List Market Grows Despite Lack of New Files
"There is certainly a lack of new lists that are hitting the marketplace," said Andy Ostroy, chairman/CEO of ALC of NY LLC. "I would say that the biggest area of growth this year was the dot-com companies using our Internet buyers at postal address files as well as our core lists."
One such online retailer was women's sportswear site Lucy.com, Portland, OR. Lucy.com launched its print catalog in the fall and began testing direct mail files right away.
"With the launch of our catalog, we did a lot of prospecting on all types of lists," said Laura Hancock, direct mail manager at Lucy.com. "We tested catalog files, publishing files and Internet buyer files."
Many of the files worked well, Hancock said, and Lucy.com will continue testing new files and mailing its catalog.
However, while the dot-coms that ventured into direct mail had plenty of files to test, traditional direct mailers did not have it so easy. A lack of new buyer lists forced direct marketers to look at files they may not have considered in the past.
"The lists that won out were the ones that had enhanced selects," said Chris Montana, senior vice president of list management at Mokrynski & Associates Inc., Hackensack, NJ. "They capitalized on out-of-category growth [because of] increased selectivity."
Enhanced files allow mailers to tap very specific segments of lists that cannot be reached on files without enhancements, according to Montana.
"Buyers are key for direct marketers, but many mailers also need the ability to target by demographics and lifestyle data," said Ray Schneeberger, senior vice president of list management at List Services Corp., Bethel, CT.
Because of market demand, Schneeberger said, LSC expanded selects on its databases to accommodate mailers.
Another avenue for mailers was participation in Experian's Z-24 cooperative database.
"A lot more mailers are making their names available through Z-24," said Linda Thompson, director of catalog list management at Millard Group Inc., Peterborough, NH. "It gives mailers more opportunities to use files that would not work without the Z-24 enhancements."
Even compiled lists, which have never been a favorite with most direct marketers, have enjoyed new usage over the past year.
"The lack of quality, high-volume, new lists renewed mailers' willingness to look at compiled lists," Ostroy said. "There are few other resources for new universes of names that continue to grow."
Of course, the compiled files with the most targeted selections fared best, Ostroy said.
However, the hottest new source of names this year was Internet buyers at postal address.
Over the past year, many established catalog and publishing postal list owners put their Internet buyers at postal address on the market and boosted their list rental income.
"It has been a very profitable venture for list owners," Thompson said. "In general, list owners are getting 70 cents to $2 per name for their Internet buyers at postal address."
The names are especially appealing to mailers because not only are the prospects on the Internet, but they also are known buyers.
"Opt-in Web buyers at postal address are much more qualified as leads than nonbuyers at e-mail addresses," Schneeberger said.
In general, the opt-in e-mail lists available now have not appealed tremendously to traditional direct mailers and most have been slow to offer their customers' e-mail addresses for rental.
"E-mail is an area that is still being looked at quite cautiously," Ostroy said. "For most, it's still the next thing."