TMA Brokerage 101

Why would I want to use a broker rather than going directly to the list owner(s)?

Using a list broker to help with list research, selection, and procurement will save you both time and money. Time savings stem from the fact that brokers live in the list world all day, every day. With over 50,000 lists available on the list rental market, it is extremely difficult to keep track of new files, new selects, problem lists, etc., while still doing your real job. Partnering with a list broker can alleviate days, or even weeks, of research on the front end and save you from disastrous results on the backend.

A good list broker will also save you money by identifying opportunities where price negotiation is possible. Not only can you use leverage inherent to the size of your order, but you can tap into the aggregate business that the broker conducts on behalf of ALL of his/her clients. Additionally, you pay nothing for the list broker’s services. Brokers are paid on a commission basis by the list owner you pay the same price for the list, whether you go direct to the list owner or through a broker.
When I get a list, do I own the records?

This is a common misperception to people who are new to the direct marketing list world. The standard method to utilize a list is via a list rental allowing one-time use of that list. Subsequent re-uses are permissible, but must be reported and paid for according to discounted re-use rates (typically, no select charges and sometimes a small discount off the base rate cpm). Data licenses or unlimited use arrangements are possible, but must be negotiated and contractually agreed upon by all interested parties.

Records become owned as the property of the direct marketer (i.e. mailer) once they respond to your offer via the response mechanism contained in the direct marketing piece (e.g. call-in to an 800 #, registration on a web-site, purchase of a product, completion of a survey, etc.).
What is the difference between a ‘compiled’ list and a ‘response’ list?

Compiled Lists – These are lists of people or businesses compiled from published, public sources, such as industry directories and the Yellow Pages. Compiled lists frequently provide the best means of reaching large groups of specific audiences. For example, you can rent compiled lists of all doctors in Chicago or all radiologists in the United States. With regard to response rates, compiled lists generally do not pull as well as response lists. The trade-off is that the price point often is much lower than response lists resulting in a comparable ROI. There is also greater flexibility for negotiation of pricing and or nets when using this type of list.

Response Lists - These are lists of proven direct mail buyers/responders/subscribers/etc. As opposed to compiled lists, response files are typically of higher quality due to the behavioral aspects inherent to the list construction. That is, names qualify for these lists by virtue of some activity (i.e. ‘response’) taken where you can infer interest in a certain category. Examples include subscribers to magazines, buyers of certain products, shoppers from certain stores/companies, attendees to seminars, etc. These types of files tend to experience better response rates than their compiled counterparts, but are appropriately more expensive. Price negotiation is much more difficult for these types of lists, unless very large quantities are rented.
What is a ‘net-name’ arrangement?

Net-Name arrangements are negotiated by your broker to minimize the amount of duplication for which you are responsible to pay full list rental fees. When renting lists in large quantities, you will undoubtedly experience duplicate records between lists as well as with the house file your client owns, resulting in less unique records to mail/call/e-mail. Your broker can negotiate net name payment arrangements that set a floor (equivalent to the negotiated percentage) for which you must pay full charges. You pay full charges for either the negotiated percentage of the names, or what you mail; whichever is higher. For those records where full charges do not apply, “run charges” are assessed on such unused names (typically in the $5/M - $10/M range). Selections charges must always be paid on the total amount of names you order/receive.
What are the hygiene services I should use during the merge-purge process?

At a minimum, the service bureau you select to handle the actual processing of the lists will need to merge-purge all of the lists you are utilizing for the mailing. The ‘merge/purge’ is the process undertaken to combine all of the lists into one final ‘mail file’ where all duplicate records are removed so no duplicate records are mailed. Additionally, most will offer the following hygiene services, many of which are recommended due to the low cost and potentially large impact they play on the success of your direct marketing campaign:

NCOA (USPS National Change of Address)
Over 20% of American households move every year, leaving a high probability that your lists will become less effective due to outdated address information. The NCOA data hygiene process updates this change of address information in order to keep your lists producing more effective results.

CASS Certification (USPS Coding Accuracy Scoring System)
Aside from the names within your list that may have moved in the last year it is estimated that nearly one-third of the records within a list contain either incorrect formatting of an address or missing information crucial to proper delivery of any mail piece. By processing your file against the standards required by the USPS CASS Certification program you can correct or add this critical information to all records (normally included as part of the NCOA processing).

Suppression Services
By eliminating those households that have registered with the DMA Mail Preference Service, asking to be removed from direct mail campaigns, you can focus your target on those customers that are more likely to respond to your offer.