Tutorial: Renting Email Lists - Costs, Deliverability & Targeting - Part I

Several attendees at last month’s MarketingSherpa Email Summit raised basic questions about list rentals. With paid search prices so high and email prices relatively steady, many marketers are taking another look at email list rental. So, we figured was time to research email marketing 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=23318
http://www.marketingsherpa.com/sample.cfm?contentID=2042
http://www.marketingsherpa.com/article.php?ident=29333

Past Sherpa co-reg reports:
https://www.marketingsherpa.com/article.html?ident=22810
https://www.marketingsherpa.com/article.html?ident=22816
https://www.marketingsherpa.com/article.html?ident=22832

IDG List Services
http://idglist.com/

Response Media:
http://responsemedia.com
Walter Karl:
http://www.walterkarl.com

Conde Nast:
http://www.condenast.com

Rand McNally:
http://www.randmcnally.com