International Direct Marketing: DM ventures abroad

Running DM campaigns across several countries is no longer such a daunting task. Bill Britt reports on the developments.

There is nothing so disorientating, or exhilarating, as foreign travel. Doing business abroad can also be scary as there are plenty of horror stories about respected companies coming a cropper in a foreign market.

But the good news is that due to supplier consolidation at the international level and advances in technology, it's getting easier to mount direct marketing campaigns across several countries. Clients increasingly demand consistency in their international communications. In March, HP announced plans to consolidate its global DM business, a month after Microsoft moved its $400m (£224.6m) CRM business from a group of agencies to two: Wunderman and McCann-Erickson Worldwide's MRM Partners.

The suppliers that enable direct marketers to mount multi-country DM programmes continue to consolidate in response to client pressure. In March, US marketing database giant Acxiom completed the EUR30m (£20.1m) purchase of Consodata's consumer lifestyle companies in the UK, France, Spain and Germany as part of its plan to become the leading data and services business in the pan-European market. Two months earlier, Acxiom completed the £23.5m purchase of Claritas' consumer lifestyle database operations in the UK, France, Germany, the Netherlands, Spain, Portugal and Poland.

Rivals such as Experian have also been expanding their European offer.

Last autumn, the data service provider formed an alliance with German-based Az Direct, part of Arvato Direct Services and a division of media giant Bertelsmann. They jointly offer services, including prospect data, data management and cleansing across eight countries. In another alliance, Aspect Marketing Services formed a DM support services venture last year with Continental partners such as France's Safig and Italy's Omnia Network to marry local account management with a coordinated approach to multi-country services such as database management, telemarketing and direct mail.

Although a general shift is emerging towards a one-stop, seamless DM service across borders, there remain widespread problems in the availability and quality of lists and lifestyle data. In a reverse of the usual order of things in the UK, when it comes to lists, the quality of pan-European business lists is superior to consumer lists.

Pan-European business newspapers and magazines, foreign conferences and business directories, provide a rich source for international B2B lists.

But when it comes to consumer lists, it's often better to acquire national lists since there are relatively few European consumer lists.

"There are international lists of consumers, but they tend to cover only one or two countries," says Nicola MacRobbie, director of third-party data at Dudley Jenkins.

And while UK list brokers can be good for advising on international lists, she recommends that for national ones, local list brokers in each country be contacted.

Local expertise

Savinder Lefevre, director of international list broking at Prospect Swetenhams, agrees that it's important to partner with a local expert, who knows the local mailing preference files and how address standardisation differs. Gerry Scott, managing director of list company HLB, suggests contacting the local DMA in each country for help in finding a list broker.

Although they have informal relationships with brokers in other countries, common ownership across borders is rare.

The quality and depth of foreign data varies. In the UK and the Netherlands there's good postal segmentation, but generally on the Continent postal codes usually cover such a wide area that they aren't that useful, according to EuroDirect client services director Martin Bradbury. Census data and in some countries electoral rolls can be used to enhance addresses, he adds.

Terry Hiles, managing director of address management solution supplier Capscan, says the accuracy of the address database is crucial.

"In the UK and the Netherlands, because the postal file provided by the national authorities is near comprehensive and of good quality, a postal code and house reference is sufficient to return an accurate address. But elsewhere address data isn't necessarily this accurate.

"While the raw data provided by a number of national postal authorities provides a useful starting point, for real accuracy this frequently needs to be enhanced with data tables derived from other sources such as government agencies, publishing houses, utilities, associations and private companies," he adds.

The availability and quality of lifestyle data is also patchy on the Continent. "There's more data out there than most people imagine," says Dawn Orr, former managing director of Consodata and now data group leader at Acxiom UK since its acquisition of the former. "The difference is the depth of the data. In the main there isn't access to voter rolls but there are telephone directories in most countries that we can use. Even if directories can't be used at the individual level they can be aggregated. And in most cases they can be used for address validation."

MacRobbie agrees: "In Europe some lifestyle data isn't as well developed as it is in the UK, where it's the most evolved. We also have more lists than most countries."

Scott says that in general there's some lifestyle data in major European markets, but it's not available to the same depth. The exception is Germany, which has one of the world's most well-developed mail order catalogue markets (see page 9 for details on Procter & Gamble's innovative DM programme in Germany).

"Most of the large countries have lifestyle analysis available. Companies such as Claritas and Consodata can generally offer what you can get in the UK," adds Prospect Swetenhams' Lefevre.

Bradbury adds that using geographical information systems (GIS) can also flesh out data. EuroDirect's new Microvision GIS product uses CAMEO classifications to perform segmentation and analysis, and covers Europe, the US, Japan and Austria.

Capscan's Hiles agrees that basic data must be enhanced. "It's vital to profile and target your customers and prospects accurately. It's no good sending direct mail on a luxury car to someone who is a low wage-earner. Plugging in lifestyle datasets from companies such as Experian help you target your campaign."

Cost concerns

The cost of international lists can come as a shock. "The most surprising thing to clients is price - international data can be three to four times what they are paying for a UK file," explains Lefevre.

In some cases, national lists may be slightly cheaper than they are in the UK, but in some markets there are minimum charges of, say, EUR500 (£334.8).

In some countries, such as Germany, there can also be extra set-up charges.

Basic DM rules still apply, whether the campaign is foreign or domestic.

"Find out what's in the data and profile it," says Bradbury. "Be prepared to test. Do a check on data before you use it."

COMMENT

SAVINDER LEFEVRE, director of international list broking, Prospect Swetenhams

Some of the pan-European lists of B2B publishers aren't very selective and won't specify whether the publication is going to a home or a business address. Also, the quality of data from business directories differs from country to country.

DAWN ORR, data group leader Acxiom UK

In the past, the UK was well ahead of the game when it came to the quality of data. Now that the value of the Electoral Roll here has been downgraded due to people opting out, there's probably more of a level playing field between the UK, Spain, France and Germany.

GERRY SCOTT, managing director, HLB

The availability and quality of data is nothing like what we have in the UK. The volume of data available in some smaller markets raises the question of whether there's enough critical mass to make a mailing worthwhile. In Finland a big mailing campaign is 60,000 pieces.

MARTIN BRADBURY, client services director, Eurodirect

I'm a geographer by training and yes, every market is different. However, there are so many international products these days that what will work in Country A will work in Country B. You need to look at these markets with a common tool.

TOP TIPS

1. In many countries, the postal file provided by national authorities is only a starting point and must be enhanced with data from other sources such as the census, telephone directories, publishing houses, utilities and voter rolls.

2. For international campaigns, test a combination of international and national lists.

3. When buying national lists, work with a local broker who can advise on the best lists, local mailing preference files, suppression files and local address formats.

4. Ask your national list buyer to recommend foreign list brokers and check with the direct marketing association of each country.

5. National lists are generally much cheaper than multi-country lists, but there may be extra charges attached to national lists, such as minimum charges and set-up fees.

6. Make sure your bureaux can handle international data, including foreign addresses and merge/purge.

7. Enhance your basic data, using lifestyle survey information and geographical information systems.

8. Profile people with the same variables in your home market, such as as lifestage and income, but make sure you conduct several tests.

9. Check copy with a native copywriter to ensure creative conforms with the local culture.

10. Be aware of the most popular methods of payment - some nationalities prefer to pay with giros rather than credit cards.

Discussion

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