With fewer new lists coming onto the market, flattening or dropping response rates and a consolidation of the industry as large firms continue to buy up smaller ones, many U.S. list brokers need to diversify to survive.
While some list brokers are exploring the Internet, card decks and other media, and others are providing add-on services such as response analysis software or project managing computer or lettershop services, many are jumping on the international list bandwagon.
With the surge in media coverage of international direct marketing issues has come a rapid growth in the number of list companies professing to provide international mailing list services. But what level of commitment is necessary to bring expertise to international list consulting?
Although the United States is considered to be at the cutting edge of direct marketing developments, it lags behind its foreign counterparts in cross-border direct marketing.
The United States is a victim of its own size. Historically the U.S. market has proved so vast that companies did not need to venture beyond its border. Other countries have not had this luxury and have been direct marketing internationally for many years.
The United States has made the slowest progress in international list services.
For example, if you go to a foreign directory of mailing lists, similar to the U.S. Standard Rate and Data Service (SRDS), or look in a foreign list broker's in-house directory, you would probably find more than 50 percent of list entries from other countries.
In the United States, if you had looked at the Marketing Information Network four years ago, you would find perhaps only 500 non-North American lists out of a total of 20,000. Today the non-North American list entries have grown to 2,000, mostly those managed by U.S. companies. SRDS has experienced a similar rise, so certainly there have been some improvements in the accessibility of international lists in the United States.
However, the U.S. list industry still can learn a thing or two about list techniques from its foreign counterparts, particularly list targeting and sociodemographics.
As a direct result of fewer lists being available overseas because of less freedom of information (government vehicle registration information is not made available in most other countries), fewer foreign companies making their names available (often there is a fear of theft because of lack of copyright protection) and fewer names being collected (magazine subscriber lists may not exist because of a predominance of newsstand sales), some countries have had to become more sophisticated in using the limited information that is available to them.
Sociodemographic profiling in the United Kingdom, for example, is much more sophisticated than anything available in the United States. So yet another reason exists for U.S. companies to pay attention to international list developments.
There has been a shortage of U.S. computer service bureaus proficient at handling foreign names and formats and of lettershops experienced in handling the vast array of diacritics and punctuation found in international addresses.
Until recently, U.S. companies requiring international merge/purge or lettershop services have had to use overseas vendors, but increasingly they can rely on U.S. companies that have rushed to fill the void.
So what is the demand for international lists?
Well, certainly if increased media coverage is anything to go by, the demand is there. Most direct marketing publications now devote several pages per issue to the subject; a number of comprehensive books have been written about it; and conferences and seminars dedicated to the subject seem to be well attended.
How much of this interest gets translated into business?
While there are a small number of well-known U.S. mailers, such as National Geographic and Business Week, that actively market internationally, an enormous number of first-time international mailers are entering the market.
Although these new mailers tend to be progressing cautiously, the majority seem to be moving an increased proportion of their direct marketing budget to international promotions for subsequent campaigns.
While there may not be a quick or easy profits for international list vendors in the near future, for the long term the demand definitely seems to be there.
As in any new industry, there are dangers. The main one is not getting it right from the outset and creating a negative image that may reflect not only on your reputation in the new industry but on your existing business.
It's easy to be tempted to oversell international list capabilities, especially since most mailers initially considering international mailing will ask their existing U.S. list suppliers for help. “Yes, no problem,” is easier to say “No, this isn't my field of expertise.”
Embarrassing mistakes can best be illustrated by stories of orders gone wrong:
Did you hear the one about the list broker who ordered 100,000 international labels but forgot to ask for the country address line to be added, and the entire mailing piece had to be destroyed?
Or the list broker who unwittingly supplied his client stolen data from the internal revenue service in Argentina?
Or the list broker who ordered a diskette of Japanese data and did not know that the addresses would be in Japanese characters and the data could not be printed?
Or the list broker who did not know Brazilian addresses with five-digit post codes may be acceptable if mailing from the United States, but eight-digit post codes must be ordered if mail is being delivered directly into the Brazilian postal system?
How about the list broker who did not know international Cheshire labels often are wider — which most U.S. lettershops cannot handle?
Or the list broker who did not know that many Asian names are printed first-name-last and last-name-first?
Or the list broker who ordered data for a specific number of deutsche marks and quoted the mailer a dollar amount, only to pay the vendor three months later and realize that exchange rate fluctuations had wiped out its commission and more?
While it would seem most of the above could be avoided using common sense, every country has its own idiosyncrasies. If you are not dealing daily in international lists, you can soon commit some expensive mistakes.
Thus, international list vendors only can expect profitability through a long-term commitment to the market.
Mike Manning is director of the international division at AllMedia International, Plano, TX, a supplier of international mailing lists and direct response media programs.