Holiday Sales Show Internet Taking Its Place in List IndustryWith Internet sales emerging as the big winner of the 2004 holiday mailing season, list professionals and their clients are looking to the Web as an important part of their '05 acquisition strategy while keeping an eye on privacy issues.
"I think holiday was a mixed bag where you had some companies doing well, especially the online marketers, and you had other companies that were somewhat flat," said Lon Mandel, marketing services officer at ClientLogic Specialists Marketing Services, Weehawken, NJ. The electronics category seemed down slightly, he said, while apparel was flat to slightly ahead.
Because the holiday mailing season skews toward hard-goods marketers, Steve Tamke, senior vice president at Mokrynskidirect, Hackensack, NJ, said he was not surprised that home décor and high-ticket offers did well. Through November, about 80 percent of hard-goods clients beat the previous year, he said, and December figures likely will be within a few percentage points of that.
"Holiday '04 was a good season for almost all of our clients," Tamke said. "I haven't heard about any holiday mailers having particularly soft seasons."
Though most of her firm's clients are not holiday driven, the few that are did well, said Fran Golub, senior vice president/list management at Walter Karl, a Donnelley Marketing Co., Pearl River, NY.
Looking to new name availability in '05, Golub called November file updates encouraging and hoped for more good news with December names.
"November updates had some decent hotlines, but most list owners have not updated for December yet," she said. "As consumers shop later in the season, hopefully those updates will provide even more hotline names."
The move to late-season shopping has much to do with the number of consumers shopping for gifts online, and this shift has increased yearly.
"More and more marketers are doing prospecting via the Web, and the big star of the season seems to have been paid search engine marketing," Tamke said. "More and more catalogers are catching on to that and seeing it as a viable way of acquiring customers."
Tamke does not see this as a danger to the list industry and offline marketing.
"I think it bodes extremely well for direct marketing," he said. "It's another great avenue, and the more customers clients acquire, the more money they have to spend on marketing and the more list rental revenue they will make."
The next step, Tamke said, is to figure out the lifetime value of customers acquired through search engine marketing and affiliate marketing and what type of contact strategy is best to use with these customers.
"Many mailers are in a position to do testing and lifetime value analysis this year," he said.
With postage and paper prices poised to rise in the coming year, Mandel advocated the Internet as a way for marketers to save money.
"Strong branded companies can mail smarter and cheaper to drive traffic to the Web," he said. "They can use banner advertising, space ads, radio and television. There is a lot of media that can be used other than direct mail."
He longs for the day when consumer marketers follow their business-to-business peers and put their e-mail address buyer files on the market, though he agreed that consumer e-mail is more sensitive than BTB.
"I think that consumer e-mail list rental could be handled properly through legitimate companies," Mandel said. "My feeling is that you have to crawl, walk and then eventually run, and if it takes a longer time period to get this going, so be it. But ultimately I do believe that e-mail will be a powerful acquisition tool."
Privacy concerns must remain top of mind.
"Direct marketers are still worried about privacy and possible future legislation," Golub said. "Do-not-call had a huge impact, and e-mail is under scrutiny. People are still worried about the direct mail side, but I don't think they see anything happening immediately." She said list management firms will stay cautious in 2005 in accepting orders, especially in telemarketing and e-mail.
As for offline marketing, list professionals are seeing modest circulation increases in '05 mail plans.
"The item at the top of catalogers' lists right now has shifted from survival to growth," Tamke said. He sees circulation increases for 2005 of 3 percent to 5 percent. Golub said mail plans generally are the same or better regarding quantity, especially for tests.
Mandel said that the list industry must adapt to the changes of the past few years.
"It may not be a volume game anymore," he said. "It might be a matter of getting paid for value-added services such as modeling. The ability to take lists that are marginal and create models will help mailers to be able to use more names."
Kristen Bremner covers list news, insert media, privacy and fundraising for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters