German List Market Differs From U.S.

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Several similarities exist between the U.S. and German list markets. Both markets are well developed. Though smaller in size, the German market offers a range of consumer and business lists for direct mail, package insert and e-mail marketing. The main difference is telemarketing, which is restricted by German law.


Like the U.S. market, Germany has compiled list sources such as household databases, survey lists from questionnaires and response lists generated from the direct marketing efforts of the list owners. Penetration levels of compiled business and consumer lists are on par with that of the U.S. market. What isn't available are credit bureau files for prescreened offers.


German lists also have similar segmentation capabilities. However, the scope of the selections is limited and varies list to list. You can select by gender, recency and even product type. You also can select based upon government statistical data.


However, this information is aggregated to a geographic level much like our census data. Large compilers also have created their own schema, such as five household units or 70 household units. Segmentation between the West and former East Germany is important because of the variation in income and unemployment rate.


The German post office, Deutsche Post, has a change of address file just like our NCOA program. However, restrictions exist regarding marketing applications. For example, you cannot create a change of address list segment using the Post Address system. Germans can opt out, and more than 10 percent of the population does so.


Where the German list industry differs most is in the use of terminology, privacy regulations, data card information, pricing/broker commission policy and research tools.


Unlike in the United States, the term list broker can mean a list broker and a list manager. With more than half of all lists marketed internally by the list owner, the lack of a centralized research tool such as the SRDS and mIn makes your work much more difficult. Further complicating the process is the concept of multi-exclusive list brokers. A list owner can give the marketing of a list to more than one company, and since most lists are not marketed under the name of the list source, you could rent the same list several times from different list brokers (acting in a list management capacity) under several different names.


Brokers must work harder for information about a list in the German market. For many list owners, the data card does not publish all of the possible selections. The process of rental and negotiation makes the cultivation of direct relationships with some list owners imperative. The penchant for secrecy, driven by the data privacy regulations and competitive concerns, results in data cards that provide little information for mailers that require a high degree of segmentation.


Often the data card shows the total number of names (referred to as addresses) and no recency selections, though the trend here is more toward the U.S. model. Forecasting can become especially difficult with no published update cycles. Most lists are updated once or twice per year, but not always at the same time. Some list owners' 12-month hotline is actually 13-24-month names and even 24-36-month names under U.S. standards.


Data privacy drives what is available and what is published to the general market. The European data protection laws have the German laws as their foundation. Data protection laws are more standardized and restrictive. State law can supersede federal law in Germany, making the rules about the collection, access and use of data more restrictive. For example, the DDV, the German DMA, has a standard that mailing files may not be saved longer than six months. This means that you could remail the same names more than once within a 12-month period.


Many EU member countries have yet to harmonize their federal laws with that of the European Union. Germany has been pushing for country of destination standard for e-mail marketing. Currently, the EU standard is country of origin. Outbound telemarketing to consumers without consent is prohibited in Germany.


Net name policies differ. Many lists are quite small in size. Some lists I use generate only 15,000 to 20,000 addresses annually. Generally, a net name arrangement is offered for a minimum order quantity. The standard arrangement is 70 percent to 80 percent. Negotiating better arrangements can be difficult.


Broker commissions also vary. If you are a member of the German list council of the DDV, you are entitled to a 20 percent broker commission from other members, unless the list owner has a lower arrangement with the exclusive or multi-exclusive broker that markets their list. As an Auslaender, a foreigner, I receive only 10 percent or 15 percent broker commission from some list owners and list brokers.


Like anything new, you need to learn the rules and terminology to succeed. Never forget the golden rule: all markets are local.


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