At first glance, the UK's list industry had a remarkably positive year in 2004, enjoying strong growth. The top 28 list owners traded 5.9 billion names, an increase of 37 per cent on 2003. The top 28 list faired even better with a 53 per cent increase in the volume of names traded from managed lists (613 million) and list brokers saw volumes increase by 27per cent to pass the one billion mark for the first time (1.2 billion).
But as with any league table, the devil is in the detail. Although several companies saw good growth - often fuelled by acquisitions - many are still finding the market tough. There's plenty of evidence that the recurring issues of squeezed margins, poor quality data and declining response rates are still major preoccupations. And even though volume increases are impressive, this is the result of a few companies enjoying dramatic increases rather than across the board improvement.
Winners and losers
As in previous years Marketing Direct is sticking to its formula of ranking companies according to the volume of names traded rather than turnover. We also ask for company turnover related to the list area of their business. Where companies provide a figure, it makes interesting reading.
For example, among list owners, The Preference Service - which remains in tenth position - boasts the highest declared turnover at £8.2 million.
All of its income is list related compared to Thomson Directories which has the second highest turnover at £8million, but this represents only a fraction of its overall income at eight per cent.
The list owners league table tends to be the most volatile and this year is no different. Among the new names are Acxiom, coming in as the fourth largest data provider following its acquisition of Claritas and Consodata last year; Ebiquita which has only recently moved heavily into data provision and Transactis, which launched last April and evolved out of the Abacus data pool model.
But at the very top of the table there has been little movement. Thomson Directories still tops the table by some margin, thanks to its score of licensing deals for its business database of more than two million UK business listings. Experian sits comfortably in second position after a healthy year that saw the volume of traded names increase to 865 million.
CACI has also had a good year, something that managing director Paul Winters puts down to the success of its enhanced Electoral Roll product. The bulk of the company's activity comes from its two versions of the Electoral Roll, enhanced with additional data sources such as Bounty as well as lifestyle and demographic data. "We've had a successful year in winning some big prospect pools where we've supplied the full file or a substantial proportion of it," he says.
Given that the full file for tagging purposes numbers 44 million and the mailable file after suppressions stands at 35 million, it's not hard to see how CACI can reach a volume traded figure of 473 million.
The number of companies offering high-volume files to replace the diminished Electoral Roll data has certainly stepped up in this year's league tables. The Transactis database, TransAction, for example, is 26 million strong and features active mail order buyers from 35 of the top 50 UK mail order companies.
What is distinctive about TransAction is that while there is a closed user group of contributing members, the database is available to direct marketers across all sectors. "The majority of our income comes from financial services, charities and telecoms," says Transactis managing director Chris Morris. "Because everyone on the database has received a catalogue, made a decision to buy and is financially active in mail, there are strong conversion rates."
Enhancing list prospects
The data is enriched with demographic and lifestyle data from the likes of CACI and Acxiom - an enhancement process that seems to be a trend among the companies in this year's List Owners league table. It points towards a more intelligent use of multi-layered data which can only be good news for the industry.
Ebiquita, for example has recently expanded its analytics capability with the acquisition of B2e Consulting. "We are using more modelling and profiling techniques to add intelligence to the data," says Ebiquita managing director Andy Taylor. "You need that intelligence before campaigns work effectively".
Ebiquita is not the only company to have been on the acquisition trail. Tri-Direct, which has jumped ahead of Wyvern Direct Response to top the List Managers table for the first time, bought RFM Data last year. This increased its number of traded records by around 37 million, says sales managing director Steve Reid. "It was a big boost, but on top of that new business has been going very well," he adds, pointing to the Homebase database of 14 million records that it has picked up.
One new name in both the List Managers and List Brokers tables is Response One Direct Marketing. The Bath-based company has been running for seven years but has never before put its figures forward in league tables. This year it enters both tables in third position. It has some big consumer files under its belt including Britannia Music and Redcats home shopping brands such as Empire, Daxon and La Redoute.
Deputy managing director Sarah Brindley believes that the way data is being bought and sold in the industry is starting to change. "In the old days data was sold on base rental and that wasn't negotiable," she says. "That has changed and there is more negotiation, like mainstream media."
The company often gets involved in results-based negotiations. "We have a system in-house that allows us to load in the results for a set of data. We can then establish at what rate we need to buy it to make it cost effective for the client," adds Brindley. The company negotiates bonuses if it exceeds its targets.
Mark Arnold, director of list broking at Prospect Swetenhams, agrees that the industry needs to move away from a pure commission structure. "We tend to work to a very tight business model but that will have to change if this business is to remain profitable," he says. Because brokers are increasingly involved in campaigns from a planning perspective, Arnold believes that a combination of fee and commission might prove the answer.
Growth through diversification
Prospect Swetenhams has jumped up the List Owners table from 28th to 16th position. MD Hugh Bessant attributes its leap in volume (from 1.3 million to 56 million) to expanded use of Companies House data. "Last year we took on group responsibility for selling the full database. Previously we were only tele-verifying the top 100,000 records but now we're selling the complete 2.3 million file."
In an industry where margins are still very tight, it's little wonder that diversification is the name of the game. Equifax, one of the largest re-sellers of the Electoral Roll, has recently launched a new suppression product, disConnect, which takes advantage of its credit referencing data. "We have consciously thought that we need to expand and diverge," says market development director Graham Arrowsmith.
Equifax has dropped from third to sixth position in this year's List Owners league table, something Arrowsmith attributes primarily to the reduced size of the Electoral Roll. "For the 2004 capture we will have lost nearly 30 per cent of those people registering to vote. This is worse than last year but it's not catastrophic. If you go back to the days before the opt-out we were considering that 50 per cent could be possible."
Nonetheless Equifax has realised that it can't rest on its laurels. Alongside disConnect it has also launched an inverse product, reConnect, which traces people to a new address. And its new email append product boasts 16 million emails to enhance databases.
Email data has made its mark this year. Twenty eight of the top 32 list owners base some of their business on email names and PDV remains the biggest player in this market in 11th position. However while its volume dropped from 114 million to 90 million, Interactive Prospect Targeting (IPT), the second biggest online data provider, has had its best year ever, with trading volume of 44 million, up from 34 million in 2003.
2004 was quite a year for IPT. It floated on AIM in December, raising more than £4 million, underlining the credibility of this area of the list business. Direct group sales director Dan Bannister says only 50-60 per cent of revenue is list related. "In previous years we were more reliant on list sales but that is changing," he says, pointing to IPT's online market research service, IMRS and its email product EmailBureau.
E-data is an established part of the mix, but it isn't without its problems.
Many respondents highlighted the shortage of quality opt-in email data as a key issue and strict email legislation has had an impact.
The legislation has had two effects according to Wanda Goldwag, executive chair of PDV. "It has frightened off some reputable companies because the legislation is quite complex," she says. "And it has further criminalised the cowboys who are so far from being compliant that they now just don't care."
The knock on effect of this increase in spam is raising serious deliverability issues. "ISPs are valiantly trying to block junk mail but it can be a blunt tool," says Goldwag.
Focusing on profit
Email and SMS are still subject to the strictest data laws. But this year worry about the impact of data legislation - both impending and current - was knocked off its top spot in the issues table (see box, page 4) by downward pricing pressure. The list business works to tight profit margins and no company can afford to sit still.
For Acxiom, this has meant ditching contracts that were not profitable. The company has now consolidated and rebuilt its core national coverage and lifestyle products and is spending significantly on data. Managing director Dawn Orr says the company spends around £15 million a year on data collection, making it one of the biggest - if not the biggest - spenders.
"We are still predominantly paper based although telephone and online are growing," says Orr. "Most of our customers are still mailing and our analysis shows that if you want to mail, data needs to be collected in this channel to deliver a response."
Acxiom will be one to watch next year as it looks to benefit from acquisition. Whether further consolidation takes place remains to be seen. Rosemary Smith, managing director of RSA Direct, says a healthy mix will remain. "Set up costs are not high in broking and management, so we will always see boutique players alongside larger companies."
Despite financial pressures, this diversity should remain one of the industry's key strengths.
EIGHT BIGGEST ISSUES
1: Downward pricing pressure
2: The impact of data legislation
3: Shortage of new names on the market
4: Poor quality of data on the market
5: Clients compiling their own databases
6: Consolidation of data suppliers
7: Poor client understanding of the list business
8: Shortage of opt-in email names
Source: Marketing Direct survey
LIST OWNERS LEAGUE TABLE 2005
Rank Company Name Volume traded Incr/decr List related
2004 (m) on 2003 turnover
1 Thomson
Directories 1,400.0 same £8m
2 Experian 865.0 increase n/a
3 D&B 648.0 increase n/a
4 Acxiom 520.0 decrease n/a
5 CACI 473.0 increase £3m
6 Equifax
Marketing Services 450.0 decrease £8m
7 EuroDirect
Database Marketing 420.0 increase £4.8m
8 Wegener Direct
Marketing 220.0 increase n/a
9 Data Locator Group 121.8 increase n/a
10 The Preference
Service 110.0 increase £8.2m
11 PDV 90.0 decrease £1.5m
12 LBM 72.0 increase £5.6m
13 DBS Data 69.0 increase £2.9m
14 Ebiquita 68.0 increase n/a
15 Transactis 68.0 increase £1.5m
16 Prospect Swetenhams 56.0 increase n/a
17 Consumersketch 51.0 increase £2.1m
18 IPT 44.0 increase £4.3m
19 Dataworks 40.0 decrease £1.4m
20 Corpdata 25.0 decrease £1.9m
21 Entire 21.4 decrease n/a
22 Lifecycle Marketing 19.2 increase £2.4m
23 ListLab 10.0 increase n/a
24 Conduit Business
Information 8.0 increase n/a
25 VNU Business
Publications 7.6 increase £1.5m
26 Market Monitor 6.0 increase n/a
27 Whichlist.com 6.0 increase n/a
28 Dennis Publishing
List Solutions 5.5 decrease £0.7m
29 Evolution DM 4.2 increase £0.2m
30 Millennium Marketing
& Communications 4.0 increase £0.5m
31 Electric Marketing
Database Services 3.3 increase £0.7m
32 Haymarket Direct 3.1 increase £0.6m
33 AP Information
Services 2.9 increase £0.9m
34 The Bill Moss
Partnership 2.0 increase £0.5m
Rank Company Name % income % % %
list related B2C B2B Email
1 Thomson
Directories 8 0 100 6
2 Experian 100 70 30 5
3 D&B n/a 0 100 3
4 Acxiom 70 100 0 15
5 CACI 10 100 0 0
6 Equifax
Marketing Services 12 93 7 1
7 EuroDirect
Database Marketing 55 100 0 5
8 Wegener Direct
Marketing 100 90 10 n/a
9 Data Locator Group 100 90 10 15
10 The Preference
Service 100 100 0 7
11 PDV 58 100 0 95
12 LBM 15 15 85 17
13 DBS Data 80 50 50 20
14 Ebiquita n/a 100 0 5
15 Transactis 100 100 0 n/a
16 Prospect Swetenhams n/a 5 95 0
17 Consumersketch 85 96 4 5
18 IPT 52 100 0 90
19 Dataworks 60 100 0 5
20 Corpdata 90 0 100 74
21 Entire 36 100 0 5
22 Lifecycle Marketing 60 100 0 10
23 ListLab 20 100 0 10
24 Conduit Business
Information 60 17 83 5
25 VNU Business
Publications 10 99 1 40
26 Market Monitor 100 0 100 0
27 Whichlist.com 100 20 80 5
28 Dennis Publishing
List Solutions 99 90 10 35
29 Evolution DM 10 100 0 0
30 Millennium Marketing
& Communications 3 95 5 10
31 Electric Marketing
Database Services 100 0 100 10
32 Haymarket Direct 2 15 85 20
33 AP Information
Services 33 0 100 10
34 The Bill Moss
Partnership 80 - - -
Source: Marketing Direct.
LIST BROKERS LEAGUE TABLE 2005
Rank Company Name Volume traded Incr/decr List related
2004 (m) on 2003 turnover
1 Media & Response
Specialists 143.5 increase £6.5m
2 Tri-Direct 138.0 decrease £11.3m
3 Response One
Direct Marketing 135.0 increase £6m
4 Wegener Direct
Marketing 80.0 decrease n/a
5 Prospect Swetenhams 77.0 increase £7m
6 Cheryl Nathan
List Brokering 68.6 decrease n/a
7 Hilite Direct
Marketing Services 60.0 increase £5.2m
8 Go Direct Marketing 54.0 increase £3.9m
9 List Experts 52.0 same £3.2m
10 Ventura Media 34.0 increase £2.5m
11 Mokrynski International 30.0 same n/a
12 MM TelePerformance 28.0 increase £1.5m
13 Uni-Marketing 22.5 increase £2.1m
14 Entire 21.0 decrease £1.4m
15 ListLab 20.0 increase n/a
16 Marketing & Media
Solutions 20.0 same n/a
17 Occam 20.0 same n/a
18 Avongate 17.0 increase n/a
19 EDM Media 13.3 increase £0.8m
20 Millennium Marketing
& Communications 12.0 increase £1.1m
21 pounds istdollars 12.0 increase £0.7m
22 RSA Direct 11.0 increase £0.8m
23 NWA 8.5 increase £0.1m
24 Evolution DM 6.0 n/a £0.3m
25 Caspian Partnership 5.0 increase £0.6m
26 UK List and Press Services 3.3 increase n/a
27 ISIS Direct 2.1 increase n/a
28 Wyvern Direct Response 1.3 n/a n/a
29 The Bill Moss Partnership 0.9 increase £0.2m
30 Prime Prospects 0.6 increase £0.06m
Rank Company Name % income % % %
list related B2C B2B Email
1 Media & Response
Specialists 4.5 90 10 5
2 Tri-Direct 25 90 3 7
3 Response One
Direct Marketing 30 90 10 10
4 Wegener Direct
Marketing 100 65 35 5
5 Prospect Swetenhams 40 85 15 10
6 Cheryl Nathan
List Brokering 100 100 0 0.5
7 Hilite Direct
Marketing Services 95 90 10 0
8 Go Direct Marketing 42 95 5 0
9 List Experts 100 75 25 1
10 Ventura Media 100 95 5 7
11 Mokrynski
International 60 100 0 0
12 MM TelePerformance 4 80 20 2
13 Uni-Marketing 60 60 40 5
14 Entire 25 99 1 5
15 ListLab 25 70 30 5
16 Marketing & Media
Solutions 65 80 20 5
17 Occam n/a 99 1 0
18 Avongate 42 100 0 10
19 EDM Media 50 100 0 0
20 Millennium Marketing
& Communications 8 90 10 8
21 pounds istdollars 50 99 1 0
22 RSA Direct 63 50 50 12
23 NWA 100 50 50 30
24 Evolution DM 14 100 0 0
25 Caspian Partnership 65 60 40 20
26 UK List and
Press Services 15 100 0 0
27 ISIS Direct 30 98 2 5
28 Wyvern Direct
Response 5 10 90 5
29 The Bill Moss
Partnership 20 85 15 0
30 Prime Prospects 10 30 70 0
Source: Marketing Direct.
LIST MANAGERS LEAGUE TABLE 2005
Rank Company Name Volume traded Incr/decr List related
2004 (m) on 2003 turnover
1 Tri-Direct 167.0 increase £6.2m
2 Wyvern Direct
Response 47.0 increase n/a
3 Response One
Direct Marketing 35.0 increase £1.8m
4 ListLab 35.0 increase n/a
5 Evolution DM 30.0 n/a £1.4m
6 Prospect Swetenhams 29.5 decrease n/a
7 Go Direct Marketing 28.0 increase £3.1m
8 Cheryl Nathan
List Brokering 25.0 increase n/a
9 TRG Strata 24.0 increase n/a
10 Avongate 23.0 increase n/a
11 Uni-Marketing 22.0 increase £1.5m
12 Mokrynski
International 20.0 same n/a
13 UK List and
Press Services 19.0 increase n/a
14 Entire 15.5 increase £0.9m
15 EDM Media 13.0 same £0.7m
16 Holistic List
Management 12.1 increase n/a
17 pounds istdollars 12.0 increase £0.7m
18 MarketingFile 11.0 increase £2.3m
19 1 Stop Data 9.0 increase n/a
20 ISIS Direct 7.2 same n/a
21 Media Response
Specialists 5.6 increase £0.5m
22 MM
Teleperformance UK 5.0 increase £0.5m
23 RSA Direct 4.3 increase £0.3m
24 Caspian Partnership 4.0 n/a n/a
25 Lifecycle Marketing 3.5 increase £0.4m
26 Occam DM 2.5 increase n/a
27 Marketing & Media
Solutions 2.2 increase n/a
28 Millennium &
Marketing
Communications 2.0 increase £0.2m
29 Prime Prospects 2.0 increase £0.3m
30 Dennis Publishing
Lists Solutions 0.2 decrease £0.02m
Rank Company Name % income % % %
list related B2C B2B Email
1 Tri-Direct 13.7 95 5 10
2 Wyvern Direct
Response 70 25 75 5
3 Response One
Direct Marketing 36 100 0 5
4 ListLab 55 95 5 10
5 Evolution DM 75 100 0 0
6 Prospect Swetenhams n/a 70 30 0
7 Go Direct Marketing 35 100 0 0
8 Cheryl Nathan
List Brokering 40 100 0 0
9 TRG Strata 50 80 20 15
10 Avongate 58 100 0 15
11 Uni-Marketing 40 60 40 5
12 Mokrynski
International 40 100 0 0
13 UK List and
Press Services 85 100 0 18
14 Entire 15 100 0 0
15 EDM Media 50 100 0 1
16 Holistic List
Management 100 100 0 5
17 pounds istdollars 50 99 1 0
18 MarketingFile 100 47 53 0
19 1 Stop Data 40 0 100 0
20 ISIS Direct 50 100 0 0
21 Media Response
Specialists 1 100 0 2
22 MM
Teleperformance UK n/a 100 0 0.5
23 RSA Direct 29 60 40 5
24 Caspian Partnership 100 80 20 20
25 Lifecycle Marketing 10 100 0 5
26 Occam DM n/a 100 0 0
27 Marketing & Media
Solutions 10 90 10 0
28 Millennium &
Marketing
Communications 1 100 0 0
29 Prime Prospects 55 95 5 0
30 Dennis Publishing
Lists Solutions 3 100 0 0
Source: Marketing Direct.
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