Professional list brokers are experts. They know the list market and the data owners and managers. They know which lists are best for particular campaigns, which can be trusted and which are performing well. They save the client money when they consolidate data purchase and can often pull a data supply together more speedily given their resources, expertise and supplier network.
Cheri Mayell Davies, list broker at Lloyd James Group, says, I was asked to check a proposal for a client, which they had received from a large agency. The agency had recommended exactly the same list three times without realising that it had been given a different name by the different list managers reselling it. Brokers can provide customer profiles and a comprehensive view of the market based on their client’s requirements. Data owners also find brokers useful and not just as a shop window for their lists.
Nigel Dickenson, alliances leader at D&B, explains, Brokers help us to understand what customers need and how we’re doing vis-à-vis competitors, so we can constantly improve our offer. A broker’s professional reputation rests on the impartial advice they give to their clients. On top of this, unlike most experts, the broker’s professional services are often free.
Brokers are paid commission by the list owners whose lists they recommend, so traditionally their services don’t cost their customers a penny. Brokers negotiate a discount of 20-30 per cent on the list price and sell it on to their customers either at full price or at a smaller discount. Because the brokers’ revenue comes from list owners/ managers rather than from their own clients, some marketers argue that advice from brokers cannot be impartial and that they will merely recommend the most lucrative lists.
Simon Lawrence, joint MD of data consultancy Information Arts, comments, Brokers make their money from selling lists and yet should ensure that clients use only the most appropriate data to succeed in what they want to achieve. This creates a tension between what brokers should do and what they can do.
In the B2B market there has certainly been a lot of pressure on pricing. Competition between list owners has squeezed margins and better targeting by brokers has squeezed fees. Consequently, more brokers are beginning to charge a retainer or planning fee, similar to an agency billing system, particularly if they are offering services in addition to list buying.
Value-added services
Most companies have a superficial knowledge of the data marketplace and rely on certain brand names, such as D&B and Experian, etc. Whilst such knowledge need not be wrong, it usually means that companies are not as selective as they could be and therefore buy a lot more data than they need.
Many organisations are looking at pan-European and international DM campaigns, says John Noble, director of Pro-Active, which adds to the complexity of list requirements. Brokers are particularly helpful when it comes to sourcing overseas contacts as in addition to knowing which data is less reliable they can also advise on address formats and local conventions for non-UK countries.
Most brokers handle both business and consumer campaigns to ensure that new ideas and methodologies are used as widely as possible; many large campaigns also blend business and consumer-based data. Brokers should also understand which media their client’s audience trusts. Chris Bagnall, client services director of DWA Media, explains, Embedding an advert into an email that a contact is expecting and welcomes, has far more impact than embedding it into one sent from an unknown address, which may not even be opened.
Ben Ennis, director of ListLab, adds, It’s often better to select a broker and then stick with them so that they get to understand your product and company. They can then assist with strategic planning and analysis and can suggest ways of getting data to work better for a better price.
As data records have become more complete and identifiable, so accurate targets have become easier to select. Some companies particularly those that have bought the same data regularly have difficulty accepting that good data planners can reduce mailing volumes by as much as two thirds and still achieve the same outcome.
As Richard O’Hara, business development director of Eagle Direct Marketing, points out, List brokers can assist with constructing a test matrix from which valuable lessons can be learnt for subsequent campaigns. They can also assess the success, or otherwise, of a campaign to develop a data strategy for the future.
Changing roles, changing market
The roles of brokers are changing as more people realise that they have tremendous experience of data that can be exploited beyond its mere purchase. Increasingly, brokers are evolving into data planners and have greater input into issues such as maintaining and cleansing clients’ databases, profiling and segmenting customer/client data and planning and advising on data strategies. Typically, brokers work with a number of agencies on behalf of many different clients and this mix-and-match approach offers more flexibility and better service for clients. Lawrence of Information Arts, predicts, Clients are also beginning to accept the value of analysis and I think the market will change over the next five years so that most clients expect much greater targeting.
However, using the services of a list broker is not the only way to target campaigns accurately. Companies may prefer to participate in a data co-operative whereby firms contribute data to a data pool and can then use the resulting database in their DM. Roger Williams, international marketing director of Abacus, explains, For example, by identifying the recent purchasing habits of a company’s lapsed customers across other businesses, it’s possible to discover those lapsed customers who are still purchasing similar products from other companies.
Going it alone
As with almost any information, the Internet has made sourcing lists much easier for companies who don’t want to employ a list broker. There are a number of paper directories and the DMA’s List Manager site (www.dma.org.uk/content/dlm-introduction.asp) is also helpful. Companies can negotiate directly with a list owner if they are sure that one source is going to fulfil all their requirements. However, most marketing campaigns are better served by using a combination of data from various sources. A member of staff allocated to organise data from different owners/managers when required would probably not be as effective as an independent list broker in purchasing the most appropriate data. Ad hoc data buyers would not have the constant exposure to lists and their provenance judge which is best for particular purposes and campaigns. Without expert help they may also not be sure that they had looked at all the available options. As Ennis of ListLab, says, Many marketers don’t have the time, resources or knowledge to benefit fully from the list market.
Once the required lists are identified, the inhouse broker also has to brief and liaise with multiple suppliers. Bagnall of DWA Media, warns, Because we know 90 per cent of the data sources in the B2B market, we can advise clients which data sets are valuable and which are inaccurate. We see a lot of sharp practice where, unless they’re careful, end-user customers can be misled about the accuracy of the information they’re being offered.
There are very few benchmarks for data quality within the list industry and it can be poor, particularly in B2B lists. As O’Hara of Eagle Direct, says, The DMA’s Business List Audit is helpful, but hasn’t been widely taken up by list owners and doesn’t necessarily go far enough to guarantee quality. It would be an extremely positive development to see a proper audit scheme for all lists being developed.
Just as cowboy builders have brought the building trade into disrepute, so rogue list brokers have caused some damage to the reputation of these experienced and competent professionals. Nevertheless, good data planners not only ensure that companies obtain the right information for their campaign requirements, but also assist in making that campaign a success. As Davies of Lloyd James Group, says, Brokers deal with targeting, supply and data selection every day. They know how best to extract information from a vast portfolio of lists and databases and how successfully to negotiate the rental of such data to ensure that it is supplied on brief, on target and on time.
