Marketing Lists by the Megabyte

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In nearly every business sector -- from books to toys to electronics to catalogs -- the refrain heard during the past year or so has been "The Web changes everything." Now, it is our turn.


Within just a few years, there has been something of a revolution in the list business. Where there were no lists offered for download over the Internet as recently as four years ago, there are now at least eight U.S. list owners offering six national business lists and five consumer lists through various providers over the Net -- plus, at least nine U.K. based list owners representing another 2 million plus business and 25 million plus consumer records in the United Kingdom -- with more coming.


Based on revenues reported for the first quarter, InfoUSA will easily do $2.5 million to $3 Million or more in data sales over the Internet in 1999.


For the most part, we are not yet talking about list sales that have migrated from the traditional broker channel, although those are probably coming. So far, a lot of the sales are to new buyers, smaller marketers who were previously put off by the minimum order requirements imposed on traditional list transactions.


The reason for this is simple. In a traditional list transaction, the customer calls a broker and discusses a list requirement. The broker makes some list recommendations, and one or more lists are selected for further consideration. The broker then contacts the list owners or managers to run counts, which often involve a call to a service bureau. The counts are sent back down the chain. Oops! The count is either high or low and the specification must be modified. Back up the chain and down again.


By the time the first name is produced, the process may have already cost the broker and the various owners and managers several hundred dollars. Online, this entire sequence evaporates. The customer works directly with the list, plugging in various demographic and geographic requirements and doing "what if" exercises in real-time. Once the target market is satisfactorily defined, it's a matter of agreeing to the terms of use, providing a credit card number and downloading -- all in less than an hour.


Only for certain lists that involve protected data from the United Kingdom does it become more complicated. In those cases, after the list is selected, the customer must provide a description of the offer, either by fax or e-mail, then wait for permission and an access code to retrieve the list.


Now, services once reserved for larger mailers also are available on the Web. Using the technology of Qualitative Marketing Software, mailers can enhance their own lists with consumer demographic data, do phone number and reverse append, address standardization, COA, CASS and postal presort online. They can also do geospatial analysis and selection (radius and polygon) as well as straightforward consumer list selection and download through QMSoft's Centrus Online and DCMG's ListsNOW.com sites, which effectively operate as a virtual service bureau.


What does this mean to the list business? First, if you are a broker and you are not on the Web now, you had better get there, because you are already late to the party. Second, the acquisition and distribution channel for compiled lists is going to experience the same disruptions already realized in the retail channel for PCs, books and a host of other products as a result of the Internet. Brokers providing compiled list rentals will be forced to find ways to add value and position themselves in this new channel. Third, once the ground is broken by compiled lists, response lists will not be far behind. In fact, by the time you read this, the first player to incorporate response data on the business side -- zapdata from iMarket -- may be up and running.


This does not mean, however, that traditional brokerage is dead. Mailers will always need expert advice. It will be a while before response lists migrate to the Web and some never will. Web access to lists is opening up a whole New World to smaller marketers, many of whom, as they become increasingly sophisticated, will seek out experienced brokers in their search for more targeted and responsive lists. Multiple list acquisitions and merges will still require broker assistance.


Even so, as a broker, I expect the next few years will be a rough ride, while at the same time exciting and challenging. It will require some original thinking.


Gilson Terriberry is president of Direct Contact Marketing Group Inc., Grants, NM. His e-mail address is gilsont@dcmg.com.
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