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New Data Source May Force Brokers to Change Role

The rise of infomediaries presents a new source of responsive prospect names to direct marketers, but rather than replace the role of the list broker, they are expected only to bring about some changes.

Sources from both the list industry and the nascent infomediary world — whose most recent members include start ups Populardemand and PrivaSeek — admit that some competition will exist between the two data sources, but see more of a cooperative scenario that will ultimately benefit both the consumer and the marketer.

“There is always the fear when a new channel is developed that it puts at risk all

existing channels,” said Ian Oxman, president of infomediary ChooseYourMail.com, Chicago. “I don't think traditional direct marketers will stop using the telephone and postal service. They will augment their services with e-mail.”

Fred Davis, CEO of Lumeria, El Cerrito, CA, said companies like his — third-party Internet firms that protect personal information and distribute e-mail offers from advertisers at the consumer’s discretion — pose a threat only to those list brokers whose sole function is selling names. He sees infomediaries becoming providers of names and list brokers serving as consultants in the planning, targeting and creation of campaigns.

“Certain companies we will be competitive with, others we will be cooperative with and some will be customers,” Davis said.

Todd Love, who heads up e-mail list management for the newly opened ALC New England office in Stamford, CT, said those Web marketers without a direct marketing background are positioning themselves as infomediaries and leaving campaign management to the broker. Brokers are already helping clients implement traditional DM practices on the Web, he said, and infomediaries will help decrease customer acquisition costs.

“We will absolutely work with them,” Love said. “We’re in the business of buying data on our client's behalf.”

Janine Vosseler, executive vice president of list management and brokerage for 21st Century Marketing, Farmingdale, NY, said infomediaries provide another e-mail data source that will help her firm serve clients better. If infomediaries could find demographic niches, she said, they could improve the selectivity and performance of what are now pretty broad e-mail lists.

Davis said the infomediary business model, which asks consumers for permission to make an offer, motivates the consumer to reveal more actionable information than is available from compiled and response lists and should lead to higher response rates.

As consumer privacy advocates, infomediaries also will hasten the push for an industry-wide definition of opt in.

Infomediaries act on information provided by online consumers about what lists they wish to be removed from and which types of offers they would like to receive. While this is a new movement on the Internet, such services are not new to direct marketing. The Choice Mail product from the Polk Co. has been surveying consumers by mail since 1997 to build a more than 4-million-name category-suppression file. Polk also maintains a 5.7 million-name Buyer’s Choice list of consumer category preferences.

The Direct Marketing Association offers mail preference and telephone preference services that allow consumers to take their names off direct mail and telemarketing lists and now some list firms are offering similar services. Acxiom/Direct Media, Greenwich, CT, can identify and suppress names for its list management clients as part of its service bureau processing and CEO Steve Brighton predicts that as privacy concerns grow such suppression databases will be more in demand.

Oxman will cooperate with list firms that manage and broker e-mail lists as long as consumer data can remain secure. He envisions the establishment of certified e-mail service bureaus that perform merge/purge to eliminate degrees of opt in that are not acceptable to consumers. These would include all situations where consumers are not asked their permission to receive a specific offer or given the opportunity to opt out from receiving future offers.

“There needs to be a commonly accepted definition of opt in,” Oxman said. “Often an [e-mail] database is nowhere near what consumers think opt in ought to be. A lot of opt-in lists are not that at all.”

Roy Schwedelson, president of Worldata, Boca Raton, FL, is not sure infomediaries are necessary. He said groups like the DMA, TrustE and AIM have gone to great lengths in their privacy push to help the list industry regulate itself. Schwedelson views infomediaries as business opportunists who are trying to reinvent wheels but will leave it up to consumers to judge if the new business model will work.

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