(Direct) New York–Data compilers face increasing pitfalls and higher expenses due to regulation and the need to verify information. But they also have more revenue opportunities – including ones from a very surprising channel.
Regulation and higher costs go hand in hand. At Red Clay Media, which resells compiled information, the firm has begun relying on larger compilers, which often rent their data at a premium, to supply its prospect lists.
The higher costs stem from large suppliers having taken more care to secure information appropriate for marketing purposes, according to Brian Rice, president of the direct marketing services firm. He noted that this decision has had an effect on his costs: “Margins were higher with the smaller firms,” he said, during a panel discussion at List Vision 2005.
And costs are rising for raw information. Take date of birth data, which was widely available from state motor vehicle departments until legislation required the departments to get permission from drivers before releasing the data.
That information is still available through surveys, warranty cards and even Internet registrations, said Todd Ratliff, director of data acquisition for KnowledgeBase Marketing. But unlike the motor vehicles departments, which were reasonably reliable about giving accurate data, dates of birth now have to be multisourced in order to make sure they are accurate.
Self-reported data have increased in importance, added Shari Paul, senior vice president of sales for the Direct Marketing Solutions unit of Equifax Marketing Services. And as business models have become more sophisticated, it is important that nontraditional data fields be filled in, in order to allow predictive modeling to run properly.
Data culled from online sources does contain a unique set of dangers. Ratliff warned marketers to consider data collected from the Web to be aware of any incentives used to get consumers to fill out forms, as well as the disclosure forms on the sources. Specifically, compilers (and marketers) should make sure that the consumers on the file have opted in to receive third-party messages.
If consumers are required to fill out data fields in order to gain access to an article, for instance, they may well put in a fake name and address. On the other hand, if the information is used to notify sweepstakes winners, chances are that the name and address will be good.
“With online information you have to look at each data point and see if it is reliable,” Ratliff said.
In the face of all this, panelists reported that one unexpected channel was holding its own. Despite the federal do-not-call list, compilers reported that revenue from telephone lists hadn’t dropped off. “We do have a lot fewer clients who are using them, however those that do – and do so well – are getting better results,” said Paul.
Ratliff acknowledged that while the do-not-call list had increased his costs, largely from the need to update the list frequently. “That said, our revenue for phone numbers hasn’t decreased. Those that did opt out were not the cream of the crop.”
Since the advent of the DNC list, KnowledgeBase has become much more aggressive about trying to put newly activated phone numbers into its marketing cycle. These often represent new movers, who are prime prospects for all sorts of offers, he said.
Even so, there are caveats. Compilers supplying telephone numbers should examine the telemarketing scripts, and have clients sign off on contracts detailing what the responsibilities regarding the numbers are. “We partner with them. We’re not just dumping phone numbers on them and saying ‘here, have fun,’” Ratliff said.
Moderator Stefanie Pont, managing partner of Pont Media Direct, noted that data compilers may be returning to a more entrepreneurial era. In the recent past, resellers sat back and relied on compilers to supply the data they needed. But data resellers are returning to a more entrepreneurial spirit, which hearkens back to a time when the vendors would call their local Rotary Club and say, “I can get you money for that list.”