List industry faces multichannel trends, perception issues
The list business isn't in for any surprises this upcoming year. Since 2006 was the year of multichannel marketing, many list professionals feel that trend will continue next year.
However, with list universes shrinking and response rates decreasing, list brokers and managers will embrace lifestyle data marketing in an effort to outshine competitors.
"True purchasing behavior will influence more desirable lifestyle enhancements that are more refined and accurate, as we look forward into 2007," said Jonathan Pogact, director of business development at Mal Dunn Associates Inc., Brewster, NY.
Don Libey, president of Libey Inc., Des Moines, IA, said that the list business will see an increase in response list demand and a decrease in compiled list demand because of a need for higher quality prospecting performance.
"It is likely that there will be a decrease in membership co-op mailings as fatigue increases," Mr. Libey said. "There will be a return to premier response list segments, which is both logical and essential to maintaining a sustainable return on prospecting."
John Murphy, vice president and general manager of Rubin Response and Walter Karl, Schaumberg, IL, sees an enormous opportunity in new non-traditional list sources.
"Primarily we're seeing Internet co-registration sites as offering several opportunities," Mr. Murphy said. "Many times when an individual fills out a co-reg form they don't perfectly qualify for a particular offer.
"As Web 2.0 takes hold we'll see the smart marketers looking to marry the traditional metrics of direct marketing with online marketing," he said.
Overall, Mr. Libey predicts, about an 8 percent to 10 percent growth in overall list demand. He also sees an 8 percent to 9 percent growth in the multichannel industry in 2007.
This growth means fresh opportunities next year.
"I see new approaches to multi-positional marketing whereby marketers seek new positions in their existing markets," Mr. Libey said. "If they have the high price position, they will go after the low price position and attempt to lock in share they are now missing."
There will be great opportunity to continue and improve the full service approach to clients by providing ideas outside of lists, and focusing on other opportunities, such as sponsorships, lead generation, grass roots marketing efforts, and strategic partnerships, Mr. Pogact said.
"I'm very excited about 2007 for new business opportunities as end users are looking for fresh ideas from new vendors," he said.
As for challenges, something every industry faces, the list industry will face a few.
"Privacy is always a major issue, and I see the FTC getting even more involved in our industry," Mr. Pogact said. "As we're learning more and more about consumers and how to market to them more effectively, our perception to the general population is souring."
The fact that there is a Democratic Congress won't help with the privacy issues.
"The overhaul of the legislative bodies on both the federal and state levels of government may change the landscape of the direct marketing industry," said Mike Jorgovan, partner at Complete Mailing Lists, Bronxville, NY.
"Issues pertaining to data confidentiality and security are sure to be scrutinized," Mr. Jorgovan said. "Legislation regarding privacy and security breaches will likely continue to gain momentum.
"Marketers should become involved in the process by participating and supporting lobbying groups such as DMAction," he said.