E-mail Intelligence
Industry insider discusses trends, prices, and list quality

Reprinted from Direct Magazine's "Direct.com"

Jay Schwedelson, corporate vice president of list company Worldata is grounded in both the postal and e-mail list businesses. An industry leader in developing best practices for e-mail marketing, he is a member of several Direct Marketing Association groups, including the Internet Council.

He is the former chair for the Association of Interactive Marketing's Council for Responsible E-mail.

DIRECT: How many e-mail lists are out there?

SCHWEDELSON: There are 3,000 to 4,000 permission-based managed e-mail lists available. (That compares with 30,000 to 40,000 lists available in the postal marketplace.) The number has grown about 200% in the last 12 months. From what we can forecast, that rate is not slowing at all. Gone are the days of these giant databases that were used purely because of size. That's not the game anymore. Now marketers want to know how targeted can I get, what is the source of this name and, of course, how much does this list cost
.
DIRECT: Why such growth?

SCHWEDELSON: Everyone is looking for additional revenue streams, and list rental is a very strong potential revenue stream. Also, because the idea behind permission-based e-mail has widened to include double opt-in as one option among many, including single opt-in and negative opt-in, list owners who may not have had a real commodity two years ago now do.

DIRECT: Are permission-based lists better?

SCHWEDELSON: Opt-in lists are still performing the best, and causing the least negative response.

DIRECT: What do e-mail lists cost?

SCHWEDELSON: If you are paying the rate card on an e-mail list for rent, you are doing something wrong. E-mail list rental is a highly negotiable area. Consumer e-mail lists range from $50/M to $200/M. The price on consumer CPMs are dropping on a daily basis.

DIRECT: Why?

SCHWEDELSON: There are so many lists available and the lists available are not high quality. Unfortunately, that's opened up the cost-per-acquisition in the consumer space, which is not available in the business-to-business space. Consumer lists are much more negotiable than B-to-B lists. BTB is holding fairly strong where lists cost $175/M to $300/M.
I think one of the biggest developments that is going to take place has to do with list brokers not having been allowed to receive their commission on transmission fees [for sending e-mail broadcasts]. There's a transmission and tracking fee ranging from $25 to $115 per thousand. Up until now, list brokers have not been allowed to receive commissions on these transmission fees. In the next six to 12 months, you'll see that changing. It's phenomenal the level of responsibility the broker has compared with the postal list environment. The list broker is not just the media planner and media buyer, but has become the fulfillment house, service bureau, lettershop, everything.

DIRECT: Do e-mail lists now have postal information included?

SCHWEDELSON: About 50% of e-mail campaigns have a geographic target desired. That's because companies like a major DSL company, for example Ñ only want to reach those areas they can service. So e-mail lists need to have at least ZIP available. In the last 12 months, e-mail lists have had at least the ZIP code attached, and that allows you to go in and target certain geographic areas.

DIRECT: What other selects are available?

SCHWEDELSON: About 20% to 30% of postal lists now have correlating e-mail addresses.
So now you can select out data for that individual, including industry, household income Ñ a lot of the selects available in the direct mail space.

DIRECT: What about buyer history?

SCHWEDELSON: I don't think we will ever get to the point where we have buyer history available like we do with the postal space. Most major catalogers have their postal lists on the market, but they do not have their e-mail list available. That's because they are already e-mailing their own customers and they don't want to rent the names and have their customers receiving too much e-mail.

DIRECT: Has there been more e-mail since the anthrax incidents?

SCHWEDELSON: The one thing that has not happened is a proliferation of e-mail going hand in hand with direct mail. People thought the anthrax scare would change the landscape of e-mail and that from now on a mailing would be followed by an e-mail blast warning that the mail piece was on its way. In fact, there has been no coordinated
e-mail/direct mail campaigns at all.

DIRECT: But have you seen an increase in integrated marketing?

SCHWEDELSON: Absolutely, but most of that has been with marketers reaching their own customers, not in prospecting.

DIRECT: What about the quality of the lists?

SCHWEDELSON: You have to be a very good media buyer to find good quality consumer lists.
It's important that you stay away from sweepstakes files. Sweeps files are among the lists driving down CPMs. A lot of those sweeps lists have been collected in a highly non-permission-based environment.

DIRECT: What are the best quality lists?

SCHWEDELSON: I think what we're going to continue to see as the next best thing in responsiveness to buyer data is subscriber files. Almost every major magazine publisher has made its e-mail list available. And these publisher files are becoming the upper echelon of e-mail lists on the market. These are responders Ñ they have subscribed to something or are qualified to receive something. Also they are readers. If they read, they are good responders to e-mail because you have to read e-mail. Also, because these are the upper echelon lists available, they are among the most expensive.

DIRECT: What about the quality of B-to-B lists?

SCHWEDELSON: B-to-B are much stronger than consumer files and the strongest are the tech-oriented files those lists of people who use e-mail. In general, people are continually checking their e-mail at work. B-to-B publishers are putting their lists on the market. Companies such as IDG were among the first to do so.