E-mail Lists Are Not Overpriced

Mar 17, 2008 11:38 PM  By

I recently read David Kanter’s column “Are E-mail Lists Overpriced” and felt that I had to respond.

It’s true that NetCreations (a company acquired by Return Path in 2004) set the standard on pricing back when it was founded in the late 1990s. Of course, we also set the standard for permission by inventing and patenting double opt-in to be sure e-mail was only going to people who really wanted to receive it.

So where are we today? Are e-mail lists horribly overpriced, as Kanter suggests? Is e-mail a losing channel with low response rates? While we have to admit to an obvious bias, we really don’t think so.

Sure, prices have fallen on some e-mail lists, but those price declines are consistent with market forces. In some cases, companies have cut prices on their lists, but they generate additional revenue via fees for their various e-mail marketing services. In other cases market pressures have brought prices down. However, it needs to be said that the prices on some lists – particularly in the technical and B2B spaces – have risen as it has become harder to reach these desired audiences.

This is life in a free market. Prices will fluctuate as supply and demand goes up or down. But, to suggest that list managers should proactively lower prices, because of a perceived weakness in the ROI of e-mail marketing, is silly.

Kanter listed a wide variety of e-mail deliverability issues as a reason that customer acquisition via e-mail is declining, and as further proof that the prices for e-mail lists should go down.

But, this argument doesn’t hold up. A high-quality acquisition list can have higher deliverability than a poorly permissioned customer list. E-mail marketers need to do their homework and only work with the highest quality vendors.

Which brings us back to our original point. Given the tricky landscape that is acquisition e-mail, shouldn’t marketers be willing to pay more for a carefully maintained and vetted double opt-in list with high deliverability? We would say yes. When marketers use those high deliverability lists (especially in conjunction with other marketing channels) e-mail marketing is still a great tool for customer acquisition.

In fact, one point that Kanter made in his column that we at Return Path agree with wholeheartedly is the need for marketers to truly embrace multichannel marketing. E-mail marketing combined with direct mail, broadcast, and other marketing channels is the smartest strategy.

As for the question of price, we believe the list rental market should behave like any other market – e-mail list managers should offer the best lists at the best price that marketers are willing to pay. And marketers should be assertive about negotiating prices that fit within their budget and meet their ROI demands. In the end, everyone will win.

Craig Swerdloff is Return Path’s vice president and general manager of customer acquisition solutions