Brokers assume expanded marketing role

Folio: The Magazine for Magazine Management, Jan 1, 1992 by Karen Burka

Pressed by clients to find innovative mailing opportunities and negotiate better list deals, mailing list brokers are playing a more active role in publishers' marketing plans.

"Mailers are looking for every ounce of marketing information they can get, and list brokers are a relatively inexpensive way to do that," says Mark Liu, executive vice president and COO at Greenwich, Connecticut-based AZ Marketing Services.

Today's brokers are going so far as attending client circulation and marketing meetings and getting involved in direct-mail package design, program strategy and number crunching. "We can be as technical as a mailer wants," says Linda Weintraub, vice president at RMI Direct Marketing, a Hawthorne, New York-based list firm. "We segment and categorize a client's house file and measure the performance of each category. That lets us be creative in finding peripheral markets that show some affinity with subscriber characteristics."

Linda McAleer, senior vice president at the Millard Group, a Peterborough, New Hampshire-based list firm, says finding new ways to segment a targeted list or database is another way she's helping brokerage clients. "We discovered that the Time Warner database had a large volume of four-line addresses. As a select, that became very attractive to our mailers," she says.

Brokers say mailers must be willing to share more information with them and publishers seem to agree. Thomas Corry, senior product manager at The Reader's Digest Association, Inc., says he expects his brokers to be "the eyes and ears of what's going on in the business." To that end, Corry shares such information as back-end costs and results, market research findings and all customer demographics.

All this raises another issue: compensation. Because a broker's commission is based on the volume of names rented, negotiating better discounts and finding better segmented lists actually reduces a broker's pay. "Commission structures basically penalize the broker for doing a better job," claims Richard Vergara, senior vice president at the New York City-based Kleid Company, where brokers are testing new compensation structures such as annual retainers and fee payments. "In situations where a mailer requires more service than normal and a broker has become indispensable to that client--then a more suitable payment structure is warranted."