List vet Jay Schwedelson, corporate VP of Worldata, was elected chairman of the DMA List Leaders Group this year and is a board member of the Direct Marketing Educational Foundation. In those roles, Schwedelson said he hopes to be a facilitator of growth in the list industry. The List Leaders Group is comprised of the top one or two executives at various list companies and meets throughout the year to share ideas. BtoB spoke with Schwedelson about his views on the changing role of the list manager, the current state of pricing and the importance of diversifying.
BtoB: What trends do you see in the list world?
Jay Schwedelson: All the list companies are diversifying their services to a point where we're discussing whether we should [even] be referred to as list companies. We don't want to be pigeon-holed into one very specific form of media. It's about who are we now and how we want to be recognized in the future. Even within my own organization, we're doing more in cost-per-lead marketing in the past 24 months than ever before. As opposed to a major marketer renting a list, and mailing out a million mail pieces and hoping to get good results, we're working with Web site owners to allow marketers to pay on a per-lead basis. We're seeing a good amount of budget moving to the cost-per-lead environment. It's safe, and that's why we think it's exploded so much.
We're doing co-registration marketing. Let's say someone subscribes to a magazine on the magazine's Web site. They get a page saying "thank you for subscribing" but also an offer to hear from a specific marketer. Those people opting in are critical to the marketers. For organizations like mine and my competitors', we're becoming the media planners and buyers for this area. It seems to be something the list industry is grabbing hold of.
Ninety percent of all third-party email lists are flowing through list companies. Our roles are expanding, our offerings are expanding and in working with the list leader group, we're working on trying to guide how we can best execute our goals.
BtoB: What about list prices? Last year, list pricesóand especially email list pricesówere on the decline.
Schwedelson: They continue to fall, especially in the world of email. They continue to fall because response rates are down. There are certain marketers within the email channel that are finding success. Those promoting Web events, white papers and software demos are finding success. Marketers using the channel but not using some of those leading offers are finding difficulty in driving strong response rates.
It's not just about the amount of emails being sent out; it's also about the software for filtering email now being used by most corporations. That software has improved exponentially, and that makes it harder to reach the inbox. That is driving price down in terms of list cost because, as marketers find weaker response, they need to keep costs down to see profit in the end.
BtoB: What about phone lists?
Schwedelson: We are seeing an uptick in telemarketing list prices. They are holding firm because the response rates are very strong. We've seen a decent migration from email to telemarketing. In the last 12 months, we've started to see a push in that direction. When email was exploding and new, a lot of people abandoned the more traditional channels like telemarketing. But as email becomes a more average channel rather than a home run, marketers are going back to the basics.
BtoB: Is the face of the competition changing?
Schwedelson: The agency world is really starting to butt heads with us more than we've ever seen. The reason is the agencies are being held more accountable. The media they buy and sell has become more measurable. As they are being pushed to more accountability, they are getting into more direct response media. They are trying to take on lists.
They have avoided list channels in the past. They weren't interested in buying list data in a significant way. They focused more on print and Web media. We're beginning to see them play a larger role in taking on list purchasing responsibilities. That's causing anxiety among list companies that feel the agencies are horning in on what they do. We're at the beginning of that.
The brokerage end is what is most in jeopardy. The flip side of that is that I believe that list companies are starting to take on more agency-type responsibilities. List companies are buying media that in the past was the role of the media company. List companies are buying nonlist-oriented media such as Web media or cost-per-lead media, even print media to a certain extent.
BtoB: What does that mean for list companies?
Schwedelson: It's diversify or die. That's the reality. If you are offering the same exact services as a list organization that you offered five years ago, you're not going to be around for long. óC.K.
|BtoB Special Report: List Management|