May 08, 2002
How To

Top 10 Email List Rental Tips (Watch Out for Hidden Charges!)

SUMMARY: No summary available.
"How do I rent the right email list?" is one of the top questions
MarketingSherpa readers ask. It is a smart question, because
nothing but nothing impacts the success of your marketing
campaign more than list selection.

Clint Kaiser and Melissa Edison Barnes, Co-Founders of Blue Ink
Solutions, have helped clients from the Arthritis Foundation to
the World Wrestling Federation rent just the right email lists
for their campaigns. MarketingSherpa recently interviewed them for a
solid hour to dig out lots of insider tips for you:

Tip #1: Investigate every list's roots

It is a supply and demand issue. Renters are so eager for lists
these days that lots of suppliers have sprung up to fill demand,
and let us just say they are not all choirboys.

This means you have to investigate each and every list's roots
for two reasons; the first being "Is it really an opt-in?"

Every list vendor knows you are looking for "permission-based opt-
ins," so that's what they will tell you their list is, whether
they are sure it is or not. Kaiser and Barnes recommend you "go
and see how names are collected at the Web site."

The second reason to investigate roots is that many lists are
brokered under different names by different vendors. Kaiser
says, "If the broker calls this list some sort of ambiguous
moniker such as 'house masterfile,' we have to drill down and
find out what that means, to make sure we are not renting the same
list multiple times through different brokers.

"That's always a concern with the intricate network of lists out
there. You have to really pay attention to make sure you're not
renting the same list multiple times for the same campaign."

Tip #2 Watch out for "hidden charges"

No, the CPM price listed on the datacard does not determine your
list price tag alone. Brokers are tacking on all sorts of
minimums and extra charges that complicate the issue; and in
the end a list you thought was fairly cheap may end up having an
unforeseen CPM.

Many of these extra charges are perfectly legitimate, but some
are rip offs. Ask your list broker or agency for advice. Here
are some items that can contribute extra charges beyond the CPM:

- Basic distribution
- Response tracking charges (Barnes notes that although these
are legitimate, some "extras" may be negotiable, such as special
fees for tracking more than three response URLs for click
- HTML versus text message sending
- Set-up fees for HTML messages
- A/B tests, subject lines tests and other tests
- Suppression of previously rented names, or your house "do not
mail" file
- Other "merge/purge" costs for removing duplicates between this
list and others you're mailing
- Various demographic or other targeting selection fees,
generally a certain CPM for each and every selection
- Are you charged for bounced or bad addresses or not?
- Minimums such as 5,000 names or $1000 dollars that you have to
pay even if your selection is so targeted that you can only use a
smaller amount of the list.

In the end, unless you compare all the little surcharges each
list owner nicks you with, you cannot make an apples-to-apples
cost comparison between lists. This is gonna be harder to
nail down than you think.

However, once you do, do not make what Barnes and Kaiser says is
the most typical marketing mistake when buying email lists,
selecting on the basis of price. Kaiser says, "When we present
the full array of options, clients often automatically migrate to
the least expensive ones, assuming the cheapest are the best."

Hard as it is to believe sometimes, the upfront cost of a list
may have very little to do with back-end profitability. A costly
list may do so much better in sales for you, that it ends up
being the cheapest one per converted sale. All that matters in
the end is your conversion rate.

When your agency tries to push you toward a more expensive
list because they know it is performed well in the past for
others, listen to them. That pricier list may not be a rip-off.

Tip #3: CPA and CPC deals do not mean you save if a list bombs

There has been so much hype about CPA (cost per acquisition) and
CPC (cost per click) list rental deals over the past year that
some marketers thinking booking list deals on this basis is the
easy road to riches without any risk. Think again.

First of all, in B-to-B especially, high quality targeted lists are
still rare enough and in enough demand that owners are not
stooping to assuming the risk inherent in a CPA or CPC deal
(where the owner pays for the list use and mailing and the
advertiser pays based on back-end results).

Even in B2C marketing, most legitimate list owners are savvy
enough to demand a minimum payout that you will be obligated to
give them even if your campaign results stink. (In fact if they
do not demand this, it is a signal to check the roots of the list
to make sure it is indeed a legitimate opt-in one.)

Kaiser says, "Most of the legitimate vendors have a certain
requirement, a minimum dollar pay-out due them. They will also
say, 'What is your budget? What is your guarantee to us that
this will generate income?' Some won't take it unless there's a
guaranteed $10k pay-off. Others will take a really close look
at your offer and what your creative looks like."

Barnes adds, "The list owner is in total control. They're going
to make money one way or another, whether the buyer is CPC or

Tip #4: Results tracking varies substantially between brokers

Great so you have selected your lists and got your campaign out,
now you want to compare the results of each list. Unfortunately,
Kaiser and Barnes warn that performance comparisons can be very
difficult because various vendors track responses in completely
different ways.

Barnes says, "It's imperative to understand what raw data means
from each list, how it compares against others, and how each list
manages tracking and offers that raw data back."

For example:

- Unique versus aggregate click tracking. Kaiser explains, "If
the recipient clicks on a link 10 times, does that register as
ten clicks or does that recognize that individual as the same
person who's clicked the other nine times?"

- What does the tracking system consider an "open event"? If a
recipient's Outlook preview box opens the email automatically
without their proactive click to open, does than count as an

- Can you track response rates of AOL, Yahoo, and Hotmail
separately? Each of these may have very different response rates
from "regular" email addresses because of their bulk mail folder
systems, their ability to receive rich media creative (or not),
and the predilection of people to set up "spare" mailboxes in
each that they may rarely check for mail.

Tip #5: Do not be swept off your feet by list sales reps

List sales reps are usually commissioned employees who are
sometimes eager to sell you as many names as possible, instead of
the best names for your particular campaign.

This problem is exacerbated by the fact sales have been booming
so much that some brokers have focused on putting warm bodies in
front of ringing phones to grab the order, instead of investing
in sales rep training or making long term client relations a
priority. However, there are some great brokers out there, and
many of the rest will get better with time.

In the meantime, do not be swayed by smooth assurances. Ask lots
of questions. If your rep can not give you a straight answer, ask
to speak to a supervisor. Keep moving up the food chain until
you get a straight, detailed answer, or switch brokers.

Barnes says, "Clients who don't know all the right questions to
ask can get targeted. They are at the mercy of the broker."

Useful questions to ask:

- Does the owner track list fatigue? Is there a cap on the
number of times a particular list or name can be rented each
week? Can you find out how much a typical name has been rented?

- Can they suppress previously rented names, so if you run a test
those names will not be included in the roll-out?

- Can you select a "hot file" of just the new names that have
been added to the list in the last 30-60 days? (Kaiser says he has
seen these names perform 15-20% better on occasion.)

- Who has rented this list in the past? More importantly, who
has returned to rent it repeatedly, indicating it is a winner for

- Can the broker show you precisely where and how the name was
collected? Was it a co-registration? Was it a pre-checked box
on an order form? Was it a sweepstakes or other free offer that
incentivized people to hand over email addresses for reasons
unrelated to getting emailed information?

- What "from" line will the list owner require you use, or
alternatively allow you to use?

- If the list owner has multiple lists, can the creative and/or
opt-out line indicate which precise list the name came from, or
will it simply refer to the owner's name?

(Referring to the precise named list can raise your response
rates if it is a brand name that recipients know and trust. It
can also lower spam accusations from recipients who may recognize
the list name, but not the owner's. Sometimes you have to pay
extra for this.)

- Do you ever mail extra names, at no cost, in order to bump up
client's total responses?

(This is a trick used by a few unscrupulous brokers to give new
clients unusually impressive test results in order to convince
them to spend big money on a rollout. If your test results are
unbelievably impressive, they may be just that: Unbelievable.)

Barnes notes, "No matter how often we work with list vendors, it
is the most time consuming thing we do."

NEXT WEEK: We'll reveal "The Myth of the Sniffer." If you are
reading a pass-along copy of this newsletter, make sure you get
this fascinating article by subscribing today at:

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