Sales of consumer data, like every other media, bar digital, are suffering in the downturn. But there's a difference: the sands beneath the data or list sector were shifting way ahead of last year's global financial meltdown.
Long before the term 'credit crunch' entered common parlance, volumes of direct mail, and therefore demand for postal addresses, were being scaled back.
The rise of digital communications, declining response to untargeted direct mail and the growth in opt-outs are the underlying reasons.
It has meant a much altered data landscape, as marketers reconsider the type and volume of data they require. Warmer, multi-channel data is now the name of the game for clients and suppliers alike.
'Clients are still spending money but they want more value,' says Irit Reed, director of list broker Caspian Partnership. 'It's affecting the traditional way we have collected data.'
Marketing Direct's 2009 survey of more than 40 list suppliers and middlemen is testimony to this evolution. The figures for last year's activity show declining demand for cold lists - that is, contact details for consumers who may have had no prior relationship with a brand - but an increased appetite for warmer transactional data and quality email lists.
If data volumes were being scaled back before the credit crunch, last year's banking crisis has hastened the decline. As financial services, once the engine propelling the data sector, went into marketing retreat, many of the players in the survey say their business has been affected.
'The days of the large financial-services purchasers are over because cold data is just not performing as it has in the past,' says Chris Mitchell, former head of data acquisition at News International and now insight development director at Huw Davis Partnership. 'You need additional information so that clients can know the value segments and who their valuable customers are.'
E-data pioneer Interactive Prospect Targeting cited the financial meltdown as one cause of its difficulties in 2008. After months of poor trading, the AIM-listed company was forced to sell its UK businesses last year and reports a decline in names traded in 2008.
Acxiom, one of the UK's biggest suppliers of cold data, may have had an increase in consumer names traded in 2008, up to 625m from 595m in 2007, but this picture is likely to change. In January the firm lost the multimillion-pound contract to provide Capital One's prospect pool of data, as the credit card giant axed direct mail for customer acquisition and moved it online.
Experian, another big supplier of cold data, reported stagnant growth in volumes traded during 2008. This trend is also seen in the league for list managers (see page 45), where nearly half of those surveyed reported a decrease in the data that passed through their hands.
All change
Few believe the days of giant data tranches being bought by Capital One and its competitors will return. 'The list sector has to adapt to a world where volumes will be consistently lower,' says Rosemary Smith, managing director at list manager and broker RSA Direct.
So, while seven of the 11 key consumer data owners report an increase in the amount of data they sold last year, change is definitely in the air. The market has moved on from providing cold data derived from the Electoral Roll and lifestyle surveys. 'Demand for commodity data has dropped off but marketers are still using the higher-profile data from lists such as the FT and The Economist - consumers that tend to be more upmarket,' says Smith.
Transactional data is in the ascendancy. Sellers of such data argue that consumers 'in play' for products and services are more responsive to unsolicited approaches.
One such supplier is The Trading Floor, the second-placed company in our list managers league (see page 45). It manages a pool of multi-channel data - that is email, telephone and mail details - derived from quotation applications to insurance and credit card companies.
The credit crunch has proved a boon to The Trading Floor, according to its head of data, Zoe Vine. 'Credit card and loans brands we've pursued for years have never entertained the idea of renting their lists,' she says. 'But they've been hit hard in the crunch and are now looking for ways of monetising their customer base.' The company's pool of 20m records now has 48 brands contributing prospect data, up from 36 last year.
Analytical skills
Transactis, a company that sells data about consumers who have bought from home-shopping firms, tops this year's consumer data owner-supplier league. Its clients include Reader's Digest, which has a varied product range embracing magazines, DVDs and financial services.
'We still need volume data,' says Stephen Boyle, database manager at Reader's Digest. 'But we're moving away from purely cold data to using transactional data pools where you can build a profile of customers across the entire file and slice 30% off the top of the file for contacting.'
Selectivity on this scale requires database analytical skills, which Reader's Digest buys from its supplier, marketing services giant Experian. Smaller data sellers are getting in on this act, too. Business-to-business specialist Blue Sheep grew the amount of business names it traded in 2008, but at the same time is devoting more attention to analytics. Contracts for PC World parent DSG International, MoreTh>n and the Performing Rights Society involve supplying analytics as well as a bedrock data set.
'Data is great for marketers but it's analytics that identify the cross-sell and up-sell opportunities,' says Blue Sheep managing director Richard Lee. Last year Blue Sheep hived off its data sales arm into a separate division, B2B Data Direct, to emphasise the point.
Thomson Directories tops the B2B data owning league again this year, renting 9.8bn business names in 2008. B2B data trading got more competitive last year, with the arrival of InfoUK, a subsidiary of US data and market research giant InfoUSA.
Like data owners, list managers and brokers are reliant on demand for data. In the past 12 months, several have diversified to reduce their exposure to pure data sales.
ListLab, which manages lists and also acts as a broker, says it is seeing a return on its development of services such as e-broadcasting and data processing.
Sophisticated models
As brands move their communications online, the issue of cold data's effectiveness has shifted online too. The past three years have seen an explosion in the availability of cold e-data, forcing the price down to as little as £15 per 1000 names.
But privacy law, the power of the ISPs and deliverability issues have meant trading in cold email stuttered almost as soon as it took off. It's a hard lesson that Interactive Prospect Targeting, and other e-data sellers, have had to learn.
More sophisticated models of e-data vending are emerging. Tmnmedia, which operates as a digital list owner and manager, does not sell the e-lists it manages on behalf of clients, which include Handbag, ASOS and thetrainline.com.
While it tops our league of list managers - it traded 250m mostly email addresses in 2008, up from 228m the year before - access to the lists it manages is strictly controlled.Brands can get promoted to prospects through advertising sold on emails sent to those lists by the media owner. 'The quality of email lists for rent can be tremendous, as long as the opt-in is really clear,' says Mark Ash, tmnmedia's managing director. 'But this way we can boost relevancy and response by finding advertisers that fit the profile of our clients' customers.'
Digital list broker Mailtrack Media sources e-data from car insurers on behalf of client Mercedes, which is then segmented into types of car and overlaid with variables such as age and lifestyle characteristics.
'In this climate everyone is fighting for market share,' says Gary Powell, head of sales at Mailtrack. 'Because we're a broker we know whether a list is properly opted-in and if people on it are being bombarded.'
As in the postal data sector, analytics is giving e-data suppliers the traction to succeed. Mailtrack, which has a client list including HSBC, Gap, Hugo Boss and American Express, has invested in consultancy tools and skills to provide analytics that allow brands deliver different types of creative to various profiles of prospects.
'Data is becoming part of a bundled offering with a greater focus on supporting services and skill sets,' adds Powell.
Entire Direct Marketing, an agency that offers creative services and database marketing as well as list management, builds prospect pools of postal data, enriched with externally sourced email addresses where required. 'It gives us the ability to create digital regression models using domain information and online behaviour,' says Steve Everest, list and digital media director at Entire.
The new willingness of email data owners to allow third parties such as Entire to broadcast the campaign is a step-change in e-data's viability, argues Everest. 'Now that we can get hold of the email data, we can do the analysis,' he says. Entire saw the benefits of this in a pre-Christmas campaign for its client Littlewoods Shop Direct, which met its targets.
Postal prospects
As the data market shifts gear to online data generation, it would be foolish to write off the fortunes of postal data, partly because a postcode tells marketers a lot more about prospects than an email address.
A major player has just entered the market: Dawn Orr, a former director of Acxiom and one of the sector's best-known practitioners, has returned to launch Scientia, a transactional data service backed by suppression specialist The REaD Group.
In tighter conditions marketers view data as they regard other media: on a hierarchy-of-needs basis. 'There's a clear differentiation between the suppliers of mass Electoral Roll data and niche targeting data,' says Orr. 'Most marketers will put their niche, more recent, more expensive data at the top of their campaign and then pan down to broader data sets underpinned by the Electoral Roll.'
At a time when marketers are battening down the hatches and putting retention ahead of acquisition, one wonders whether the data sector needs yet another supplier. Orr argues there is room for a provider that can answer clients' current issues with data: responsiveness and the need for multi-channel contacts.
For that reason Scientia's database is split into a mailing file called Active, an email resource named eActive and a mobile database called smsActive.
If this latest entrant to the data fold is any proof, it could be that the data sector will handle the challenges of shifting client demand by practising what it preaches: segmenting and adapting its offer to a more fragmented, uncertain market.
JARGON BUSTER
Cold data: Ranges from basic names and addresses taken from the Electoral Roll, to data from lifestyle surveys where more information is gathered, such as income and car ownership
Transactional data: Details of consumers who have recently sought a quote or made a purchase through a retail outlet or via home shopping
Data pooling: The practice whereby data owners contribute data to a pool in return for use of another pool member's data
Data owner: The company that compiles or manufactures data, be it consumer or B2B. This can be a brand, a media publisher or a supplier that specialises in compiling data
List manager: A person appointed by a data owner to market their list to brokers or directly to clients
List broker: An agent who sources data from whatever source, usually list managers or data owners, on behalf of a client, receiving a commission from the data owner
SUN LIFE DIRECT
Target market: Insurer Sun Life Direct targets an older, less online market that still responds to direct mail.
Data needs: 'We've bucked the trend in the way we've grown our use of rented lists for our direct mail needs,' says Mark Howes, managing director of Sun Life Direct. 'We're interested in a richer data set with a deeper view of the customer's product preferences, and rented lists provide that enrichment.'
BSKYB
Target market: Mass market
Data needs: 'We have arrangements with a number of large suppliers because cold data is still a valuable tool for us,' says Simon Kaffel, head of database management at BSkyB. The company uses Electoral Roll-based products from Experian and Acxiom. 'However, we don't contact everyone on those files. We segment, model and target. And if someone says, don't communicate with us, we opt them out.'
CANCER RESEARCH UK
Target market: ABC1 adults aged 25+
Data needs: 'Cold (postal) data has never brought in a huge number of donors,' says Emma Gilbert, head of acquisition for CRUK. 'The majority of our data comes from other channels - door-drops, telemarketing, pop-ups on websites, DRTV and fundraisers such as Race for Life. Cold email campaigns have performed OK, but not to the level of these other channels.'
ONE BRAND'S JOURNEY OUT OF THE COLD
The Salvation Army was buying 3m consumer data records a year - until data insight agency the Huw Davis Partnership got involved.
'There is a lot of waste in cold data,' says Chris Mitchell, insight development director at HDP.
'The charity was finding results hard to come by, but through improved analysis, using transactional data as an overlay, we were able to reduce waste significantly so that The Salvation Army is targeting only its best prospects.'
So how is this achieved? 'We take a customer or donor database, overlay it with an external data set such as transactional data and start to see a match,' he explains.
Then comes standard data buying practice, whereby the supplier of the transactional data is asked for a 'net names' refund - a refund of the cost of data found on both databases.
After that, HDP looks for trends and patterns to find 'lookalike' donors or customers who match that pattern on the external database.
'The analysis will indicate whether you have to target them at a certain time, as indicated by previous behaviour,' says Mitchell. 'It's about understanding the lifetime value, not just the one-off initial donation, so you can continue that relationship over time.'
BUSINESS-TO-CONSUMER LIST OWNERS LEAGUE TABLE
Rnk Company name Volume Inc/Dec List-related Staff
traded on 2007 turnover in this
2008 (pounds m) area
1 Transactis 745.3m Increase 4.6 30
2 Callcredit Information 702.0m Increase 7.2 80
Group Marketing Solutions*
3 Experian 645.0m Equal u/d 300
4 Acxiom UK 625.0m Increase u/d 120
5 DLG 573.0m Decrease u/d 90
6 tmnmedia 380.2m Increase 2.5 35
7 IPT 167.2m Decrease 10.3 60
8 PDV 125.0m Increase 6 23
9 Data Research Associates** 62.5m Increase u/d u/d
10 Lifestyles Online 61.0m Increase u/d 4
11 Consumersketch 50.0m Decrease 2 6
12 Entire Direct Marketing 21.4m Decrease u/d 3
13 LBM 24.0m Increase 5.3 45
14 Maximiles UK 2.0m Increase 0.8 4
Rnk Company name Email B2C list List Market
% income % owner sectors
warranty
1 Transactis 5 u/d Yes MO, FS, Ch
2 Callcredit Information 1 67 Yes FS, R, Ut
Group Marketing Solutions*
3 Experian 15 u/d Yes FS, MO, Ut
4 Acxiom UK 30 65 u/d FS, Tel, R
5 DLG 24 100 Yes FS, Tel, Ut
6 tmnmedia 80 38 Yes R, Ent, Pub
7 IPT 66 100 Yes FS, FMCG, Au
8 PDV 80 100 No FS, Ut, Tr, Ent
9 Data Research Associates** 10 100 Yes Ch, FS, MO
10 Lifestyles Online 90 100 Yes u/d
11 Consumersketch 15 100 Yes FS, Gaming, Tr
12 Entire Direct Marketing 16 12 Yes MO, Pub, Ch
13 LBM 28 10 Yes IT, Tel, Au
14 Maximiles UK 95 25 Yes R, FS, Tr
* EuroDirect & Broadsystem
** Formerly Dataworkseurope
u/d: Undisclosed; n/a: Not applicable
Non-responders: Equifax
SECTOR KEY: A: Academic; Ag: Agencies; Au: Automotive; Ch: Charities;
Comp: Competitions; C&E: Conference & Exhibitions; Dir: Directories;
Ent: Entertainment; FS: Financial Services; H: Health; H&S: Health &
Safety; HR: Human Resources; IT: Information Technology; In: Insurance;
Ind & Man: Industrial & Manufacturing; Inf: Information; LS: Lifestyle;
Mkg: Marketing; MO: Mail Order; P&T: Personnel & Training; Pub:
Publishing; R: Retail; SW: Sweepstakes; Tel: Telecoms; T: Trade; T&C:
Training & Conferences; T&D: Training & Development; Trans: Transport;
Tr: Travel & Tourism; Ut: Utilities
Source: Marketing Direct 2009 List Report
BUSINESS-TO-BUSINESS LIST OWNERS LEAGUE TABLE
Rnk Company name Volume Inc/Dec List-related Staff
traded on 2007 turnover in this
(names) (pounds m) area
2008
1 Thomson Directories 9.8bn Increase u/d 40
2 D&B 762.0m Increase u/d u/d
3 Experian 328.0m Decrease u/d u/d
4 LBM 84.0m Increase 5.3 45
5 Corpdata 48.6m Increase u/d 81
6 Mardev 42.0m Decrease u/d 45
7 Marketscan 33.5m Increase u/d 20
8 Blue Sheep 28.0m Increase 1.4 10
9 DLG 11.0m Equal u/d u/d
10 InfoUK 5.0m n/a u/d 60
11 Haymarket Direct 3.9m* Decrease 0.6 5
12 tmnmedia 3.8m u/d 2.5 35
13 Electric Marketing 3.0m Increase 0.9 14
14 ICC Marketing Services** 3.0m Decrease 0.4 35
15 AP Information Services 2.8m Increase 1.9 7
Rnk Company name Email B2B list List Market
% income % warranty sectors
1 Thomson Directories 15 u/d Yes Various
2 D&B 6 u/d Yes Various
3 Experian 15 u/d Yes FS, Tel, Ut,Pub
4 LBM 28 10 Yes IT, Tel, Au,Mkg
5 Corpdata 65 u/d u/d IT, Tel, Fleet
6 Mardev 42 75 Yes IT, A, HR
7 Marketscan 11 97 Yes FS, Tel, Ut
8 Blue Sheep 5 40 No Ut, IT, Telcos
9 DLG 15 100 Yes A, Pub, IT, FS
10 InfoUK 15 100 No Tel, SMEs, ISPs
11 Haymarket Direct 58 89 Yes Mkg, Pr
12 tmnmedia 80 38 Yes Tel, Ut, Tr
13 Electric Marketing 75 93 Yes IT, Pf, C&E
14 ICC Marketing Services** 30 13 Yes u/d
15 AP Information Services 12 25 u/d u/d
* 1% of this is B2C data
** Formerly Market Monitor & Prospect Swetenhams
u/d: Undisclosed; n/a: Not applicable
Non-responders: Equifax
SECTOR KEY: A: Academic; Ag: Agencies; Au: Automotive; Ch: Charities;
Comp: Competitions; C&E: Conference & Exhibitions; Dir: Directories;
Ent: Entertainment; FS: Financial Services; H: Health; H&S: Health &
Safety; HR: Human Resources; IT: Information Technology; Ind & Man:
Industrial & Manufacturing; Inf: Information; LS: Lifestyle; Mngt:
Management: Mkg: Marketing; MO: Mail Order; Pr: Print; P&T: Personnel &
Training; Pf: Professional services; Pub: Publishing; R: Retail; SW:
Sweepstakes; Tel: Telecoms; T: Trade; T&C: Training & Conferences; T&D:
Training & Development; Trans: Transport; Tr: Travel; Ut: Utilities
Source: Marketing Direct 2009 List Report
LIST BROKERS LEAGUE TABLE
Rnk Company name Volume Inc/Dec List broking No of
traded on 2007 turnover staff
(names) (pounds m)
2008
1 Mailtrack Media 368.0m Increase 2.9 14
2 EDR 230.0m Decrease 6.5 19
3 Response One 141.0m Increase 7.1 16
4 Go Direct Marketing 52.0m Decrease u/d 4
5 Jaywing 41.0m Decrease u/d 4
6 Entire Direct Marketing 38.0m Decrease u/d 4
7 ListLab 33.0m Increase u/d 5
8 EDM Media 32.5m Increase 1.2 5
9 Cheryl Nathan List Broking 23.2m Decrease u/d 3
10 ICC Marketing Services* 21.3m Increase 1.8 3
11 Teleperformance 20.0m Increase 1 3
12 Datalytics 11.5m Increase 1.4 4
13 LISTS 10.0m Decrease 0.5 2
14 Caspian Partnership 9.7m Increase 1.2 3
15 Information Arts 9.0m Increase 1+ 3
16 RSA Direct 5.1m Decrease 0.4 2
17 Wyvern Direct Response 2.1m Decrease u/d 7
Rnk Company name B2C B2B Email Market
% % % sectors
1 Mailtrack Media 95 5 u/d R, FS, Ch
2 EDR 95 5 95 FS, L, R
3 Response One 90 10 12 Ch, MO, Ut
4 Go Direct Marketing 85 15 2 u/d
5 Jaywing 90 10 5 FS, MO, Ch
6 Entire Direct Marketing 100 - 16 MO, Pub, Ch
7 ListLab 85 15 20 Pub, Ch, MO
8 EDM Media 99 1 2 Ch, MO, FS
9 Cheryl Nathan List Broking 93 7 9 Ch, FS, MO
10 ICC Marketing Services* 70 30 15 u/d
11 Teleperformance 70 30 30 u/d
12 Datalytics 70 30 32 Ch, Pub, Tr
13 LISTS 99 1 u/d u/d
14 Caspian Partnership 80 20 20 Tr, P, FS, MO
15 Information Arts 20 80 30 Tel, IT, B2B
16 RSA Direct 30 70 10 u/d
17 Wyvern Direct Response 40 60 40 C&E, Tr, Ch
*Formerly Market Monitor and Prospect Swetenhams
u/d: Undisclosed; n/a: Not applicable
Non-responders: Uni-Marketing; Lloyd James Group; Media & Response
Specialists; Rapp Media
SECTOR KEY: A: Academic; Ag: Agencies; Au: Automotive; Ch: Charities;
Comp: Competitions; C&E: Conference & Exhibitions; Dir: Directories;
Ent: Entertainment; FS: Financial Services; H: Health; H&S: Health &
Safety; HR: Human Resources; IT: Information Technology; Ind & Man:
Industrial & Manufacturing; Inf: Information; L: Leisure; LS: Lifestyle;
Mkg: Marketing; MO: Mail Order; P: Property; P&T: Personnel & Training;
Pub: Publishing; R: Retail; SW: Sweepstakes; Tel: Telecoms; T: Trade;
T&C: Training & Conferences; T&D: Training & Development; Trans:
Transport; Tr: Travel & Tourism; Ut: Utilities
Source: Marketing Direct 2009 List Report
LIST MANAGERS LEAGUE TABLE
Rnk Company name Volume Inc/Dec List-mngmnt No of
traded on 2007 turnover staff
(names) (pounds m)
2008
1 tmnmedia 250.0m Increase 6.5 35
2 The Trading Floor 216.7m Increase 4.8 25
3 ICC Marketing Services* 76.6m Decrease 0.8 5
4 ListLab 61.0m Increase u/d 8
5 Response One 43.0m Increase 2.5 7
6 EDM Media 35.5m Increase 1.5 4
7 Go Direct Marketing 30.0m Decrease u/d 3
8 MarketingFile Group 23.0m Increase 3.1 20
9 Cheryl Nathan List Broking 20.6m Decrease u/d 3
10 Occam DM 14.6m Decrease 0.8 7
11 Caspian List & Data Management 12.5m Increase u/d 3
12 RSA Direct 11.0m Increase 0.7 3
13 LISTS 10.0m Decrease 0.5 2
14 Jaywing 10.0m Decrease u/d 5
15 Entire Direct Marketing 10.0m Increase u/d 3
16 Wyvern Direct Response 3.2m Decrease u/d 7
17 Teleperformance 2.0m Decrease 1 3
Rnk Company name B2C B2B Email Market
% % % sectors
1 tmnmedia 100 - 95 R, Tr, FS
2 The Trading Floor 100 - 43 FS
3 ICC Marketing Services* 65 35 40 MO, Pub, LS
4 ListLab 100 - 20 Pub, DRTV, MO
5 Response One 99 1 5 MO, Dir
6 EDM Media 100 - 1 Ch, MO, SW
7 Go Direct Marketing 95 5 2 MO, Ent
8 MarketingFile Group 50 50 18 Au, Mtg, MO
9 Cheryl Nathan List Broking 98 2 4 MO, FS, Ch
10 Occam DM 100 - u/d Ch, MO, FS
11 Caspian List & Data Management 90 10 10 MO, Ch, FS
12 RSA Direct 30 70 10 Pub, IT, Ch
13 LISTS 99 1 u/d MO, H, R
14 Jaywing 100 - u/d MO, Pub, FS
15 Entire Direct Marketing 100 - 5 MO, FS, Ch
16 Wyvern Direct Response 40 60 75 C&E, T&D, Ch
17 Teleperformance 90 10 10 MO, FS, Ch
* Formerly Market Monitor and Prospect Swetenhams
u/d: Undisclosed; n/a: Not applicable
Non-responders: Uni-Marketing; Lloyd James Group; Media & Response
Specialists; TRG Strata; Rapp Media
SECTOR KEY: A: Academic; Ag: Agencies; Au: Automotive; Ch: Charities;
Comp: Competitions; C&E: Conference & Exhibitions; Dir: Directories;
Ent: Entertainment; FS: Financial Services; H: Health; H&S: Health &
Safety; HR: Human Resources; IT: Information Technology; Ind & Man:
Industrial & Manufacturing; Inf: Information; LS: Lifestyle; Mkg:
Marketing; MO: Mail Order; P&T: Personnel & Training; Pub: Publishing;
R: Retail; SW: Sweepstakes; Tel: Telecoms; T: Trade; T&C: Training &
Conferences; T&D: Training & Development; Trans: Transport; Tr: Travel;
Ut: Utilities
Source: Marketing Direct 2009 List Report