Why publishers need a coop database
Over the last 32 years I have watched dramatic developments in the way direct marketers use mailing lists and data as direct mail price and performance becomes more challenging.
Although most direct marketers have learned the art of better segmentation, data enhancement, discounting and net name negotiations, their use of database opportunities vary greatly.
Business-to-business marketers and the large financial marketers have evolved towards private databases: databases where list owners and compilers import their data into a database environment designed for the exclusive use of a single mailer.
Such environments offer tremendous advantages over traditional mail, but one must have the volume, the industry clout and a high return on investment in direct mail to be able to build one.
The catalog industry, on the other hand, has trended toward cooperative databases, a trend led by Abacus and other providers.
These databases, although not custom built for a single end-user, have most of the advantages of a private database with three important bonuses: they are larger and more data rich than any single user database would be; they cost the user nothing to build, as they are developed by a third party; and they are cheaper to rent.
The publishing industry has, by comparison, not embraced mutual participation in a true cooperative database for their market. Instead, this industry has generally resorted to making up the difference through the use of inexpensive agent-sold subscribers.
Agent-sold subscribers play an important role in meeting rate base for many publishers, but they cannot replace the vital paid subscriber that is acquired through direct mail.
The reason publishers do not have a coop for their industry is somewhat ironic: they do not want to share their names with other publishers the way catalogers have had to. Yet they by necessity must exchange names with their competitors and appear alongside them on the agent-sold offers.
It is time for publishers to take a hard, serious look at the tremendous advantages an industry-wide coop would afford them. There are a few of them out there, one of which my company is involved in. I will use its features as an example, as I know them best.
Participation is blind: No one knows who is participating unless they disclose it themselves. Every use by every mailer is approved by every participant. All subscriber lists are enhanced with lifestyle and demographic data. Modeling is a simple selection charge, and the list cost is half the CPM of an individual list.
To be able to mail net of your own names, with true nets from other subscriber names in a highly targeted, modeled universe at a discount rate is an opportunity that any publisher should carefully examine.
Additional benefits include market profiles, list hygiene, data appends, expire reactivation programs, ancillary list rental income and selective binding.
As publishers continue to struggle with rising costs in the mail and an increased need for a quality subscriber base, they should follow the lead of their catalog cousins and work together to their mutual benefit through cooperative databases.