List Biz Evolving, Executives Say
While the list industry laments the demise of the Kleid Co., some leaders caution against concluding that the community is shrinking. Instead, they say, list companies are adapting to the changing needs and demands of their clients.
“There are still a lot of independent, large, strong and energetic companies that are doing well and will continue to do well,'' said Ralph Stevens, president of Stevens-Knox, New York. “[The list business] is repositioning in certain ways. What's happening is companies are trying to create alliances to create more products and services for mailers and marketers.''
Steve Dunn, president of Mal Dunn Associates, Croton Falls, NY, agreed that the industry is moving toward consolidation. The growing sophistication of list services, such as modeling and database management, require computer and personnel resources that some companies simply can't afford on their own, he said.
“It's becoming tougher for smaller companies to make it,'' Dunn said.
Other companies, such as Walter Karl, which recently was purchased by American Business Information, are helping the buyer as much as themselves. ABI gets expertise in processing and analysis, and Walter Karl gains capital.
“The list business is evolving. Those parts that are evolving are doing very well,'' said Donn Rappaport, chairman and CEO of American List Counsel, Princeton, NJ. “All that we do as list brokers and managers is becoming more of the focal point of the direct marketing equation.''
Indeed, those brokers and managers are being viewed by owners of databases and other information sources as vehicles to increase distribution. ABI chairman Vin Gupta has said as much, and Rappaport agrees that list companies that add value make attractive merger partners.
“Walter Karl was an opportunistic move in an industry ripe for consolidation of opportunity rather than need,'' Rappaport said. “Acxiom and ABI won't look for weak companies, and strong companies have the ability to gauge the benefits of a merger.''
List companies also have the ability to remain independent and flourish.
“A lot of mailers don't need all those other services,'' Stevens said. “One-stop shopping is a concept, but not the only one and not necessarily the best one.''
One way for list companies to stay strong is through diversification. Response Media Products, Atlanta, has operated a promotions division since 1992 that is geared toward packaged goods and retail clients and soon will launch an interactive division.
“Interactive is a natural extension,'' said Herb Torgersen, Response Media managing partner. “We're not staying put and leaving ourselves with just list management and list brokerage. There are ways for list companies to stay profitable, to stay out there and stay autonomous.''
Novus Marketing Grows From the Outside
Readers of Outside magazine work hard, and when they get out of the office, they like to play hard, too, and are willing to invest a lot to do so.
“These are guys that go to Tibet, hot-air ballooning in Africa, bicycling in Australia,'' said Monica Smith, executive vice president for list management at Novus Marketing, Tarrytown, NY, which took over the magazine's subscriber file from the Kleid Co. in February.
In its March 1998 issue, Outside connects marketers with 478,000 readers eager to climb a mountain every day or head to Australia to search for the platypus. Most are male — 70 percent — professionals with an average annual income of $56,500 and a desire to escape from jobs in the 10 largest U.S. cities.
“There are few files with a real strong male presence,'' Smith said. “You can attack the male market and still get some fresh, new names.''
In addition to its adventurous bent, Outside possesses strong literary and environmental conservation voices. It has won National Magazine Awards for general excellence the last two years and has been nominated for the 16th year in a row. This depth makes Outside readers a target for more than just the typical travel, sports, fitness and apparel offers.
“It's much more than a niche sports title,'' said Michelle Givens, consumer marketing director of the publication, which has doubled its circulation in the last 10 years and recently was named one of the country's 10 hottest magazines by Adweek. “That's one of things that got Novus excited, just how much possibility Outside possesses.''
Outside selected Novus for the vision the two companies share.
“They run their business like we do,'' Givens said. “They are not one of the big guys out there. When you consider the organization Outside is, we felt a natural kinship to them.''
Further expanding its publishing titles, Novus will take over the 1.1 million-name Weight Watchers Magazine file from the Lake Group, Rye, NY, on April 15.
American Bar Association Taps ALC
American List Counsel has become the source for reaching lawyers with its selection as the first outside manager for lists generated from the database of the American Bar Association. ALC took over the file April 1.
The ABA, Chicago, previously had managed list sales from its database of 410,000 legal professionals in-house but decided its use would be better maximized by an outside vendor.
“Our database offers access to lawyers as small-business owners, but also provides a link to sophisticated consumers with discretionary spending power,'' said ABA executive director Robert Stein. “We anticipate ALC will help us realize its value potential.''
The ABA file consists of lawyers who pay $50 to $275 for association memberships and receive legal publications and offers for various professional and personal services. They have an average annual income of $114,000 and household income of $168,000, 65 percent are owners or partners of law firms and 92 percent use home computers.
“ABA files guarantee better results than lists of lawyers compiled from directories, because they're updated continuously,'' said ALC executive vice president Fran Green. “Plus, ABA members are accustomed to purchasing through direct mail and telemarketing.''
Under ALC's management, the ABA file will be offered as a merged database selectable by such criteria as age, title, gender, size of firm and length of time in practice. Both business-to-business and consumer marketers can use the file to target financial decision makers.
In addition to the membership file, ALC also manages a file of 129,000 law students and recent law school graduates and a 250,000-name file of ABA catalog buyers.