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When it comes to sharing data, brands are in a quandary. Fiercely protective of their customers, they are keen not only to increase their value, but also to find more like them.

The more a brand knows about existing customers, the better placed it is to target them effectively. Understanding existing customers also helps in the search for similar prospects. It sounds simple, but to get to this point requires not just work but data - and good, new data is increasingly hard to come by. One way to get it is to share what one has with other brands by joining a data pool.

But data pooling is beset by misperceptions. For every organisation convinced by its benefits, there is another that is not so sure. "Data pools have many benefits," says Nigel Lennane, Club Canvasse manager at Experian Marketing Services. "They are a powerful source of data. Not only do they enable you to target prospects similar to existing customers, but also to gain a greater understanding of existing customers. And the way they're collated means they're often cheaper than other data sources on the market."

And with many brands attempting to treat prospects more seriously and improve response rates, according to Clive Rumsey, sales director of Brainbox, data pools could have a place here. "It's not simply about mailing several million per campaign and hoping we get the response of the previous one," he says. "We have to look at ways to enhance the data available to us, whether it's through analytics or gathering the data from a data pool. In the long term, we're in a situation where we need to try to gather as much information about prospects as possible, and data pools have that potential."

Put like this, joining one sounds like a no-brainer. But a question on the lips of those still hanging back is this: just how safe is it to join a pool?

As in any relationship, being part of a data pool requires give and take, and it's the giving that's often the problem. "We have the perception that we'd be giving away our crown jewels," says Emma Reid, head of customer information at the Saga Group, one brand hanging back from joining up. "What would we get back?"

This is the crux of the issue: a brand has to put in to take out, and the more brands that are put in, the more useful and interesting the data held in that pool becomes for all. Conversely, the more open a brand is, the more of its valuable customer data it is handing over to other brands, even competitors.

What Saga and many other brands don't want to do is put in a lot of valuable name and address data that other pool members could take straight out and target with their own offers.

Part of many a marketers' mindset is the idea that the people on its own customer database somehow belong to that brand. On the other hand, this month's Think Tank participants understand that an individual could be as many as 100 databases.

More lateral than literal

Of course, each database owner will hold different data on each customer, and it's this that no one wants to hand over. Although this a valid fear, one Think Tank attendee points out that marketers often think more laterally than literally. "It very much depends on the market you're operating in, but often it's the transactional and mindset information that's more important," says Suzanne Lewis, director of list broking services at HLB.

"We're finding some less obvious connections," agrees Chris Morris, managing director of Transactis, which provides transactional data on the UK's 26 million mail order buyers. "If you buy a lot through the mail, for example, you're a good charity donor."

So the same person might be just as valuable to two very different brands, both of which could target that individual without stepping on each other's toes. And if safeguards are in place to ensure competing brands don't have access to each other's data, says Reid, the reticence shared by many marketers can be overcome.

"We're very protective in terms of not wanting other direct marketers to approach our customers, but if we can have confidence that our brand offers them something different, that turns it on its head," she says.

It is this premise that drives the Jigsaw Consortium. "When Cadbury, Unilever and Kimberly-Clark started the consortium, the idea was to share data because they were non-competing," says Nick Orsman, general manager of the Jigsaw Consortium and management partner and head of consultancy at OgilvyOne.

Controlled environment

In practice, this has entailed data being tightly controlled, and Jigsaw has decided not to open itself up to the marketplace as a data pool. So far it has largely made names and addresses available, but within a strictly controlled environment. Opening it up to a wider audience would be something else, says Orsman. "I worry that you'd lose that granularity, that descriptiveness a client wants from the company marketing the data pool," he argues.

His concerns highlight the issue of brands being selective about who and what they give access to as pool members. To avoid this, managers must not allow members to set their own rules in regard to the data they put in or take out, say the panellists. "Otherwise it can get quite complicated," says Lennane. "You could have one party wanting to exclude another, but then their names are on three or four other databases within the co-op, so who's to say they own rights to that name?"

Everyone has to play by the same rules. "This is why it's easy with Jigsaw," adds Orsman. "Once data is in the pool, there's a limit to how many times a household can be contacted, but everyone has to accept that it's in the pool and, as long as we're not selling it to competitors, it can be used."

Panellists also voiced concerns about the nature of the data going into a pool and how effective it can be in the long term. There was a feeling that what might initially generate a strong hit might diminish over time because everyone would be using the same data repeatedly, exhausting the pool.

But there are ways to avoid this, as Andy McDermott, managing director of Abacus UK, explains. "To address the issue of list fatigue in data pools, we recently introduced 'contact history'," he says. "This monitors how many times within a given period Mrs Smith has been mailed by health companies, for example. We will often suppress certain names that have been taken by similar companies. It means we might be supplying less data, but we're taking more responsibility."

And with consumer perceptions around DM already at an all-time low, this is something everyone agrees needs to be done.

The other issue is that even when it's being updated, the same old type of data is going in. "One of the things we've been doing is to try and encourage brand managers to think about 'golden questions': five or six pieces of data that are key to the brand," says Jigsaw's Orsman. "If they're doing that, the chances are that some of the non-competing stuff could be pooled. That could be valuable because it's new data, but my worry is that it's the same old pieces of data that are going into pools."

Rising opt-out levels

Getting more interesting information from consumers means asking them more questions, but one of the challenges here is overcoming negative perceptions of DM. John Regan, managing director of data firm Intuistic, points to last year's Brassed Off Britain vote and the rising opt-out levels from the electoral roll as signs that consumers need more persuading to give data to marketers. "If you went to the average consumer, they'd say too much information on them is available," he says. "But if they allowed more to become available, marketing would become more appropriate. That's the big challenge for data pools."

Lewis is dubious about how accurate the data would be. "People rarely know what they want in advance, or they do one thing and perceive another," she says. Lewis wants to see more cherry-picking of targets, rather than mass mailings going out only because they're cost-effective.

There's also a question mark over exactly what type of organisation data pooling works for. To get a constant input of fresh data, there has to be constant consumer activity. "You need regular repeat purchase," argues Morris. "I don't think you can make data pooling work for occasional purchasing."

McDermott concurs. "There have to be certain dynamics in the marketplace to say it's appropriate for data pooling," he says. "You're looking at frequent multiple purchases. In financial services, for example, where people tend to have only one mortgage or one pension at any one time, and there's stronger loyalty and a high cost per acquisition, it would be less appropriate than with a sector such as mail order."

Rumsey feels too much emphasis is placed on what a data pool can achieve. "Some brands believe it has to be a data pool or nothing, but the data pool is not the Holy Grail," he says. "It has to be part of an overriding data strategy."

And this is something marketers are starting to do. Morris sees data pooling growing across the board - from charities and telecoms to mail order and financial services - and believes it is a positive sign that the direct marketing industry is maturing. "There is a degree of risk from sharing data, but I think collaboration is increasing, and that makes us more sophisticated and mature as an industry," he argues.

And for those still hanging back, McDermott says he can't see what all the fuss is about. "Given that you're under no obligation to remain a member, it's difficult to see why you wouldn't test it," he says. "Everyone says there's a shortage of good data coming on to the market, so why wouldn't you test any source you haven't yet tested?"

THE PANELLIST LINE UP

ANDY MCDERMOTT, managing director, Abacus UK

McDermott joined Abacus UK in 2001, becoming MD in 2002. In November 2004 he led the launch of the Abacus B2B Alliance.

JOHN REGAN, managing director, Intuistic

Regan has worked at The Daily Telegraph, Reuters and Claritas. He was European business development director at EHSBrann Discovery, founding Cognisance in 1999.

CHRIS MORRIS, managing director, Transactis

Morris launched Abacus Direct Europe in 1998, then Transactis in 2003. Before this, he worked at NDL International and Claritas.

CLIVE RUMSEY, sales director, Brainbox

Rumsey joined Brainbox in 2004 from EHS Brann Discovery. Before that, Rumsey was new business director at Cognisance.

SUZANNE LEWIS, director of list-broking services, HLB

Lewis has worked at HLB for 14 years. She is also a member of the DMA Data Council and DMA Governance Committee.

EMMA REID, head of customer information, Saga Group

Reid has worked at Pinpoint and CACI, joining PPH healthcare as database manager in 1997, before joining Saga in 1999.

NICK ORSMAN, general manager, Jigsaw Consortium, management partner and head of consultancy, OgilvyOne Worldwide Orsman has more than 20 years' experience in direct and database marketing.

NIGEL LENNANE, Club Canvasse manager, Experian Marketing Services

Lennane helped to launch Experian's home shopping data co-operative in 2000.

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