Brazil's List Business Takes Off Amid DM Boom
"We plan to add three more companies to our partnership, bringing the number to eight including our parent Abril," Paulo Vasconcelos, Datalistas' managing director, said. He was here to attend the DMA conference.
"The way we look at demographics, Brazil has 600,000 rich people, an economically active middle class of about 6 million and another 23 million in an emergent middle class.
"These are people who are beginning to be economically active. They may buy a refrigerator, a washing machine or a car and pay for them on the installment plan. Taken together this is a huge pool of money."
Datalistas, Vasconcelos said, is heavily weighted towards A and B names and doesn't have enough C names - the emerging middle class. "So we started a data partnership with a leading company in each economic segment," he said.
One is C&A, a Dutch-based apparel merchant, the largest in Brazil and Argentina and a major player in the UK. It has 7 million names on its Brazilian database, most of them drawn from the emerging middle class.
The other "data partners" are Gradiente, the largest manufacturer of TV sets, CD players and other electronics and Pao de Acucar, one of Brazil's two biggest supermarket chains.
"We're closing a deal with Fiat," Vasconcelos said, "and they control 30 percent of the automobile market in Brazil. And we are looking for companies in three other consumer segments to complete our database."
Datalistas started out with 12 million names, garnered largely from the various house lists of Abril, Brazil's largest publisher. Its weekly news magazine, Veija, is the world's fourth largest with a circulation of 1.3 million.
"The thing about the list business is that one plus one is larger than two because of the synergies involved," he said. "In a household, for example, we may know that the father flew to Paris, the mother bought a washing machine and the kids watch Nickelodeon on pay-TV."
Peter Rosenwald, an American DM pioneer who is Abril's VP for direct marketing, explained that the partnership strategy was developed because "for us lists are a core business and for our partners it is not.
"The benefits to them, therefore, are that we manage their lists and provide a lot of services which are not their core business, and they get additional revenues and preferential access to the Abril lists.
"Datalistas is enjoying record rentals because people realize that you can reach the right people with the right message at the right time. And we have a real marketing database that covers a good percentage of economically active customers."
List rentals in the US, Rosenwald and Vasconcelos conceded, plummeted in the wake of Brazil's economic problems and the devaluation of the Real. US sales are down 90 percent.
"Still, we think it is important that these lists be made available in the US," Rosenwald said, and added "but we don't have to feed our families on that."
Direct Media has handled Abril's list but the company is shopping it around to other brokers with Infocore and MMI reportedly in the running.
Rosenwald believes US interest in Brazilian DM will rise as the race for position in the new technologies heats up. "There is a vicious competition going on for mobile phones. All those international companies are coming in and they're killers fighting for market share.
"And they are not alone. Internet providers and Cable TV providers are fighting for market share. They all understand DM and want to use our names for mail and telemarketing."
Money is pouring into the online business even though the number of actual users is still sparse. Last December Morgan Guaranty paid $100 million for a 12 percent stake in UOL, a content and service provider with 500,000 subscribers.
Abril owns half of UOL and has a "zillion" sites on it that makes every one of Abril's publications available to surfers. "It is a major corporate initiative to bring out Internet presence together and coordinate it."
But Rosenwald believes that Brazil faces an even more radical media revolution once a law now before Congress allowing foreign ownership of Brazilian media is adopted.
"If the big foreign players want a share of Globo's TV market (Globo is the biggest TV network in the country) they are going to put big bucks behind it and get it."