Last week, Laura, of Word to the Wise, called for a delivery blog carnival sparked by the following comment:
“…rented email addresses, if done properly, should be no different from renting physical mailing addresses. With over 25 years in direct mail catalog experience, we know that catalogers are sending fewer catalogs and moving from print media to other alternatives, most significantly email. I believe that in time, these catalogers will begin renting/trading their email lists just like they currently rent/trade their physical mailing addresses. Once they figure out how to do this legally and ethically, I hope that this type of prospecting will become feasible and an alternative to others like Google PPC.”
The team here at Bronto decided to respond with our feedback and thoughts on the comment:
Kristen’s thoughts:
Personally, I think we’re done with the age of non-permission email. We’ve got far too much “noise” going on in our daily lives (and email inboxes) and I don’t think that people will tolerate getting emails resulting from list trades/swaps.
While some companies that rent/swap emails could be mega-targeted and compelling, the bottom line is that businesses will always think more highly of their offerings than anyone else. (”What do you mean? Of COURSE people who buy gum want offers for teeth whitening!”)
Can a list swap be ethical? I believe that in the eye of the consumer the answer is no. Permission is ethical. Perhaps a one-time opt-in campaign could be tolerable, but do enough of those and folks will rail against your practices and smear your reputation. You’ve got to think long-term.
There are other ways to partner with like businesses and incorporate permission, such as offering a sign-up ad in your opt-in newsletter or linking to the partner site from yours (and having them do the same)…If the offer/message is the right fit for your audience, they should respond.
Email is not direct mail. And if I could simply press a little button to stop getting credit card offers in my mailbox I would.
Kelly’s thoughts:
Kristen has all good points in her comments. Marketers should always think about the end user’s perspective and perception especially around list building practices that don’t include an organic opt-in. I’m going to take the position of the marketers themselves. Is there data out there that supports that list trading in the catalog business works? Yes. Does that mean it will translate to email? No. Why?
To me, email is much more personal than direct mail. It’s much closer to a 1-to-1 communication than direct mail could hope to be. Subscribers can tell you much more about themselves beyond demographic data and you can send very relevant, low-cost communications to them via email.
Long ago, consumers accepted spam in their physical mailbox because the barriers to unsubscribe/complain are too high. That is most certainly not the case with email as we’ve seen with study after study on complaint and unsubscribe rates and how the definition of spam has changed over time. What, ultimately, then is the value of list sharing for marketers? I’m sure the response will be a larger audience for their marketing messages, but where is the tipping point between benefit and harming their business?
As a marketer, if I am sharing my subscribers’ email addresses with all of my major competitors (hopefully with the subscriber’s permission) and providing the ability for subscribers to easily compare prices and deals, will I then have to compete solely on price? Will we be cutting into each other on prices, discounts, promotions until no profit margin is left?
The real benefit of growing lists organically is that the subscribers really want to hear from that marketer. There are many tools at their disposal to grow their lists without sharing. Is it harder than just buying the email address? Absolutely. Is it likely to produce better ROI? I believe 100% yes.
Chris’ thoughts: 
In regards to deliverability, there’s nothing that can tank an email campaign faster than a rented list. While there are legitimate uses for rented lists, the brokers who manage them usually operate in a black box wherein you, as the sender, have little to no visibility into where the email addresses came from. And, by sending to rented lists, you assume all deliverability responsibility. You’ll only know if the email addresses are bad or cause complaints by sending - and by that point, it’s too late with the damage already done if there are issues with the list. And to add to this, major spam watchdogs (like Spamhaus) will publish spam trap email addresses that, if you send to, could cause some major pain. The theory is if the email address never actually was used in a valid opt-in, then all mail that is sent to the spam trap is inherently spam. By renting a list, you might be getting some spam trap addresses and you’d never know.
Bottom line is the risk of renting a list outweighs the potential benefit and leaves you no real way to vet the addresses before sending to them. So, don’t gamble and stick to organically growing your list as opposed to paying for someone else’s list.
What are your thoughts? Share them in the comments below!
Kelly Lorenz
Email Marketing Strategist
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The format I’ve seen this work best in is when the list owner explicity promotes the advertiser, for example if I’m on Bronto’s list and Bronto sends me an email in Bronto’s voice telling me about the benefits of Return Path, with an offer for a free inbox audit or something.
In my perspective, using that strategy successfully leverages permission in a way that adds value to your readers. Unfortunately, these types of advertising arrangements are much more time consuming and difficult.
A quick phonecall saying “What’s your CPM?” is way easier, and that’s the critical difference between direct mail and email. A failure in direct mail is very costly in both time and money. If you fail in email, the media cost is your only loss outside of possible delivery issues. You’re free to annoy consumers for as long as you have a budget, while in direct mail budgets run out much faster.
-Ryan
You guys are totally dead on. Email list swaps are DOA. Co-registrations are the closest we’ll ever get to list swaps and from all that I’ve heard those don’t work so well. Marketers who concern themselves with such aggressive list growth tactics are failing to recognize that email is at its heart a retention tool, not an acquisition tool. They’d do better focusing their acquisition efforts on search and other channels. Play to each channel’s strengths.
Thanks for your comments Ryan and Chad.
Ryan - I agree with you that this is the only viable route to go with list rental. What would also be vital to making this strategy a success would be for the list renter (in your example, Bronto) to set subscriber expectations by clearly stating that they engage in list rentals and the subscriber can expect to receive marketing messages from third parties from time to time. What could also help keep the list renter’s list from going stale, unsubscribing or complaining would be to provide the option to unsubscribe from third party messages. Often, when third party emails are sent, subscribers aren’t provided the option to unsubscribe just from that type of communication and are forced to unsubscribe from everything.
Chad - I agree with you on co-registrations. Today, because so many spammers used these as part of their scams (”Sign up for these offers to receive you $50 Wal-Mart gift card!”), consumers have to be wary of what they are truly signing up for. I also agree that the focus for marketers should be on retention, but it is very hard to convince the C-level executives that a bigger list doesn’t always equal more profit.
Thanks again!
Kelly@Bronto
Hope I’m not too disruptive here, but I disagree with a lot of what was said. It is the responsibility of every business owner to make the most profit from whatever assets it has. For a company that does most of its business over the internet, e.g. a content provider, email can be its distribution means, its marketing means, and a revenue source since rental can provide more than half of its income. To not do this, simply for altruistic reasons, is an actionable legal issue for stockholders (obviously, if too much use causes reputation damage or fatigue, that’s different).
There is nothing wrong with advertising as long as the CANSPAM conditions are met. I never asked to have commercials as I watch television, but I know they pay the freight, I think most people are equally accepting with email as long as the source is clear and the option to unsub is presented (i.e. not spam). And I disagree that this kind of use of an email list presents a unique ethical issues, if there is an issue here then the issue is everywhere.
Marketing literature from that past fifty years advises that advertising must be interruptive in nature in order to be effective. Email is effective exactly because it is a one-to-one communications medium and it more difficult to ignore than broadcast mediums.
Every advertiser knows that only a small fraction of the people he advertises to will be a customer. Perhaps every customer for chewing gum is not a customer for teeth whitening. But logically that list will have a higher percentage of interest and therefore a better, more profitable response rate. But you don’t know who those customer are unless you interrupt everyone on the list. Its just like I have to see television commercials for feminine hygiene commercials, even though I’m never going to be a customer because there are a lot of potential customers in the audience.
I understand that spam is rampant and very annoying to email users. But that’s not us. Renting a list from a reputable provider should not be a problem or a philosophical issue, any more than buying time on radio or space in a magazine. Of course you have to consider the source, the reputation and past reponse, but lets not paint all list rental sources with the spam brush, its just not true. Yes there is risk, but business is all about risk.
And you can’t generalize about effectiveness or profitabily on any of these methods. I can name a dozen companies that do just great renting lists. And someone must be doing well with co-regs, otherwise there wouldn’t be an industry. The point is you have try it, you have to study it, you have to objectively see it if it fits into your strategy. If you aren’t, then you aren’t doing your job and your company will suffer.
Chris, by the way, while in theory spam traps are supposed to work that way, they are frequently used to sabotage legitimate lists (motive was political in our case…).
My two cents.
tk
Tim,
First, let me be clear that we’re discussing a fundamental difference in emailing strategy. I respect your response to our blog post and am glad this has triggered debate! It would seem, in my industry experience, that this has been a subject that people fall on one side or the other without really knowing the deeper reasons behind why there are different factions around whether list rental is a good idea or not. Let’s hope this continues the discussion and we’d love to hear the thoughts of other readers of this blog.
I posit that your assertion of list rental being a good source of revenue is only a small piece of a much larger picture. List rental as part of an email marketing strategy can make sense in some cases but in the vast majority, it doesn’t. The long-term damage that renting a list from some entity and taking it on faith that those email addresses are valid and have recipients sitting behind it that are accepting of the mail you’ll send them outweighs the monetary gain. If you have a clear channel setup to receive email addresses directly and set expectations with recipients correctly, then list rental could severely damage the effort you’ve put into creating a robust direct marketing relationship. The interruptive nature of marketing is abstracted a bit with email because I can check it when I’d like. And if I don’t like what I get whenever I do check it, I let the sender (via unsubscribe) or ISP (via spam button) know. Are there certain situations where a list swap or rental could result in me getting an email that I don’t throw away? Of course. 99% of the time, though, I see marketing entities and rental providers enter the situation and abuse the recipient by too broadly targeting or flat out not showing the relevance – if the email address is even valid and makes it that far.
You mention TV and commercials. I can turn a TV off or change the channel if a station is marketing too much or incorrectly to me. With email, we can’t expect recipients to recycle through email addresses every time they start getting a deluge of unwanted and incorrectly marketed email. That’s why ISPs take complaints so seriously.
We both know CAN-SPAM compliancy shouldn’t be the end game of whether an email meets the litmus test of possibly providing conversion. If we’re only worried about conversion and revenue, all we have to do is look at spam’s reason for existence. However, as part of a long term marketing relationship, email should go beyond CAN-SPAM compliancy – and list rental seems orthogonal to that.
Everything from targeting, cross promoting (the gum chewer and teeth whitener), and reengagement/win-back programs can be done without renting lists. If you have a well defined and sophisticated marketing program, the recipients you’ve acquired should be sufficient. I don’t understand how you can achieve these things only by bringing 3rd party lists in-house. Again, the risk of irrelevance and user reaction is too high.
Note, in my blurb, I didn’t say all list rental companies are bad nor is every person who rents a list bad. I, too, know of several companies out there that have decent list rental services. But, I think it’s also about the reputations of the folks who run them - the ones who want repeat business and a loyal customer base provide good lists to the best of their ability. Sometimes, though, that isn’t enough since an email address can’t be measured until something has been sent. There are a lot more companies that will collect email addresses in any way possible, slap a marketing spin on them to say they match criteria X, Y and Z (whatever the marketer is looking for), collect a check and then hand the list off. Their culpability ends there (especially if you’re in a different country).
So, I ask the blog audience, what can list rental do that an organically grown, directly acquired email list cannot? It’s one thing to serve up your content to another party to send on your behalf (like some of the list managers out there), but to assume the liability of those lists by sending from your system is dangerous.
To that end, Bronto has determined that rented lists are unacceptable to use with our platform. This is a deliberate decision that has been made with a lot of thought and consideration for different marketers’ needs. But, in the end, we believe that sending email to rented lists will cause brand reputation, deliverability, and conversion issues over time with recipients. If and when the market decides to have more good players with good technology in it, we’ll reevaluate this stance and will support those services that do have good practices. This is not altruism. This is good old fashioned business engineering for us – we grow our business by keeping existing clients sending to recipients who don’t adversely react to the mail sent to them (thereby ultimately finding it useful enough to engage) and by attracting prospects who also follow this tenet. Bronto is successful because we have proven time and again that by not having clients engage in list rentals, our value proposition increases.
Finally, I don’t think testing is required to determine whether list rental can have a negative impact on a marketing program. The statistics are already there for our clientele and from the ISPs and from recipients and…well..you get the picture. Preponderance of abusing list rental, alongside recipients, is too high to allow for the edge cases where it might wildly be successful.
Thanks for your input and the challenge of articulating these thoughts out.
Chris@Bronto
Chris,
Yes, a bit of difference of opinion, but that’s the fun part.
You do make some generalizations that I disagree with. You talk about damage from renting lists. I don’t see it. If you are renting a list, and you’ve bothered to check to make sure they are reputable and not on the common blacklists, there is not much chance of blowback. After all, you are sending on their infrastructure, so if there is IP blockage its not on your system. If the list provider is exceeding complaint rates and doesn’t deliver, I get my money back. If some of your current members are on the rented list, either use a suppression list service, or live with it. Your customers understand that you have to advertise and if it comes through another list they have signed up for, where is the harm? There is perhaps some risk establishing a new relationship with a list provider, but if you know the issues this is minimized.
So what damage are we talking about? Long term damage to reputation? In what circles? Email addresses don’t talk to each other, mainstream media doesn’t cover email abuse except in the extreme and people forget very quickly.
As I watched about 3 billion emails go by, I could measure the effects of response versus fatigue, content, and a variety of other criteria. “Reputation” in the sense you are speaking of was not important to my readers. It was only important to the ISPs and in some cases my list rental customers.
Of course, people sometime called us “spammers” (and “fascists”, “rightwing nuts”, “enemies of the state”, “Reagan lovers” and a whole host of other names). You will always have people who complain, and if your marketing is aggressive you may lose customers because of it. Complaints are a part of every business, and good business people look at the numbers and see how it affects the bottom line. It may be acceptable to lose a customer, if the method brings in 10 others. Every business has to judge this for themselves. Yes, there is a bigger picture than just the short term, but you have to break a few eggs.
Chris, I take exception to the phrase “a deluge of unwanted and incorrectly marketed email”. Email marketing is not the same as spam. Email marketing is not the same as spam. Email marketing is not the same as spam.
People sign up to get our emails, we don’t scrape or harvest, its voluntary in and voluntary out. If it’s a content email and the content is worthwhile, people will accept the advertising that goes with it. If the content is not worthwhile, they can unsubscribe. Content emails require advertising, otherwise they can’t exist, everyone knows this. And I do appreciate that the ISPs take it seriously, but I appreciate more that most have implemented objective criteria that make for a level playing field (as opposed to blacklists who block based on content).
The reason email list rental should be considered for EVERY well defined and sophisticated marketing program is simple. You can reach millions of people in a couple of hours (and yes, interrupt them), who are mostly strangers to you. If you need to jumpstart a program this will do it. You cannot do this any other way. It may or may not be cost effective, but that’s a different decision and you will not know until you test it.
By the way are we talking about different things? When you rent a 3rd party list, my experience is you don’t bring it “in-house”, they send on your behalf. Where I come from my list was a multi-million dollar asset, I would never release it to a third party. Some folks buy lists and bring them in-house, but I’ve found it to be bad investment (again because I TRIED it, the result was response sucked and I ended up throwing them away).
What can list rental do that organically grown email list cannot? Improve your sales immediately and dramatically. In our case, all of our emails were acquired through banner ads and online methods (i.e. organically). In two years we were able to increase our numbers by a factor of eight, and drop cost/acquisition by 70%. But this was a lot of hard work by a team of smart folks and expensive testing, it doesn’t happen overnight and techniques are radically different for different business models. If you need to generate sales, right now, email lists will do it. If it’s cost effective, then you should keep doing it.
I can see three classes of organizations that may not wish to consider list rental. First, if you have an organic program that acquires customers more cheaply than list rentals and you have explored and tested this, don’t do it. Second, if you are generating sales offline and only need to take care of existing customers, don’t do it. If you are a club of some kind not interested in growing quickly or making money, don’t do it.
On the other hand, anyone who is generating substantial revenue online, any one who is acquiring customers online by any other means should test list rental. It’s not cost effective for everyone, but if you haven’t at least explored it, then you as a marketer are not doing your job.
I fundamentally disagree with your last paragraph. Testing is required for everything. Optimizing and improving are continuous processes, conditions and profit margins change frequently, testing is a part of life. The alternative is long term mediocrity or failure.
Do, however, study the statistics, you may get some good insight as to how to improve your business model, but don’t let the statistics limit you. If I had adhered to “best practices” supported by “industry statistics” it would have bankrupted the company (verifiable truth).
tk
Tim –
A few comments in response to your posts in the spirit of a general discussion about list swaps and rentals and not your business in particular:
1. You say “Email marketing is not spam.” We don’t decide what is spam. The end user does and the end user is telling us through various surveys and studies that spam is anything they did not ask to receive or that isn’t relevant (sometimes even if they have asked to receive mail from that sender!). The bottom line is that email marketing absolutely can be spam in the consumer’s eyes – and those are the only ones that count.
2. I personally don’t think people have a tolerance for email they didn’t ask to receive – and if there ever was tolerance, I believe it’s waning.
3. You argue that you’ve got to send out send out a shotgun spray of email in order to figure out who’s interested in your products. This is the exact opposite of what the top marketers and experts out there say. It’s about getting targeted and relevant and sending compelling emails to people who care – and better results should be reflected. Amazon’s targeted messaging strategy and their position as a market leader illustrates this point.
So I ask: If you must email the full list, why not do an opt-in campaign? I think this is a better way to do list rental. Politely asking folks to sign up if interested (with an incentive for signing up) could get the right folks on board and be less offensive to those that don’t want your mail.
4. You argue that if any IPs are harmed through rentals, it wouldn’t be your own, so who cares? What happens when reputation is based on domain rather than IP? http://directmag.com/magilla/0728-domain-based-reputation/
5. Lastly, there are lots of “hidden” costs when you are not the most respectful email marketer you can be. How do you quantify the potential loss that stems from contacts who would have purchased had they been treated better? Or those who purchased from you and then realized you shared their address for a profit and decided not to purchase from you again? Or those contacts who mention your practices in passing at the office and leave an impression on others?
Mark Brownlow has an interesting read you that addresses some of these issues: http://www.email-marketing-reports.com/iland/2009/04/email-marketing-worst-that-can-happen.html
Overall, Tim, I appreciate your thoughts, I think there are some decent ways to do list rental (as mentioned above), I’m a no-go (as are Bronto and most other ESPs) on any kind of list swap and feel that the best way to email marketing success is through targeted, relevant, timely, respectful communication.
Kristen,
Thanks for re-joining the fray. Since you were kind enough to number your responses I’ll respond by the numbers.
1. No the end user does not decide what is spam. The end user decides they like something or they don’t. They may call it spam because they heard the term from folks like us and don’t know the difference but spam has a definition and legitimate email marketers are not spammers. Its fine to have studies and surveys ask people what they like or don’t like, but asking them what is spam without defining it is like asking them if fission or fusion is a better power source. Abe Lincoln once said, “How many legs does a dog have if you call his tail a leg” “Five” his audience shouted. “No” Abe said, “A dog has four legs, calling a tail a leg does not make it one”. Fortunately the biggest ISPs have decided that the definition is irrelevant and they go by complaint rates, a real business concern of theirs. This is fair. Blacklists that block based on content are inherently unfair.
2. First, with any legitimate list renter the recipient has provided permission, and that permission can be withdrawn at any time. Again, email marketers are not spammers. In the context of legitimate email, the stats I’ve managed tell me people have a high tolerance for advertising as long as the normal content (news in this case) is good.
3. Kristen, its great to target and segment when you have the luxury of doing it. If you are Amazon and have tens of millions to build your platform and hundreds of millions for advertising, and a product range of 10 million items, then you can target very specifically. In the real world, however, you are stuck with the venues available. (Frankly, its much more irritating for a marketing to ask me personal questions than to delete an email I don’t care about.) Advertisers know that a 1% sales rate in almost any venue is a fantastic response. That means 99% of the recipients weren’t interested (at least for now) and by your own reckoning, have the right to be pissed off. I think you are projecting…
Opt-in campaigns are great and we were enormously successful with them, but they take time and effort, and for some business models it’s neither appropriate nor profitable. But if you need short term sales, Email lists have immediate impact and bring immediate results. For example many of our customers were non-profits who were perhaps taking advantage of a short term national campaign. Their organic list might be only a few thousand, but by renting our list they reached another 2 million, bringing in huge additional donations. Bottom line, this works.
4. We were 100% on top of the methods related in that article, and Sender Score was my first read in the morning. We did occasionally turn away customers who were listed on the domain based blocking systems so as not to be tainted (later we fixed them…). But it’s our job as a legitimate sender to keep our list delivering, and we managed to do this at 98% while renting our list many times per week.
5. When we ’shared’ our list, i.e. rented it (no one ever got to actually see the list), we proudly placed our name in the from line and provided an introduction to our client. The recipient doesn’t have to realize anything, its already clear and that’s what a legitimate sender does. Hidden costs? There are no hidden costs. I knew exactly how many people dropped off, abandoned, or otherwise left, and found the additional revenues to outweigh this by a factor of about 10. If you are the one who is renting, you will delight a percentage and you will piss off a percentage, that’s life. If you suppress your current organic list, there is no possible loss of existing customers and no other possible downside (unless it costs too much…).
With due respect to Mr. Brownlow, his article really does apply to beginners and is actually a bit trite for us more experienced folks who have the proper experience and tools.
Again your are wrong in your generalizations about ESPs. 99% of ESPs would salivate at an operation as big as the one I ran with the delivery record it had. And honestly, would Bronto turn down a million bucks a year for a client with no problems and whose only fault was renting his list occasionally? I think you are doing your customers a disservice by not putting an industry accepted practice into their arsenal. But then again, Bronto is free to follow its own business concepts and hopefully it will pay off for you.
The fun never ends. And Kristie, if we ever meet in person I’ll happily buy you a beer (if you don’t beat the snot out of me first…)
Cheers,
Tim
I’m a lover, not a fighter, Tim, so no worries about any fist-fights. :)
I think at this point, we’ll have to agree to disagree, but I’ll certainly take you up on the beer and we can continue our lively debate at the next email marketing event.
Tim,
It indeed sounds like you’re very experienced and have been able to deftly avoid trouble with list rentals and other such tactics. Unfortunately, you’re in the small minority. Most marketers eventually find themselves in deep trouble using these tactics and end up losing tons of money for their programs. The Bronto team is giving good advice for the vast majority of email marketers out there.
Chad,
I was content to let this rest, because Kristen and I are having a beer to duke it out, but you have fired me up again with another unsubstantiated generality. “Most marketers”? “losing tons of money?”. Do you have data regarding “most marketers” and how much constitutes “tons of money”? As G. Gordon Liddy always said ‘anything gratuitously said, can be gratuitously denied.’
Let me say the opposite. Most marketers that I have met who have the savvy to be completely engaged in their profession, and who have chosen to use email list rentals to support their efforts make tons of money. I can named dozens. Everyone with an aggressive bone gets into trouble pushing the envelope eventually, but those losses are trivial compared to the total picture. In fact Sender Score sent our IPs into oblivion more than once, but overall our revenue improved 150% over two years due to email marketing.
If your clients are among those who have gotten into trouble, perhaps they need better advice (sorry I know that’s out of line, I’m sure you take good care of your customers). In reality, we shouldn’t be avoiding email list rental issues, we should be correcting them. I still say the major ISPs have it right, complaint rates and fbl’s are the key. The trouble you speak of stems from blacklists and blocking services with random, bad or unethical methodology. They don’t discriminate between legitimate marketers and spammers, so we get caught in ther net. Truly objective criteria would take the “trouble” out of it and provide whitelisting for all legitimate folks.
But telling people to avoid list rentail for those reasons is like your mother telling you you can’t play softball because “you might get hurt”. Oh well, guess I won’t be working at Bronto any time soon… (sigh)
tk
Here’s an interesting article about the topic from EmailInsider illuminating the difference between purchasing and renting lists (and pros/cons around them).
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=112369
Chris@Bronto