Regarding the broad categories of opt-in lists we talked about last week, buyers must ask various questions — beyond those about the simple technical means by which the list was assembled. Buyers need to know the following:
- Why did individuals sign up? What was the very specific offer they answered, and in what context did they see it? If they signed up because they were offered $5, the buyer might find a lot of unqualified people among the addresses.
- How recently were the names collected, and how recently was the list cleaned? Sometimes buyers can select a subset of the list — those most recent. This is highly desirable if the list has not been reviewed for multiple entries.
- How often and how recently has this list been used, and for what messages? No buyer wishes to be the tenth advertiser to send some poor soul an email advertisement on the same morning.
Anyone conducting email marketing should verify the policies established by the list owner. Put yourself on all the lists you wish to investigate. This will allow you to see who uses the list and how frequently, and it can even yield some good competitive intelligence.
Don’t stop there. Try to take yourself off the list and see if it’s as easy as the list broker claims. Then put your name on the list a couple extra times, just to see if the data-cleaning process works.
Don’t use your primary email account; your email address could quickly become a vortex of spam.
Finding the Right List
The three main options, from the simplest to the most complex, are these:
- Sponsoring a newsletter list
- Renting an existing list from a publication or list broker
- Building your own list
Newsletter sponsorships: This works much like an online media buy. It typically involves both a text message within the newsletter and, if it’s HTML, a banner-like graphic.
Online newsletters can be found for almost every imaginable topic. Their frequency varies — from daily to weekly to the downright intermittent.
They sell by the CPM, just like other online media, although some newsletter publishers allow for performance-based deals.
Rented lists: Existing lists can be found and rented for a specific use. These are typically sold on a CPM basis. Sometimes, though, the lists are priced as the “cost per.” That means an email list priced at $0.20 isn’t a great deal, because the price translated into CPM is $200.
The best way to find an appropriate list is to look to the online media vehicles that planners would otherwise purchase in a banner buy. These same Web sites often compile email lists of readers who seek more information on specific topics.
Email-specific companies also compile addresses associated with interests. Among them are YesMail, 24/7, TargitMail, PostmasterDirect, and Netcreations.
Self-created lists: The best long-term solution for clients is to create a special, proprietary email list, either through the client site or through online media marketing.
Many companies have offline mail information on many of their customers. The elicited email responses from a direct mail piece sent to such users can be used effectively to link the data in your online database with that of the offline database. This works exceptionally well as a tool to link email addresses to previously acquired user information in a client database.
Some agencies specialize in certain industry segments, making it profitable to create their own agency-oriented lists that they rent out to clients. Doing this has proved popular with many business-to-business online ad agencies, because they become central clearing houses for media-opportunity information in very narrow industry niches.
Deal Structure, Pricing, and Negotiation
Email list brokers seem to have an aversion to cost-per-action (CPA) buys. While buyers might not find themselves able to change some list brokers’ minds, they might find the arguments for CPA deals effective in helping to negotiate prices.
The typical after-negotiation CPM rate for rental of a one-time-use list ranges from about $100 to $300, depending on the category and quality of audience. Cost-per-action deals range even more widely, extending as low as $1 to as high as $30.
List brokers will want to know a great deal about the advertiser’s typical response rate before they are comfortable offering a CPA deal, as this determines their own revenue in such a deal.
Media sites or list brokers that make a claim of appropriateness to your desired audience are open to challenge from the buyer: If they remain confident of appropriateness, why would they shy away from a CPA deal? This rhetorical question is a great place to start negotiating. It leads to several arguments forwarded by the seller:
- CPA deals encourage overuse of lists by the brokers to squeeze out the last drop of performance.
- CPA deals encourage list owners to throw in less-than-targeted addresses, just on the off chance they might find a willing purchaser.
- The performance of the deal remains controlled by the advertiser’s actions, and the seller shouldn’t be held responsible for the buyer’s creative, offer, and transaction system.
The first two arguments can be put to rest very quickly. If a CPA deal would force the seller to abuse the lists, then the lists do not offer the degree of targeting the seller promised in the first place. That would only encourage a responsible buyer to insist on a performance-based deal.
The third argument is a bit more complicated. While it is true that the advertiser’s creative, offer, and Web site will have material effects on the results, these are things that the site needs to take into account when pricing a CPA deal. If, for instance, an advertiser provides ads that do a great deal of branding and very little direct selling, the list broker would be justified in suggesting a higher price on the CPA. This doesn’t constitute an excuse as to why CPA should be undesirable — or, worse, that the list broker should have some control over the creative — but it does constitute a valid factor against which the broker can negotiate.
Sellers of email lists sometimes fail to realize that even if they are purchased based on CPM, they are almost always judged based on a later analysis of the effective CPA. When advertisers come back to the same vendor, it is only because the efficiency of the media proved superior to that of others. As a result, forcing deals into a CPM structure does little to help the seller. It can only serve to confuse the real results. The more list brokers are confident of the quality of their product, the more likely they are to desire CPA deals.