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The days of high-volume sales of cold mail data may be over, but demand for analytics to generate targeted data selections and quality email data is on the rise, writes Noelle McElhatton.
Sales of consumer data, like every other media, bar digital, are suffering in the downturn. But there's a difference: the sands beneath the data or list sector were shifting way ahead of last year's global financial meltdown.
Long before the term 'credit crunch' entered common parlance, volumes of direct mail, and therefore demand for postal addresses, were being scaled back.
The rise of digital communications, declining response to untargeted direct mail and the growth in opt-outs are the underlying reasons.
It has meant a much altered data landscape, as marketers reconsider the type and volume of data they require. Warmer, multi-channel data is now the name of the game for clients and suppliers alike.
'Clients are still spending money but they want more value,' says Irit Reed, director of list broker Caspian Partnership. 'It's affecting the traditional way we have collected data.'
Marketing Direct's 2009 survey of more than 40 list suppliers and middlemen is testimony to this evolution. The figures for last year's activity show declining demand for cold lists - that is, contact details for consumers who may have had no prior relationship with a brand - but an increased appetite for warmer transactional data and quality email lists.
If data volumes were being scaled back before the credit crunch, last year's banking crisis has hastened the decline. As financial services, once the engine propelling the data sector, went into marketing retreat, many of the players in the survey say their business has been affected.
'The days of the large financial-services purchasers are over because cold data is just not performing as it has in the past,' says Chris Mitchell, former head of data acquisition at News International and now insight development director at Huw Davis Partnership. 'You need additional information so that clients can know the value segments and who their valuable customers are.'
E-data pioneer Interactive Prospect Targeting cited the financial meltdown as one cause of its difficulties in 2008. After months of poor trading, the AIM-listed company was forced to sell its UK businesses last year and reports a decline in names traded in 2008.
Acxiom, one of the UK's biggest suppliers of cold data, may have had an increase in consumer names traded in 2008, up to 625m from 595m in 2007, but this picture is likely to change. In January the firm lost the multimillion-pound contract to provide Capital One's prospect pool of data, as the credit card giant axed direct mail for customer acquisition and moved it online.
Experian, another big supplier of cold data, reported stagnant growth in volumes traded during 2008. This trend is also seen in the league for list managers (see page 45), where nearly half of those surveyed reported a decrease in the data that passed through their hands.
Few believe the days of giant data tranches being bought by Capital One and its competitors will return. 'The list sector has to adapt to a world where volumes will be consistently lower,' says Rosemary Smith, managing director at list manager and broker RSA Direct.
So, while seven of the 11 key consumer data owners report an increase in the amount of data they sold last year, change is definitely in the air The market has moved on from providing cold data derived from the Electoral Roll and lifestyle surveys. 'Demand for commodity data has dropped off but marketers are still using the higher-profile data from lists such as the FT and The Economist - consumers that tend to be more upmarket,' says Smith.
Transactional data is in the ascendancy. Sellers of such data argue that consumers 'in play' for products and services are more responsive to unsolicited approaches.
One such supplier is The Trading Floor, the second-placed company in our list managers league (see page 45). It manages a pool of multi-channel data - that is email, telephone and mail details - derived from quotation applications to insurance and credit card companies.
The credit crunch has proved a boon to The Trading Floor, according to its head …