Email continues to be the top source of marketing for SMB´s (Borrell Associates, 2018) and local media are adding email marketing for local businesses to digital offerings at record speed.
So what are the advantages and disadvantages for local media or agencies to a white labeled third party versus reselling their own email lists?
Email marketing in this case does not mean selling ads on a newsletter, or selling ownership of a list, but rather the ability for local media to create and send emails from small business to a targeted audience on a per send basis. It is a service that is in high demand and can be easily added to advertising and marketing bundles.
There are three basic options for executing this kind of email marketing program: Inhouse via the media´s owned-email list, a partnership with a white label third party partner, or a hybrid model that combines the two.
Here are some pro´s and con´s of each option:
1. The inhouse model
At first glance, selling exclusive emails using media´s owned email lists looks attractive.
The profit does not have to be shared and ownership of extra email addresses can be purchased outright from a data broker.
But the con's are usually insurmountable for programs with any scale.
* Sending the wrong advertising message to an audience that opted in for news, sports and weather reports creates bounces, unsubscribes, lower open rates and higher complaints.
At scale the media-owned email lists will simply shrink. In effect, the more successful the sales program, the smaller the list will get.
* Cost and ease of implementation are also factors. Costs include administrative time to manage segmenting, sending and reporting email marketing programs, and to continue to rebuild data that is continually "opting-out" due to over-sending of sending a commercial message to the wrong audience.
* Data that is purchased outright can help keep the email audience numbers higher, but this is lower quality data replacing high value brand loyalists. The data also typically comes in raw and unsegmented.
* Targeting is limited, and low response rates keep pricing commodified.
For this reason, most maor media companies are outsourcing with a trusted white label email partner, such as Site Impact, the company most used by media resellers in the email marketing space.
2. Using a third party white label service
White label partners charge a small wholesale fee per email sent. This appears to lower the margin on each email, but targeting also allows media to raise the pricing, and a third party also provides other advantages that allow programs to scale efficiently.
Here are a few of the most important "pros":
A third party partner allows media to immediately go to market with a better product, due to better targeting.
Local news sites are stilli learning how to capture and segment registered user data and understand who is interested in subjects beyond sports or food.
Even so, local media cannot yet match the type of targeting provided by a third party partnership like Site Impact, which targets opted-in audiences not only by age, income, geography but also more than 350 behavior interest points.
The more targeted the buy, the more local business are willing to pay.
For example, in the lucrative automotive category, Site Impact´s enhanced automotive data includes the age and brand of cars owned and purchase intent factors.
Part of the ability to target at this granular level is simply having enough data so that micro-targets with numerous filters can be fulfilled.
Local media who launch a third party partnership instantly have enough email inventory for almost any request.
Improved results for SMB's
Related to better targeting are better results. Anyone who has segmented email by interests knows that improving the match between the audience and the advertiser´s message can have "hockey stick" improvements in performance, including opens, clicks and offline traffic.
Ease of implementation and speedy turnaround
Designed to produce email marketing at scale, third party companies like Site Impact use dashboards that reduce the selection of complex target mixes to a series of check-box clicks. The program is off the ground immediately. A sales person can take an order at 3 p.m. and send a promotion to a targeted list the next morning. When they feel confident in the ease of fulfillment, they also sell more.
No conflict between user-experience and advertisers needs
For media companies working hard to register their owned-audience, using a third party opted-in email service is also a way to avoid conflicting goals: Building a relationship with the media audience and meeting the demand of small businessses who want a more intrusive advertising experience.
A third party supplies audiences who are opted-in to receive commercial messages and keeps these priorities separate and intact.
Immediate ROI without upfront investment
Finally, a third party allows resellers to "get off the ground" quickly, and make a profit from the first sale, using wholesale/retail pricing.
Legality of using customer data is an increasing concern.Can-spam laws were murky to begin with, but today GDPR rules in Europe and proposed legislation in California and other states are sending a red flag that deeper penalties are nearly certain in the future.
A legitimate third party service like Site Impact largely removes this liability from the media reseller, providing a more stable long term program. The media company is also able to assure businesses that their emails will always be in compliance with the new rules.
3. The hybrid model
Media companies that start out reselling via a third party platform can continue to develop their own segmented opt-in audiences, relying on schedules of contesting and other data tools to accumulate unique data on owned-audiences over time.
The hybrid model allows media to incorporated selling owned-lists where they have developed a unique advantage for a hyper-local target, but still maintain access to a full range of targeted audiences.
At Site Impact, locally grown lists can be merged into the database with supression of duplicates.