Compiled Email Lists - Still a Marketing Gamble
Tuesday, May 5, 2009 at 12:15AM 
In the game by WafflerBy Larry Kilbourne
Back in February I wrote a blog on 10 tips for selecting an email list vendor for research or database marketing. Tip #3 was "Avoid compiled lists." A BtoB Issue Alert yesterday reports some surprising good findings about compiled lists, but in the end its message reinforces my concerns over them.
As I noted in my earlier blog, the chief problem with compiled lists, which come from many sources, is that you, as the list renter, simply don't know from where the information has been culled and how up-to-date it is. The latter was my chief reason for discouraging their use. Out-of-date information is useless, and considering that you may be paying up to $.30 per name, it is an expensive form of useless.
In yesterday's BtoB article, "Study discovers data discrepancies," reporter Christopher Hosford presents the good news - and the bad - based on a recent study, "Online Sources of B-to-B Data: A Comparative Analysis.” (The full report may be downloaded here.) The study looks at the performance of 10 list compilers in creating compiled lists for 10 industries, as well as the number of contact names generated for each industry category.
First the good news. The contact information of those appearing in the lists - name, address, title, phone, fax and e-mail - appears to be accurate, based on a control group of business names where the researchers already possessed the complete contact information.
So on that count, my reservations about the accuracy of compiled lists seems unwarranted. Mea culpa.
Does this mean that compiled lists are as good as response lists (which are typically based on subscription to a particular publication)? Here is where the bad news emerges.
The study found a wide variation in both the number of companies identified by the different compilers in each of the 10 industry categories studied, and beyond that, wide discrepancies in the number of contact names within each company. According to study co-author Ruth P. Stevens, "People go to compiled lists because they expect to get much higher coverage than response lists and to have pretty much everybody in an industry niche. This study suggests that they don’t get that."
So, the good news is that compiled email lists are much more accurate than I, and many others, thought. The bad news, however, is that their perceived strength - greater coverage of any given industry - simply isn't true. What that means is that any researcher considering using a compiled list had better be prepared to look at a number of list compilers and compare their numbers. As the authors conclude:
"...business marketers should exercise caution when ordering data from compilers. Marketers are advised to develop a detailed ordering methodology, to increase the likelihood that the data they receive is what they were seeking."
Since the most attractive feature of compiled lists is their lower cost compared to response lists, it seems to me that the additional work required to be certain you are selecting the best possible compiled list probably offsets any savings in rental cost.
For my part I'm sticking with the advice I suggested in February: avoid compiled lists whenever you can.
Copyright © 2009 by Larry Kilbourne, Ph.D. Dr. Kilbourne is an independent marketing consultant. He may be reached at lkphd@yahoo.com.
Reader Comments (3)
Glad you found our white paper of interest, Larry. I agree that it's disappointing that so many of the data suppliers are missing some attracftive prospects. But I wouldn't conclude that our research means marketers should avoid compiled files. In niche markets, for which response files are not available, we have no choice. Bernice and I conclude from our research that marketers should experiment with a number of suppliers, to find the ones that best cover their target markets.
While I am at it, can I suggest you and your readers might be interested in some of the other white papers Bernice and I have produced over the last couple of years. They are downloadable from www.ruthstevens.com or from www.dmrsgroup.com. We have a bunch of material on data hygiene, how to write an RFI for database outsourcing, a ranking of database marketing applications in B-to-B, and how to append 3rd-party data to your database. Guaranteed to put anyone but a real data dweeb to sleep!
Ruth - Thanks for the comment - and the additional resources you've identified for interested readers. I agree that the moral of your study isn't don't use compiled lists, but do so with care and when no other options are available. I still sleep best when I'm working with response lists!
Due to recession, many people are no longer with a company.
Thus the more inaccurate the lists become. http://bit.ly/11JbtY