Dying for Change
By: Doug Sacks, Columnist, Sept 2005
Direct Marketing International

THE LIST INDUSTRY is going through turbulent changes. Yet direct mail still drives direct marketing here and abroad. Will this continue, or is the list industry dying? If so, "Who is killing the list industry? That was a session topic at last month's List Vision Day -- an annual one-day conference sponsored by The (USA) DMA's List Council.

In years past, List Vision has been a combination of Database Marketing 101 and a whinging contest by list brokers who are finding the going getting tougher but are never willing to make substantive changes. This year presented a much better mix of sessions and topics and a better attitude. Less complaining and more practical information. To counter the criticism that the sessions were too basic and to attract higher-level people to the conference, an executive summit was added for senior level list people.

The two executive summit sessions were good. Part I's panel consisted of data owners, voicing their concerns about the industry. Topics included:

• Co-operative databases replacing list rental;
• Modelling and analytics needed to cut costs;
• Concern over who data is being sent to;
• Emailing files -- no controls here;
• Not enough diligence by list managers;
• List owners removing their lists from the market due to security and privacy concerns;
• Re-usage is worrisome;
• Present forms of list rental agreements not worth the paper they are printed on;
• Concern about the analysis being done on their data. If analysis is being done on non-responders, these names, historically, still belong to the list owner.

Part II's panel consisted of industry leaders discussing issues facing the industry:

• Privacy legislation -- industry is reactive. Needs to be pro-active;
• Shrinking list universes leads to saturation and fatigue which in turn requires more and more analytics;
• To survive, list companies must aggregate services and own the analytics they provide;
• How the Internet has changed everything;
• Affinity and search engine marketing;
• Need to evolve beyond just postal lists and embrace all marketing channels;
• Must learn more to survive as more and more of what list companies have been providing is now being done by non-list companies -- especially online;
• Clients demanding lower and lower commission percentages;
• Escalating consumer disillusionment.

Concurrent with Part II was the session on privacy alluded to in my opening sentence. Full title was: Suicide Prevention: Let's not Kill the List Industry.

So what is killing the list industry?
Much of what has been listed above. But added to this was a refreshing insight -- the admission that there has been a lack of list broker due diligence.

Holy grail

No-one wants to turn away business, but the onus is now on the list industry to police itself and especially to research, identify and know its own customers. No more blindly accepting and placing orders. Laws are in place and more will follow that hold the list company liable for fraud and identity theft stemming from a client's marketing campaign or access to data.

This will create much more work and will force more list companies to turn down business in an industry that is already viciously competitive and fighting for every penny it can generate.

Chicca D'Agostino, president of list brokerage company Focus USA and a member of the DMA List Council, was very frank:: °Sure, we have had some tough years and we still have challenges. But we can't let the bottom line become the holy grail. We need to work together and DEMAND of each other that we all follow the rules.

°It is up to brokers, managers and list owners to take the lead and reject fraudulent or deceptive copy.

°If we don't seriously address the issue of consumer privacy, we might as well invite the government to become our industry partner . . . and it won't be a 'silent' partner."

I couldn't agree more.The list industry is not dying, but changing. Those companies that can't or won't change will die.