Finding a Reputable E-mail List Provider

“I continue to have a problem finding a reputable e-mail list provider. I read the ETR article on how Patrick Coffey built a 100,000+ e-mail list, and was wondering how he ascertained which list providers to seek out for his marketing campaign.”

– Tony C.

Dear Tony,

List brokers are people who recommend and rent out other people’s e-mail lists for a commission – and there are lots of them. To find reputable brokers who provide good service, I suggest going to the Direct Marketing Association (DMA) vendor search website (thedirectmarketingsearch.com). This site allows you to search for DMA-recommended brokers.

Lists are typically rented on a CPM (cost per thousand) basis. If, for example, the price quoted by the broker for XYZ list is $50 CPM, it would cost you $250 to rent 5,000 names on that list through the broker. But chances are she’s marking up that CPM by 10 percent to cover her commission. Which is why it’s sometimes better to go directly to the source – the list owner. That way, you can send your ad to the list you want without paying the broker’s commission. In this example, you would pay the list owner $45 CPM ($225) to send your ad to the same 5,000 names.

How do you find good e-mail lists without a broker? Here’s the approach I recommend. Do a Web search for websites related to the kind of product you’re marketing. Let’s say you’re marketing a health product. In that case, you’d look for health-related websites. When you find one that looks interesting, sign up for their newsletter. That puts you on their e-mail list. When you start receiving e-mails from them, pay attention to what you’re getting. Does the newsletter advertise products from other companies… or only its own? Are they sending separate e-mails recommending products from other companies? Are there repeat advertisers?

Just as important is to make sure you are receiving useful editorial content in addition to the ads. Take Early to Rise, for example. Yes, we do send you e-mails that sell and recommend various products. However, we also send you a newsletter that is packed full of valuable information, seven days a week. Because of this, you trust us as a sender – and you open the e-mails we send… including ads for products being sold by other companies.

Now suppose we stopped sending the newsletter, and every e-mail we sent was an advertisement. After a while, you’d probably stop opening them. The same is true with websites you might want to advertise through. If the only thing they send people on their e-list is advertisements, you can assume that not too many people are opening them… let alone buying anything from them.

When you find a website that sends out good content and you’d like to test their e-list, contact them directly to ask for rates. But before you do the deal, here are two questions you should ask:

1. What is the average open rate for third-party mailings? (How many people on their e-mail list open the e-mails sent to them by outside advertisers?)
2. What is the average click-through rate for third-party mailings? (How many of the people who open those e-mails click on the link to the advertiser’s offer page?)

The answers to those questions will help you see what you are actually paying for – no matter how big the list is.

Let’s go back to our XYZ example, where you can rent 5,000 names from the list owner for $225. If they were to say the average open rate for third-party mailings is 10 percent, you could assume that 500 people would open and see your ad. And if they were to say that the average click-through rate for third-party mailings is 10 percent, you could assume that you’ll be paying $225 for 50 people to click through to the offer page on your website (though they wouldn’t necessarily make the purchase).

The answers to those questions can also help you determine if the CPM the list owner is charging is reasonable.

Let’s say you have determined that you can make an average of $15 for each person who clicks through to your offer. So if you get 50 click-throughs, you can expect to bring in $750. In our XYZ example, it’s going to cost you $225 to bring in that $750. Good deal. But if the list owner wanted $1,000 for 5,000 names, you can see that you would be making a really bad deal. You wouldn’t be able to break even, even if everyone who clicked through to your offer bought your product.

Most reputable e-mail list providers should be able to provide you with the answers to those two questions. They also should be able to provide you with a detailed report after your ad is sent, detailing exactly how many people opened the e-mails with your ad, and how many people clicked through to your offer page.

Your success is never guaranteed. But if the results of that report don’t match the average numbers the list owner provided you with, you can oftentimes get them to give you a free mailing or another bonus to make up the difference.

– Patrick Coffey, ETR’s Director of Internet Marketing