Three Kinds of List Brokers
I may have begun my career with an agency, but my heart was always in the list business. Having worked on both sides of the fence has given me a unique perspective on the evolution of the list brokerage industry.
I must admit it initially bothered me that many list management companies also served double duty as brokerage houses, while other brokers chose not to muddy the waters with list management and others still acted simply as "list GPS systems" to help you find what you're looking for. After all, shouldn't brokers simply be responsible for recommending lists and measuring results, and not monetizing the relationships at every level or avoiding accountability all together? The answer: It depends.
Today, hundreds of list brokerage companies plus thousands of ad agencies are competing for your brokerage business. However, each of them can be separated into one of three distinct camps.
Boutique broker. The first group, call them boutique brokers, consists of agencies and independent list brokers who don't manage lists. They have an enormous ability to consult with marketers and research the best lists. They are experienced in structuring tests to determine and measure responsiveness.
They also are well suited to negotiate appropriate discounts that work well for both list owners and mailers, driving value and sustained usage. Skilled brokers also take on the arduous task of coordination and merging/purging of the many diverse campaigns and lists. They are well matched for marketers who cannot, or will not, place their house file up for management and for marketers who use multiple list channels.
Management broker. This is a list manager who also offers brokerage services. This relationship is well suited for marketers who also are list management clients of the firm.
This broker's familiarity with how a marketer's house file has been built, often coupled with its in-house modeling and analytical capabilities, gives the management broker a greater understanding toward identifying the marketer's ideal prospects.
However, its list recommendations may be less diverse and more biased, and its testing and measurement less robust than that of boutique brokers.
Marketers often will choose management brokers who have expertise with common list sources, such as catalog, business publications or Internet subscriptions. This helps ensure the proper management and channel hygiene of the file and opens opportunities to participate in private databases in an effort to eliminate unnecessary costs and increase ancillary revenue.
Broker's broker. The third classification could be labeled "list finders." These often are list managers or list compilers who first will look at the files they represent and create simple recommendations.
If the broker's broker does not manage the appropriate lists, it will search its professional network. This is where the broker's broker shines. It has extensive experience in locating hard-to-find and in-demand lists. Large marketers such as vacation telemarketers, who consistently seek new data sources, small campaign-specific marketers and boutique and management brokers use this group.
What may seem a glaring conflict of interest or a double dip can be a distinct advantage depending on your unique needs.