InfoUSA, MeritDirect Tout DatabasesInfoUSA and MeritDirect are banking on the quality of their business-to-business databases though the two no longer have a business relationship, according to executives from both companies.
Omaha, NE-based infoUSA said June 16 that it was no longer participating in MeritDirect's proprietary cooperative prospecting database, MeritBase, in favor of being the exclusive enhancement provider to its Edith Roman subsidiary's Business Response Alliance Database.
MeritDirect has added Experian's National Business Database in addition to the D&B data that it has had all along. MeritBase has more than 1,000 response, publication and compiled lists that the company has assembled on behalf of its brokerage clients. Outside brokers cannot access the database, though the individual lists are managed by various list management firms.
BRAD is a BTB database made up of 963 response files including catalogs, publications, book buyers, seminar/conference attendees and association members. It is open to all brokers upon approval of the mail piece. Edith Roman, Pearl River, NY, manages all the files within BRAD.
In an interview with DM News, infoUSA chairman/CEO Vin Gupta said BRAD is similar to MeritBase except that mailers cannot select by individual lists within the database.
"The difference is on Edith Roman, you cannot specify whose list you want," Gupta said. "In BRAD, you cannot say, 'I want the list of Myron Manufacturing customers.' You can only take the names they have in the warehouse and select them by demographics or by job title."
Still, Gupta said infoUSA did not drop out of MeritBase to make BRAD a more appealing file.
"The bigger concern was that in MeritBase, the members who had circulation lists, they were getting paid like $150 per thousand," he said. "The response names they had, they were getting paid about $150 per thousand. And then when they were renting our names, they were charging $40 per thousand, and we believe that our database is as valuable as response lists or the circulation lists.
"The problem comes from like 30 years ago. Thirty years ago, everybody used to say, 'Oh, compiled lists are from Yellow Pages and they're not worth very much.' But that has changed. We used to get names from Yellow Pages and that was it. Now we verify every record. We find how many employees they have, how many PCs they have, how many square feet they have, do they own or rent and who are the key executives. So it's not just a plain compiled list. It's basically a very valuable database where information is gathered from a lot of different sources. And it's not that $40 a thousand or $60 a thousand property anymore. Our customers pay us on the average $150 a thousand, and they're very happy. So we just could not afford to sell our database on MeritBase for $40 a thousand, and then we had to share that money with everyone else."
Gupta said infoUSA lost business when its customers bought their names through MeritBase as opposed to directly through infoUSA.
"I think our database was in MeritBase for about four years, and we could see a drop in revenue from some of our customers who were just buying from MeritBase," he said.
MeritDirect's view of the situation is a bit different.
"The compiled list market is a buyer's market, and most compilers are not charging response list prices," said Ralph Drybrough, CEO of MeritDirect, White Plains, NY.
He said that the market ultimately will decide whether a database like infoUSA is really worth the same as a response list.
"For many of our mailers, even at the pre-price increase rates, straight selects on compiled files do not provide a sufficient return on investment," said Blair Barondes, senior vice president of database marketing services at MeritDirect. "It's the database selects that make these files profitable."
Being able to select on the individual list level was key, Drybrough said.
"You don't lose your analytics by list, and that's the most predictive component of whether a list is going to work for you on an ongoing basis," he said.
Tomorrow, DM News will feature more of our interview with Gupta on his rationale for taking infoUSA private and related topics.