The discussion about green direct marketing has so far centred on the recycling of paper-based communications and using sustainable sources of that paper. But what about the fuel that drives the DM engine - data? It's at the heart of every DM campaign but so far has remained under the radar in the industry's push to become a more eco-friendly discipline.
Direct mail volumes dropped by 7.4 per cent in 2007, according to Royal Mail, which suggests a decline in data usage. This month's Think Tank invited some large-volume mailers and one data supplier to debate what shifts in data purchasing and manipulation lie behind this statistic and whether green concerns are at play.
- What's your understanding of the term 'green data'?
Boyle: We haven't used the term 'green data' at Reader's Digest but are concerned more with clean data. If we get an address wrong it's likely to become a wasted message. So hitting the right person with the right message is what you might call green data.
Mitchell: Absolutely. As a large mailer, News International has, for the past five years, pulled back from buying lots of lists to minimise waste. We use a prospect pool to mine and segment, and if we buy a third-party list, it tends to be of a specialist nature.
Gilbert: We do a lot of unaddressed activity rather than cold direct mail. A couple of years ago we dropped the whole country three times a year - that's 60-70 million unaddressed packs a year, but we're definitely not at that level any more.
Morris: That's the trend. This idea of buying lots and lots of lists every time you want to put a campaign together is very time-consuming and inefficient from a cost point of view.
- If paper-based DM is declining, how are you prospecting?
Boyle: Reader's Digest will still send out a reasonable amount of mail shots but we're trying to encourage customers to respond through the internet or via the telephone.
Gilbert: I've consciously shifted my budgets online, partly due to worsening response rates offline, but also because we are really conscious about people's attitudes to direct mail. We've taken a hit in terms of number of donors because it's a new channel we're learning about.
Mitchell: Green for us means getting people to use multi-channels - we're trying to integrate paper, email and mobile. With audiences that don't tend to consume newspapers, it's about encouraging them to access our content online.
- Is e-data the greenest kind of data?
Gilbert: In terms of cost it is, I guess. But people already feel they get too many emails. I'm quite cautious of email - I haven't seen anything particularly good come from it in terms of acquisition.
Boyle: There's a massive difference between the cost of pressing a button compared with the cost of a mailpack. But we don't buy email data, because very few vendors have truly opt-in data.
Morris: Email is like a gold rush - email everybody as it doesn't cost much - but it causes more resentment than telemarketing.
- Surely response issues, rather than concern for the environment, will kill cold data usage?
Mitchell: Our strategy is to get through to a very targeted audience, and as a by-product, we've reduced our paper activity. James Murdoch joined us in 2007 and green issues are firmly on the agenda. Data is part of that.
Chipperfield: BBC TV Licensing is a huge mailer - we contact all 25 million customers at least once a year. We're exposed on the wastage front if we don't clean our database. It's about getting consumers to give us their email address and mobile number.
Morris: One driver of this is environment minister Joan Ruddock getting the industry to recycle, target and suppress more - it's Stephen's point about the right message to the right person at the right time. Clients want data that's clean and recent. We're lucky at Transactis because we collect data from transactions through our members so it's a function of what we do.
- Is a client's own data the greenest kind?
Mitchell: News International can generate a huge amount of volume out of our customers, but the depth of data we have is maybe name, address and the (particular) promotion. A prospect pool allows us to fill in the gaps that ensures when we do select those individuals, they are the right audience. So if they buy wine, perhaps they'd be right for a Sunday Times Wine Club offer. The issue for us is that our prospecting activity is 80 per cent of what we do, and 20 per cent customer activity. We want to reach a critical mass of customers and have prospecting at 20 per cent.
- Will prospect pooling gain momentum?
Morris: We've launched a pay-as-you-go prospect tool called Vision and are getting a good response. It's taking away a cost - I don't have to process 20 lists every time I want to do a campaign, and can do clever things analytically that improve my results.
Boyle: We deal with four big players - Acxiom, Transactis, Experian and DLG for email - and we try to build relationships and allow our internal and external modellers to work together to get more out of the data. The market's taken us that way.
- Is there greater co-operation between data suppliers now?
Boyle: Erm ... no!
Mitchell: Maybe behind closed doors. But when you're talking about ideas such as "it would be nice to get this data on top of that" - some have got together to crunch their data but it's not been in an ideal format.
Morris: There's much more scope for data owners to co-operate. Yes, we tried to do a three-way thing with Acxiom and Equifax years ago but the three companies were moving at such different paces it wasn't going to work. But if you collaborate carefully with other suppliers, you can do clever things.
- So how clean is DM data, generally speaking?
Hartley: This industry is reasonably good at maintaining quality through traditional means - the MPS, TPS and the deceased component. The issue is where consumers move around - if we could nail this, the quality issue would go away. The problem we have to solve is joining what looks to be the same person at different addresses together.
- There's a reluctance to flag up MPS on direct mail
Boyle: Reader's Digest certainly wouldn't want to be forced to put the MPS on every piece of communication. Because if we do a bad communication to a consumer and that drives them to join the MPS, we're messing up that consumer for everyone else.
- Should suppression be free, or at least cheaper?
Chipperfield: The recent consultation by the Ministry of Justice on data sharing between public and private organisations is a good opportunity for this industry to say to the Government, in order to be green, wouldn't it be good if we had an Electoral Roll version of 'dud data'. There has to be an opportunity for a single, free file that tells you if this address is occupied.
- And put Mark Roy et al out of business?
Chipperfield: I'm sure Mark won't mind ...
Morris: You'd have to change behaviour first. The availability of a public/private sector suppression file is only going to change behaviour if mailers start using it. Same with a prospect pool - they've been very expensive to build, which might be possible for News International and Reader's Digest, but you want all companies to avail of it. It can be done - we're introducing models like pay-as-you-go - but if more respond to things like that we can look to hit the Government's aggressive targets.
- So who here has a single-customer-view database, which some would say is the answer to greener data?
Boyle: We've had a single customer database for 25 years.
Mitchell: We're about to have the best view we've ever had of our customers. A single customer view is very difficult with the number of titles News International has and the information we get from our third-party partners. But we're going to have the best view of a customer, how he's come to us, what competitions he's entered, what bulletins he's signed up for.
Chipperfield: We have a single customer view from our perspective but not from the point of view of the consumer, so they can't see a single view of themselves. But the BBC aspires to that, like News International.
Gilbert: We have five million donors and we had them on different databases but now we're building a single supporter view. Data is coming from our national events like Race For Life, and data from our volunteers will all be merged on one database.
- Should clients lead the way and create permission databases, before opt-in is imposed?
Boyle: Policing opt-in would be a nightmare.
Chipperfield: I think opt-in is the approach that most organisations will be taking and even third-party lists will have to look towards some version of it. Otherwise I can see legislation that could change it anyway. If the likes of Acxiom collect data from someone and that person finds it difficult to change his or her data - that would change the landscape.
Morris: If lifestyle companies were forced to have opt-in databases it would be extremely damaging and could destroy their business because they'd have to start from scratch. We're in a fortunate position as we take permission from our members.
Chipperfield: We have to involve the consumer more.
Boyle: We do that to an extent, in that when a customer rings in and asks to get off our list, we ask if we can tailor what we send. If it's a Mr Really Angry, then fair enough, but if it's someone who says there's too much mail, we offer them one mailing a month or perhaps a catalogue. A quarter of those people agree to that.
Chipperfield: That's interesting - it empowers the consumer and diminishes the industry's bad image. It's like M&S and its plastic bag charges. If you're more proactive, you're in control.
Boyle: It's about aligning our profitability and targets with making ourselves greener. We have to stay one step ahead of the consumer, in terms of the pressure on them to recycle. M&S is a good example - once one client does it, they'll all have to.
THE PANELISTS
- Stephen Boyle, head of marketing services, Reader's Digest
Boyle joined Reader's Digest as a statistician in 1989, rejoined in 1997 and has been in his present role since 2003.
- Mark Chipperfield, head of data management, BBC TV Licensing
Before joining the BBC in 2007, Chipperfield spent 10 years at BT. He is a Fellow of the CIM and IDM.
- Emma Gilbert, head of direct marketing and acquisitions, Cancer Research UK
Gilbert has been in her current role for 18 months after working for the organisation for six years.
- Hamish Hartley, data strategy manager, Transactis
At Claritas, Hartley helped build Psycle, the household level segmentation product. He joined Transactis in 2007.
- Chris Mitchell, head of data acquisition, News International
Mitchell is responsible for acquisition and data planning for four newspapers and The Times Educational Supplement.
- Chris Morris, founder, Transactis
Morris was formerly the MD of Abacus Direct Europe. In the 1990s he ran the database division of Claritas UK.
POWER POINTS
- Paper-based DM is declining, with a shift to digital media
- Response rates, as well as environmental concerns, are driving the move away from cold data
- Prospect pooling and use of a single customer database are likely to increase.