The cost of data has been decreasing year on year. The reasons for this include the fact that marketing departments are slashing their budgets.
This means they are charging list brokers with reducing their data acquisition costs, which in turn forces list managers to lower their costs to win pitches - creating a very buyer-driven marketplace.
Also, the proliferation of lists in the marketplace has meant lower costs, with the owners of the less mail-responsive lists willing to offer even lower prices to promote tests on their data. This unfortunately encourages marketers to buy large amounts of less responsive data for their direct marketing campaigns.
This state of affairs causes big problems for the data and DM industry as there will be an increase of less suitable data being used for DM campaigns.
This will lead to consumers being bombarded with a larger amount of poorly targeted mail - something the industry will pay for in the long term with the introduction of greater restrictive legislation. And in the short-term, it encourages more consumers to sign up to the TPS and MPS.
This is a shame because while the current cost of data does make direct marketing more attractive to marketers, it is for the wrong reasons.
It's this reduced cost that makes it harder for list managers, who are tasked with maximising revenue for the lists they manage, to drive revenue for their clients. List managers now have to look at what added value they can offer to be price-setters. This means taking a greater involvement in affinity partnerships, sponsorships and quick capture.
The best way to ensure fair pricing of data for all in the industry, while encouraging greater cleanliness of data, would be the implementation of an industry-wide performance pricing scheme. This would encourage all lists to be as clean as possible and allow list owners and managers to charge a fair rate for their use based on their cleanliness and responsiveness.
However, there is nothing to stop data buyers setting key performance indicators so that data can be priced accordingly.
At present, the diminishing cost of data will encourage a larger number of untargeted mailings, which will continue to annoy consumers, leading to the possibility of increased restrictive legislation against the industry.
If list owners and managers show willing to be open and honest about the effectiveness of their lists, and all marketers understand the importance of using highly responsive clean data, we can turn this around.
- Jeremy Saul, list and sales manager, Holistic List Management.