Two Views of the State of the List Industry

Direct marketing budgets are being drastically cut. And that means traditional list marketing has to change.

"Over the past six months, marketers have pulled back on their demand creation activities and have shifted focus to nurturing leads currently within the sales funnel," says Brian Hession, founder and president of Oceanos Marketing. "We have recently observed a significant uptick for custom prospecting data."

"The economic recession, coupled with a wider portfolio of creative options, will phase out the traditional list brokerage model," Hession notes. Traditional list companies "will be replaced with strategic demand creation firms that specialize in designing custom list strategies from the wide array of third party list rental sources."

Printers, data processing firms and lettershops as well as list firms are suffering—and there is no end in sight, adds Dunhill International's
Candy Dunhill Hachenburg, vice president of sales, and Cindy Dunhill, vice president of operations.

The Dunhills note they're finding smart marketers are using multi-channel advertising, incorporating things like e-mail, mobile marketing and cell phone promotions into the mix.

Since the number of lists has shrunk, mailers must slice-and-dice to find audiences that better match their market. Demographic and psychographic selections are being fine-tuned. This reduces the quantity and saves on postage and printing.

Savings of 5% to 50% are being negotiated on many lists, depending on the volume, say the Dunhills. However, know list cost represents only 15% of the entire direct mail package.

The financial companies (mortgage companies and credit card mailers) mailed many millions less in 2008. Their direct mail volume is off 39% and 22%, respectively. Their newspaper ads have decreased, but their e-mail use and cell phone advertising has dramatically increased.

Fred Morath is president of Fred Morath Direct Marketing, Natick, MA.