List Firms Move Deeper Into Online Lead Generation

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The mantra "it's just another channel" that rolled off the tongues of many list professionals when discussing e-mail and the Internet during the dot-com bust has returned amid the buzz about online lead generation and search engine marketing, according to several list firms.


"The online channel is proving itself out as another direct marketing channel where you test it, you measure it and you adjust," said Sam Young, Internet services manager at Millard Group Inc., Peterborough, NH. "It has a lot of bells and whistles and it's pretty darn cool, but ultimately it's another direct marketing channel."


Young spent 10 years with cataloger PC Connection, a reseller of computer hardware. While there he moved from sales to product management to launching the firm's online marketing efforts. Though Young joined Millard in October to develop customer acquisition and revenue generation opportunities in the online channel, Millard launched its interactive division in 1999.


Most traditional list brokerage and management firms have been involved in e-mail list management and brokerage and other Web marketing for years, but their online lead generation efforts seem on the upswing amid all the hype about search engine marketing. Client demand is the overwhelming reason for the renewed push in these areas.


"We're not moving into the lead generation space because we are giving up on the traditional lists, but because we can do it well for our clients and it complements what we already do," said Michael Cohen, general manager of brokerage for Walter Karl Interactive, a division of Walter Karl, a Donnelley Marketing Co., Pearl River, NY.


The firm began its interactive division in 1999. Since then, parent company infoUSA has added Yesmail and Edith Roman with its e-PostDirect division to its Donnelley Marketing Group.


"It's a case of a company keeping an eye on what their clients want and moving in that direction as a natural progression to offer products that grow out of our core competencies, which are databases and leveraging lifetime value," Cohen said.


Another list professional agreed with Cohen.


"With a good chunk of mailers' customer relationship marketing and acquisition efforts shifting from offline to online, we need to offer products and services to help them succeed," said Ed Bocknik, executive vice president in the eCommerce Services unit of Direct Media Inc., Greenwich, CT.


Direct Media launched subsidiary interactive division DirectMedia.com in 2000, but rolled it back into the organization the next year.


"It gets back to the core of what we do for a living, which is acquire new customers for our clients at the lowest possible cost, and we maximize the revenue potential of their most prized assets, their customer file," Bocknik said. "The cost-effectiveness and immediacy of online marketing are too great to ignore."


Cost benefits and speed are two things the Web offers when it comes to leads.


"Think of traditional mail, where a mail piece from soup to nuts will cost you anywhere between $500-$600/M," said Matt Koenig, vice president, interactive marketing at List Services Corp., Bethel, CT. "We provide opportunities that might be more nominal in cost or on a pure performance-based cost-per-acquisition or cost-per-click model."


List Services Corp. Interactive was started in 2000, and Koenig assumed his position in the division this month. He previously was vice president of the firm's computer services team.


"If I put an offer up on the Web this afternoon, I will have orders in hand tomorrow morning," he said.


However, no one in the list industry seems to be tolling the death knell for postal direct mail or is even fearful of it happening. The biggest buzzword may be "multichannel."


"I really am a pragmatist about the online channel," Young said. "I think that there is a lot of good opportunity there, but don't think it's by any stretch of the imagination a replacement for what a marketer can source offline. The amount of traffic that is driven to Web sites by print pieces, catalogs in particular, puts an exclamation point on that."


A typical cataloger sees 30 percent to 50 percent of its transactions online, he said, but a good portion of that business is generated through a postal campaign. Reducing direct mail in favor of online marketing might result in less Web traffic.


"That's why match back and multichannel analysis has become so important," Young said.


The connections are undeniable, Cohen said.


"My background is traditional mail, and ... online lead generation and e-mail marketing go hand in hand," he said. "When you marry them with postal you are going to see a bump."


Among the online lead generation services these firms offer are e-mail, banner advertising, co-registration, affinity marketing, strategic partnerships, performance-based opportunities and search engine marketing.


In search engine marketing, list firms are taking different approaches. Millard and Direct Media partnered with firms that specialize in search. Millard works with @Web Site Publicity Inc. to meet its clients' search engine marketing objectives.


"The only way to really be effective is to work with somebody who is an expert in that space," Young said. "You can bring somebody in to solely focus on it, but unless you have someone who is really networking in the industry and has consistent relationships with the search engines and is running campaigns for clients and learning what's working there, I think that you are doing yourself a disservice."


Direct Media partnered with at least three search firms: The Worx Group, SuccessWorks and Your Amigo.


"Search is the hottest topic these days, and ideally we'd like to develop a solution perfectly suitable for traditional direct marketers," Bocknik said. "However, the technology and search engine landscape changes so frequently that, for now, we think it's best to partner with firms who specialize in search engine optimization and pay-per-click marketing."


Though Koenig guessed that almost all of his clients do some sort of search engine marketing, search is not currently part of LSCi's business model.


"We do not participate in that business as a group or a company, but we do make referrals and look out for the best interests of our clients," he said. "At this point in time we would rather focus on what we do well and deliver strong return on investment."


Taking another approach, Walter Karl is building a team of experts to serve its clients' search engine marketing needs internally. Cohen expects the service to launch soon.


"We thought that the best way to attack it was to bring in experts in the business," he said. "The key to what is going to make us different is that we are going to fully manage the process."


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


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