Are Today’s E-Mail Lists Overpriced?
Published: February 25, 2008 – Lists and Data Strategies For The Multichannel Merchant
In today’s marketplace, it is surprising that list owners and managers believe that e-mail list rentals should command a high premium over traditional direct mail lists.
The contemporary pricing model for e-mail lists can be traced back to companies such as Net Creations, who helped to commercialize “double opt-in” e-mail lists in the 1990’s. After the so-called “dot.com collapse,” pricing for generic e-mail lists followed suit. However, “branded” B2B e-mail lists retained their value, whereas so-called private labeled “single opt-in” B2C e-mail lists became a commodity, and were priced for pennies on the dollar, as they remain today.
Some readers may not be aware that e-mail lists are often priced at a multiple of their direct mail cousins, particularly B2B e-mail lists. Those rates may have been justified in the 1990’s when prospecting via e-mail was more effective than postal mail. Of course, fax blasts were also popular at the time, and for the same reason.
It is well known that contemporary marketers are reallocating their budgets in favor of online media, particularly e-mail. If you do the math using today’s numbers and metrics, direct mail for B2B can actually be less expensive than e-mail. Are you surprised? Regretfully, some folks are not aware that direct mail still works and is profitable. In fact, response rates for both channels can be optimized using direct mail and e-mail synergistically. Unfortunately, some advertisers mistakenly favor e-mail campaigns over postal, based upon contemporary folklore and assumptions that were valid 10 years ago, but may not be realistic today. Experienced mailers who utilize both e-mail and postal lists know that today’s response rates for prospect e-mail are much lower, yet e-mail list prices have not followed suit. If they don’t go down, using e-mail for prospecting may become obsolete.
Given today’s sagging response rates for e-mail and direct mail, it is time for list owners and managers to take notice and reduce what they are charging for e-mail lists; otherwise they may drive their customers to other proven media such as package inserts and blow-in programs.
One thing is for sure: e-mail is not getting through to recipients as it did a decade ago. Think about it: today we have leaky SPAM filters, black lists, white lists, authentication protocols, and other barriers to your HTML or text message reaching prospects. E-mail is a great tool for maintaining relationships with your customers. Prospect e-mail lists do not work as well, and should be priced accordingly.
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