April 17, 2007
SUMMARY: Renting a permission list for the first (or even third) time can be a bit confusing. What’s normal for transmission fees? How speedy is the turnaround? Should you pay extra for brand endorsement? Should you rent more names than the minimum to run a test? etc., etc.
Here’s a handy toolkit from MarketingSherpa to help you (also useful for training staff). Includes two sample contracts with key legalese noted, as well as a How to Read a Data Card PDF.
This MarketingSherpa Toolkit comes in three parts, each of which you can download as separate PDFs. (Note: If you share the word about this resource, please give folks the direct hotlink to this page. It will remain good for years to come.)
Part I: How to Read a Data Card
Every list on the market has an official “data card” for shoppers to review. The data card may be available online and also may be postal mailed to you. Although data cards from different managers can look slightly different, most share similar information.
It’s not everything you need to know to rent a list — but it’s enough to add the file to your “under serious consideration” pile. Discover what each part of the sometimes mysterious card means, and what critical questions you should ask in further research before making a buying decision:
How to Read a Datacard
Note: Yes, this is a real-life data card. We chose it fairly randomly and do not have an opinion as to the wonderfulness of the list it promotes.
Part II: Document of Legal Compliance
In addition to standard list rental contracts, some best-of-breed list owners and managers also distribute a Document of Compliance to elaborate on how their list gathering practices match the law and, most importantly, how they require your broadcast to be legal as well.
Laws are often shaded in gray until enough court cases define nooks and crannies of confusion. So just saying, “We obey the law and expect you to as well,” is not enough. It’s better to spell things out.
Most importantly, be sure to review the “Suppress File” information on page three. We recommend that no marketer or manager do rental business without agreeing to this.
Here’s the PDF link:
CAN SPAM Compliance Document
Note: The Document of Legal Compliance we chose for this exhibit is a real-life document from a list manager we regard quite highly. It’s extremely well worded, and we feel it could be taken as an example of best practices. That said, we’re not lawyers. If you’re considering signing a document or creating your own, please consult legal counsel first.
Part III: List Rental Contract
No one should ever rent you a list without requiring that you sign a contract first. Some things to be sure to look for in the fine print:
o Landing page requirements:
Is a hotlink to your privacy policy required on your landing page? It’s a best practice … however, in our experience many Web designers forget to put that link on landing pages or registration forms. Make sure you conform.
o Advertisement disclosure:
If the list owner wants to include language on your creative making it clear your broadcast is an ad, that’s fine and dandy. Except, the word “advertisement” may be filtered by content-based filters (especially a problem for B-to-B sends.) So, you may need to negotiate to a less problematic, albeit equally clear, word.
o Suppression list:
Are you ready to hand over your Do Not Email (DNE) list for suppression purposes? If you’re renting with a reputable firm you’ll be required to. However, you may be able to negotiate using a third party merge/purge house to run the suppression on your behalf as an intermediary if you are extremely concerned about security. Also, be sure to check your own privacy policy wording to be sure if you need to use that third party or if you can hand over the DNE list directly.
Here’s the PDF link:
List Rental Contract
(note: sample is as of April 2007)
Note: This real-life sample is one of the more thorough contracts around. Many are only one page long. Those are not bad at all — we chose this one because we wanted you to see the full realm of contractual possibility. If your legal team is cool with this, getting them to sign off on shorter contracts will be a breeze.
More Useful links related to this article:
Companion Sherpa Tutorial on renting email lists:
http://www.marketingsherpa.com/article.php?ident=29930
List managers and brokers that assisted with this toolkit:
Bethesda List Center:
http://www.bethesda-list.com
DM2-DecisionMaker:
http://www.dm2decisionmaker.com
IDG List Services:
http://www.idglist.com
Millard Group:
http://www.millard.com
From Marketing Sherpa
http://www.marketingsherpa.com/article.html?ident=29939
Posted by copiasolaris under How To's | Comments (0)
April 14, 2007
SUMMARY: If you think the world is oversaturated with newsletters on every subject imaginable, think again. Endless niches exist that publishers aren’t taking advantage of, says an exec who has helped develop newsletters for two organizations with millions of subscribers.
Why not? Although there are barriers to overcome, the results are worth it. Includes tips on building your list, advertising and content, analysis and segmentation and costs involved.
Rather than use an email newsletter as a marketing tool or as an add-on for existing customers and subscribers, a small group of publishers has made the newsletter itself the primary business and, as a result, turned it into a massive, ad-supported revenue machine. The idea seems simple: you build a huge list of opt-in email addresses, deliver relevant daily content and then offer ad space.
Some of the most successful companies in this market include BeliefNet, with 12.57 million subscribers, and LifeScript, with 6 million+. With the potential for each name to return double or quadruple the amount spent to acquire it, these businesses can have a quick path to profitability, says Sujay Jhaveri, CEO Flatiron Media, who spent time at Beliefnet and iVillage.
In fact, Jhaveri says the business model will become more compelling as the costs of other traffic-generating techniques, such as paid search, continue to increase. “Compare the two models. You just spent 50 cents to get someone to click on a search ad. Unless you do something with that person on the first visit, they’re gone and there’s no way of reaching out to them again. In the case of a newsletter, you’ve spent 50 cents to acquire a name with permission to send them content on a regular basis and drive them to your site. It’s a much more cost-effective model.”
So, why isn’t everyone pumping out mass-market newsletters?
For starters, a handful of significant (but surmountable) barriers exist — from staffing and infrastructure requirements to a savvy approach to analyzing email metrics. No worry, in our exclusive interview, Jhaveri offers tips to handle seven of the most critical issues in the newsletter business:
Tip #1. Steady supply of names
If you’re trying to create a standalone newsletter, you’ll need 500,000 to 1 million subscribers to attract attention from advertisers, Jhaveri says. The only way to get there is to work with consumer lead generation sites to collect opt-in names.
Working with companies such as Q Interactive, CoregMedia and Webclients, you can put a checkbox on a suite of websites where consumers can opt in to receive your content. Starting from zero seems daunting, but assuming that you have high-interest content with a broad target market, you can collect 1 million to 2 million names a month through such channels, he says.
But be prepared to pay for those names: each opt-in can cost between 40 cents to $1.00. Still, each dollar spent can return $2 to $4 in advertising revenue, says Jhaveri, and you can recoup your investment in as little as eight weeks.
Name acquisition remains a perpetual task to grow the business and replace lost names due to unsubscribes or hard bounces. Although Jhaveri says the rate of name attrition varies widely depending on the product, MarketingSherpa data has found that large lists experience 38% annual attrition.
To counter-act this, you must develop a consistent marketing plan to add new names based on those attrition rates and on the performance of different lists from different sources (more on this later). “You don’t want to add 5 million names this month and nothing next month.”
Tip #2. Appealing content
Obviously, the content has to be appealing to get people to opt in and open your newsletters. Fortunately, Jhaveri says it’s not hard to find a category or subject to tackle. Here are his suggestions on content development:
o Subjects with high interest to a large swath of consumers. Many successful newsletters tackle topics such as health, family, entertainment, food, fashion or beauty.
o Frequent delivery. A daily newsletter is the best model because it gives advertisers the most opportunities to put their offers in front of readers.
o Short, valuable content. Delivering something daily means you want to give subscribers small bites of information that they’re likely to open. Jhaveri suggests no more than 300 to 500 words. Those bites have to be appealing, though, so the most successful models usually employ a service or entertainment model (e.g., a health tip of the day, a daily recipe or a famous quotation).
Tip #3. Ad sales strategy
Once you have a list and a product, you need to attract advertisers to begin making money. Here are a few strategies for designing your advertising model:
- Balance the amount of content and advertising. There’s no formula for the right number of ads in a newsletter, so you’ll need to test a range of different sizes and placements. BeliefNet offers five ad sizes in four positions, for example.
Jhaveri says the 300 x 250 has been the best performing size for newsletters, but, depending on design, the addition of 728 x 90 banners and other smaller ads makes sense, too. You can also offer text ads to increase revenue without cluttering the page.
- Either build your own sales staff to sell ads or turn to an outside rep firm to handle sales for you. Startups likely will have to use an outside firm to sell ads while building their business, which means your margins will be lower.
But Jhaveri cautions that you need to have revenue in the millions of dollars annually, as well as the internal ability to support a sales organization, which not only requires a staff but management and other operational support.
- For companies with existing websites or other ad-supported products, newsletter ads can be sold separately or bundled with other placements. The right approach depends on the size and demographics of the newsletter audience and whether it offers different characteristics from your other products that would appeal to different advertisers.
Tip #4. Staff to prepare the newsletter
There is a host of ways to generate content, depending on the nature of the company developing the newsletter:
- Publishers with existing content on a website or in a print publication can repurpose it and push it out to a new list of subscribers in a newsletter.
- Companies without existing content can hire staff or freelancers to write newsletters.
- For health newsletters and other specialized subjects, publishers should license content from reputable sources.
- Free content is available for repurposing, too, such as books in the public domain or the Bible.
The cost of content development will vary depending on the model you choose, but Jhaveri says paying writers or licensing content won’t be a significant expense compared to other needs, such as name acquisition or infrastructure.
Still, this doesn’t mean you can just slap anything into a newsletter and expect the model to work. “Users can tell if they’re dealing with cookie-cutter content or something with unique value.”
Tip #5. Own your email infrastructure
Here’s where some of the bigger challenges arise. While it’s easy to create content and gather names, pumping out millions of emails a day is a different story. With the growing complexity of spamming regulations and individual ISPs’ anti-spam measures, you need an infrastructure and in-house, technical know-how to handle issues, such as throttling rules (how many messages can be sent per IP address in a given period of time).
For the most part, email service providers can’t handle the task — or can’t handle it affordably when you factor in the cost to send millions of messages. “Every ESP says they can offer a better deal, but, ultimately, you don’t want to have a significant piece of your cost structure in email delivery. You want to spend your money on your marketing expenses.”
This means you need to buy your own hardware and software, including:
- Mail transfer agent servers. These are used to send the emails, staggering mailings to handle issues such as ISP throttling rules and handling multiple sending IP addresses. Each unit, which costs $10,000-$40,000, can typically handle 500,000 to 1 million messages an hour. Vendors include StrongMail and IronPort.
- Campaign management software. This is the intelligence behind the system. It segments the database based on any number of factors, picks the right lists and right IP addresses, inserts the right creative and handles all the tracking and reporting tools.
Unfortunately, Jhaveri says, no off-the-shelf product does the job properly, which means custom development. “The more sophisticated you get, the more likely you’re going to have to build you own code.”
Tip #6. Deep analysis of email metrics
Owning a powerful database and tracking tools plays into what is perhaps the most important aspect of running a successful newsletter business: the ability to track data and analyze metrics.
Some of the analysis is fairly straightforward. You need to track basic metrics, such as deliverability rates, opens, clickthroughs, etc. The analysis gets trickier in relation to your marketing efforts.
One of the most important tasks is analyzing the quality of the names you’re acquiring so you can determine which co-registration sources are giving you the best results and which ones you should stop using. The idea is to keep track of how much you’re spending on names from different sources and then see how those names perform over a period of three to six months.
Here, you must be able to segment your list by acquisition source and the date you acquired the names to track and compare factors, such as:
o Open rates
o Clickthroughs
o Unsubscribe rates
o Ad revenue per list
o Payback rate
o Lifetime value
Tip #7. Manage offers
Besides helping determine sources of quality names, this kind of tracking also helps manage your offers to existing subscribers to maximize revenue potential or minimize list churn. “Ultimately, it’s about yield management. You’re trying to maximize the performance of every source you have rather than bundling all your names into one list.”
Here are a few examples of how to do that:
- For subscribers with low open rates, you might offer a weekly digest form instead of a daily email.
- Loyal openers and clickers might be a target audience for cross-selling opportunities, such as offers to subscribe to another newsletter or other promotions.
- If you learn that new names perform best in the first month, you can establish an automated, timed series of offers to go out to take advantage of the honeymoon period.
Useful links related to this article
Case Study on DailyCandy’s newsletters:
http://www.marketingsherpa.com/article.html?ident=23379
Special Report: Renting Email Lists – Costs, Deliverability & Targeting:
http://www.marketingsherpa.com/article.html?ident=29930
CoregMedia:
http://www.coregmedia.com/coregistration.php
IronPort:
http://www.ironport.com/
Q Interactive:
http://www.qinteractive.com/
StrongMail:
http://www.strongmail.com/
Webclients:
http://www.webclients.net/
Beliefnet:
http://www.beliefnet.com/
Flatiron Media:
http://www.flatironmedia.com/
LifeScript:
http://www.lifescript.com/
From Marketing Sherpa
http://www.marketingsherpa.com/article.html?ident=29934
Posted by copiasolaris under Interviews | Comments (0)
April 11, 2007
SUMMARY: Renting email lists can be tricky (think bad lists, CAN-SPAM and filtering). But here’s the good news: Three years ago, only 10% of rentals were deemed safe for reputable emailers, but that figure has nearly doubled because marketers are getting smarter and demanding cleaner, more targeted lists.
How do B-to-C and B-to-B marketers get their hands on a good list, and what are the best practices? In the first installment of a two-part series, we’ll tell you everything you need to know before sitting down with a broker.
Several attendees at last month’s MarketingSherpa Email Summit raised basic questions about list rentals. With search prices so high and email prices relatively steady, many marketers are taking another look at list rental. So, we figured it was time to research the topic again and talk to experts about the latest concerns.
There are plenty of email lists to choose from, and they cover just about every niche imaginable. From talking to several list brokers, the size of the industry is anywhere from 5,000 lists to 20,000. The B-to-B list rental business is healthy and centered on reputable publishers who still command value and trust. The B-to-C list industry is less organized, and many lists aren’t worth a dime. But if done properly, you can succeed.
“Marketers have gotten smarter at viewing email and list rentals as part of an overall mix rather than a golden-egg, end-all solution,” says Andrew Sambrook, VP Brokerage, IDG List Services. “What you are seeing now is an evolution of the medium. More and more people I deal with see it as one of the touchpoints they need to move someone progressively down the sales cycle.”
-> Step #1. What’s a list rental and what should you ask your list broker
First a definition: A list rental is the purchase of a third party’s email list for one-time use (unless negotiated otherwise). The emails are sent on your behalf using your creative and your subject line to a list of people who have knowingly signed up to receive email offers from the named list owner. Other points:
- You review the lists on the market by looking at their data cards. List managers and brokers include these on their sites. (In Part II, we’ll include sample data cards and show you how to read them.)
- This is not affiliate or co-registration (see hotlinks below for more on that).
- You never get access to the list of email names.
- The name of the company in the “From” line is the list owner’s, not yours.
- You and the list owner agree on the number of recipients and the send date/time.
- You forward the creative.
- Have the list run against your supression Do-Not-Email list (see CAN-SPAM below).
- The list owner sends from their server.
If you haven’t rented before, be sure to not only research which list brokers are best for your niche, but also request tests and negotiate for the best trial prices. Plus:
o You have to be experienced at measurement if you want to be successful at renting
o You have to be good at measuring lifetime customer value
-> Step #2. Lists that work best, plus costs to rent them
Before testing a list — much less renting one — ask who else has been renting the list in continuation to get a feel for what marketers are having success with the brand and if it makes sense for your brand. Look for marketers with good direct response reputations who repeatedly use the list. They must be seeing decent metrics on the back end.
“You never know how many emails are going to break through the clutter,” says Elizabeth Arnold, Associate Marketing Manager with Rand McNally, who has tested B-to-B lists to generate leads for their mapping/locator API. “You have to make sure it’s targeted. Small lists are usually better.”
You’ll hear a lot of different pricing numbers out there (and we’ll address this more thoroughly in Part II of this Special Report), but for the time being, let’s state that targeted consumers lists are running anywhere from $90 to $160 per thousand names (CPM). Prices range from $65-$125 per thousand names for larger, aggregated databases.
For B-to-B, lower-end aggregated small business or opportunity seeker lists start around $75 per thousand. The higher-end lists targeting controlled circ publications and taking aim at specific groups, such as CFOs, can run as high as $300 per thousand names.
Make sure you’re renting lists that are double opt-in (emails are gathered, but rather than added to the list immediately, the names are sent a secondary email requiring a response to opt in to the list). To be completely sure:
o You may want to check the opt-in form personally to be sure it’s clear.
o Sign up for the list yourself and watch what else you get.
-> Step #3. Deliverability and CAN-SPAM considerations
Anyone marketing with a rented list — especially heavy emailers — needs to ask the list owner/broker to run a suppression file. In short, suppression files remove records from a database that are no longer accurate or current, or a name and address that one has an obligation to remove.
More specifically, for both CAN-SPAM and branding concerns, you have to ask the list owner to run their names against your “Do Not Email” file and “Unsubscribe” file.
MarketingSherpa also advises that you provide two kinds of opt-out links for campaigns involving rented names: a regular unsubscribe button and a “Do Not Email” option.
The difference between the two is that unsubscribes get scrubbed from *your* list, while people getting placed into the Do Not Email file represent a faction who haven’t joined your list in the first place. You need to have the mechanism in place to act on their request that they do not want to hear from your brand via email. You do not have the right-of-way to email them more than once simply because you paid for their name.
You also have to include a physical street address at the bottom of your creative to keep in accordance with CAN-SPAM. And, make sure to have the time/date stamps for all of the rented addresses at your disposal. The good news is that these types of datapoints are becoming more granularly available.
“When a recipient complains, what you should do is go back to that record and find out where that person opted in,” says Rob Fitzgerald, VP Interactive Division, Walter Karl. “And you can say, ‘On April 5th at 2:30 p.m., you might not remember, but you opted in to receive third-party information.’ You can validate what you are doing.”
Another tip: give a staffer the subtitle of “Reputation Manager” to keep an eye on blacklists and abuse email groups. He or she should check these weekly if not daily, while also keep watch of both partners’ and competitors’ campaigns by opting into all of their programs. They also should keep separate email files for each partner and/or competitor, vetting affiliates’ campaigns to make sure they are maintaining best practices. You cannot wait for your prospects to complain.
And, of course, your offers have to be relevant to what they opted in for; otherwise, your message is going to be treated by the recipient as junk and your reputation will suffer. Other suggestions:
- Watch to see if the list owner switches IP addresses
- Set up dummy mailboxes to catch junk
- Verify the original point of name collection
-> Step #4. Creative that works best
Do not assume that your top-performing house email creative will test well with a rented file. In fact, Sherpa recommends that you develop completely separate creative for your acquisition campaigns. Many marketers new to renting will test their best campaigns on a rental, see crappy results and say, “Whoa, rentals don’t work!”
Not necessarily.
Remember that the recipients are in a different point in the relationship than your past customers — they are brand-new to you! And do not hold the belief that since you are a well-known brand (if that’s the case) that the identity will equate into an automatic email relationship. Email relationships have to be established on their own.
For introductory campaigns, use benefit-driven copy (as opposed to offer-driven copy, which works better for your house file). You want to give them an idea of who you are.
Most consumers and businesses are a little afraid of getting hoodwinked online, so give them evidence that suggests credibility. For instance, use an “About Us” box on your landing page to say, “Here’s who we are and what we offer.” Or, tell them if you have 2 million repeat customers or have been in business 17 years.
In short, establish “trust points.” If the list owner comes from a high-trust brand, mention “as recommended by Business 2.0” or “brought to you with permission from Business 2.0″ on the landing page.
-> Step #5. Measurement and considerations when conducting a list rental test
You don’t know how bouncy the list really is — because we can only truly measure hard bounces. For instance, 97% delivery rates don’t take into account the number of emails going into filters. So, the only certain way of accurately assigning value to the list is to look at the opens, clickthrough rates and what percentages of those numbers are converting to sale in your test.
“There are thousands of email lists on the market, but less than 20% of them [B-to-C and B-to-B together] are worthwhile,” says Josh Perlstein, President Response Media, a list brokerage firm. “It’s important to test, and it’s key that you use single-source lists or transparent-source.”
And, don’t be afraid to ask a broker how many names on a list should equal 100 clicks. That equation can take you a long way in the test assessment. Then, do the math to determine what results meet your criteria.
Generally speaking, if you run a test for 5,000 names, you can’t always be sure about the trial’s accuracy. It’s not exactly earth-shattering news, but the fact remains that a minority of less-than-above-the-board list owners/brokers might quietly send your test campaign to 10,000 in order to raise the response rate and get you on board for a huge buy. (Of course, no list company that we would be caught dead speaking to.)
Also ask if the list has a recency selection. Recency makes a big difference in response rates. Many list owners don’t charge extra for this, but it’s often not on the formal rate card. Plus, only 25% of lists offer recency.
Really large list buys can contain names already in your house file. Both B-to-C and B-to-B publishing marketers should be especially wary of paying for those names.
“Certain lists — we’ll see up to 40% duplication,” says Nicole Delma, Email Marketing Coordinator, Conde Nast. “We often request a sample in order to run a test. Or we will have a third-party vendor run a check of our list against theirs, and that will help us with the pricing. When we do go to a third-party vendor, the reason is because there’s a code or a demographic that we do not collect in our database.”
4 Specific B-to-C Tips
Tip #1. Study all of the possible demographic segments and values — because it can be a lot like car sales in that they will try to sell you a lower-valued demo and mark them up. If you overpay, you’ll lose the profitability.
Tip #2. Give yourself enough time to get at least three to five quotes.
Tip #3. Try to rent from marketers who don’t email more than twice a week.
Tip #4. Advertisers need to know where the addresses originated from. Find out where the names are collected URL by URL. Know what they opted in for.
4 Specific B-to-B Tips
Tip #1. There are more opportunities for more targeted lists than there were just a few years ago. You can target the IT market by renting CIO Magazine’s list, as just one example.
Tip #2. Don’t be surprised to see a list deal where you also have to buy a webinar and a space ad. Such arrangements may or may not be in your favor.
Tip #3. Take note of domain name expirations in the news (publications/vendors/software firms) and scrape them from your campaigns.
Tip #4. Selects are still important, but don’t forget about source. You can tell a lot about the potential effectiveness of a file by looking at the source.
Useful links related to this article
Past Sherpa articles on email list rental:
https://www.marketingsherpa.com/article.html?ident=2331
http://www.marketingsherpa.com/sample.cfm?contentID=204
http://www.marketingsherpa.com/article.php?ident=29333
Past Sherpa co-reg reports:
https://www.marketingsherpa.com/article.html?ident=2281
https://www.marketingsherpa.com/article.html?ident=2281
https://www.marketingsherpa.com/article.html?ident=2283
IDG List Services
http://idglist.com/
Response Media:
http://responsemedia.com/home.asp
Walter Karl:
http://www.walterkarl.com
Conde Nast:
http://www.condenast.com
Rand McNally:
http://www.randmcnally.com
From Marketing Sherpa
http://www.marketingsherpa.com/article.html?ident=29930
Posted by copiasolaris under How To's | Comments (0)