DMCNY: The Two Decile DilemmaNEW YORK -- Database modeling has been a boon for the list industry and direct marketing, but reliance on top-tier names yielded by models has taken a toll, according to a panel of list executives here yesterday. The panel addressed attendees of the Direct Marketing Club of New York during a luncheon at the Yale Club.
"We model everything now, and we seem to be mailing only the top two deciles, so every campaign is prejudiced," said panelist Rosemarie Montroy, chief marketing officer at Direct Media Inc., Greenwich, CT.
Of course, modeling is done on mailer house files and large, managed databases on the list rental market. But much modeling also is done within cooperative and private databases, too, which many mailers have embraced.
Panelists Brian Manning, vice president of sales at Statlistics, Danbury, CT, and Michael Fishman, vice president at Specialists Marketing Services, Weehawken, NJ, said they have seen increases in these types of databases in the market and interest in them from their clients.
Often, the mailing of the upper deciles of models has resulted in excessive mailing of the same names, another panelist said.
"There has been a decline in the effectiveness of some of the models that is most likely due to the increased volume and the same segments getting mailed over and over," said Elissa deBrito, president of ParadyszMatera, New York.
Manning agreed, adding, "Test, test, test. Lower deciles may actually work better."
Montroy revealed a development in the co-op database space: Direct Media's catalog tracking service has uncovered catalog titles that may not be widely known to the industry because they are mailing exclusively through co-ops. Co-ops are finding small, niche catalogers and using them to build their own businesses while assisting the catalogers, too, she said.
Though co-ops and other collaborative databases provide opportunities for small mailers, deBrito said, sometimes the opportunities come at the expense of other list testing. Still, panelists agreed that list professionals all should consult with their clients on using co-ops.
When asked whether the industry had grown too cautious, Montroy noted that costs are up across the board for mailers including in the list arena.
"Lists used to be the cheapest part of a direct mail campaign," she said. But what now starts as a $100/M list order can end up costing $500/M due to the low nets.
Of course, it wouldn't be a list discussion without mention of privacy issues. Panelists agreed they are better versed in the ethics and regulatory side of the business. List brokers and managers have had to scrutinize client offers.
"Privacy is everywhere in the media, and we have to be very careful about how we sell names," Montroy said.
Even so, list professionals must walk a fine line when advising clients on privacy and legal matters.
"We are proficient and educated in many areas, but we are not attorneys," Fishman said. "We do hold ourselves accountable for knowing what's going on."
Consumers also are savvier about the process and the role of list brokers, Manning said.
Vigilance by the industry may help avoid further regulations.
"The more we do, the less legislation will be passed," deBrito said.
The panel discussion was moderated by Chris Montana, senior vice president at Mokrynskidirect, Hackensack, NJ.