be at the forefront of the information channel to help educate their mailers on the expanding range of legal and regulatory concerns. For example, it is important to understand the ramifications of H.R. 10, the Financial Services Modernization Act, and the proposed Gramm Leach Bliley Act. According to the Direct Marketing Association, these provisions will allow financial institutions to share selected customer information with third-party marketers once customers have been notified and given the opportunity to opt out of that exchange.


The DMA booklet "Compendium of Government Issues Affecting Direct Marketing in 1999" says, "This comprehensive banking legislation eliminates the Depression-era fire walls that have long separated banks, brokerages and insurance companies and allows companies to cross-sell various types of financial products." If consumers choose to opt out, information available to direct marketers will decrease. Therefore, it is critical for your list professional to assess your vulnerabilities and potential loss of list universes immediately.


Steps to replenish potential lost list universes include:


• Review list families. Determine aggregate lists and whether they are owned by a corporate entity, such as Time Inc. If List A is performing successfully, consider testing similar lists within the corporate list family. In addition, review all segments being offered on the data card and consider testing. Negotiate corporate pricing for all lists that belong to that family. Therefore, you are leveraging the existing relationship between the end-user and the list owner.


• Expansion of core lists. Review all profitable list segments and determine whether any of the successful demographics can be expanded. Once determined and successfully tested, your list universe should open up substantially. Because of the proposed legislation to limit the use of age and income data for non-preapproved offers, it is essential to test the largest broad-based segment without the demographic data as well.


• Questionnaire source files. Self-reported data by the consumer are an effective replacement tool if the proposed legislation is passed. List rental files for this purpose include Experian's BehaviorBank, Polk's Lifestyle Selector and TargetSource. Ask psychographic and demographic questions targeting consumers' purchasing behavior. These very large files offer endless possibilities for expansion by combining powerful lifestyle data. In addition, the mailer has the ability to sponsor a question and exclusively rent the names generated for up to 18 months.


• Recency band testing. To expand list universes, it is essential not only to use the most recent names available but also to consider back-testing older names. These names can be purchased at substantially reduced rates. In addition, these names could prove to be equally as responsive as the newer names, since these consumers have not received mail as frequently. Another benefit in testing older names is that your mail piece will stand out because it will not be mingled with your competitors' offers at the same time.


• Inactive list rejuvenation. Former core lists that are no longer being used as part of your mail plan should be revisited semiannually. You need to assess why core lists have fallen out and retest wisely. Your list professional should maintain a rolling database consisting of inactive files coded as follows: better pricing needed; new segment needed; results unacceptable; and miscellaneous with explanation.


• Adrea J. Rubin is CEO and Linda A. Sandler is president of Adrea Rubin Marketing Inc., New York, a list brokerage and management firm specializing in the financial and insurance arena. Rubin's e-mail address is adrear@adrearubin.com, and Sandler's e-mail address is lindas@adrearubin.com.
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