List Rental & Exchange

Purpose: Explain the economics and mechanics of mailing list transactions.

Overview

Before data cooperatives became prevalent, list rental was the primary method for acquiring prospect names. It remains an important part of the direct mail ecosystem, often used alongside co-op data.

List Rental

Definition

A list rental is the one-time use of a mailing list owned by another organization. The mailer pays a fee (CPM) for the right to mail to those names once.

Key Characteristics

• One-time use: Names cannot be reused without paying again
• No ownership transfer: The list owner retains the list
• Seeded: List owners insert “seed names” to verify usage compliance
• Managed: Typically facilitated through list brokers and managers

How It Works

┌──────────────┐     ┌──────────────┐     ┌──────────────┐     ┌──────────────┐
│  List Owner  │ ──▶ │ List Manager │ ──▶ │ List Broker  │ ──▶ │   Mailer     │
│  (Catalog,   │     │  (Manages    │     │  (Finds      │     │  (Rents      │
│   Magazine,  │     │   rentals)   │     │   lists)     │     │   names)     │
│   Nonprofit) │     │              │     │              │     │              │
└──────────────┘     └──────────────┘     └──────────────┘     └──────────────┘
                            │                    │
                            └── Commission ◀─────┘
                               (~20% to broker)

Pricing (CPM - Cost Per Thousand)

Selects (Additional Targeting)

Selects are additional filters that narrow the list. Each select adds cost.

Minimum Orders

Most lists have minimum order quantities:

• Typical minimum: 5,000 - 10,000 names
• Test minimum: Sometimes lower for initial tests
• Continuation: Full list available after successful test

List Exchange

Definition

A list exchange is a barter arrangement where two organizations trade access to their lists, often at no cost or minimal processing fees.

When Exchanges Work

• Organizations have similar audiences (synergistic)
• Both have lists of comparable size and quality
• Neither is a direct competitor
• Both benefit from cross-promotion

Example

Outdoor Apparel Catalog ◀──────────▶ Hiking Equipment Catalog
     (100,000 names)     EXCHANGE      (100,000 names)

Both benefit: Their customers likely buy from each other

Exchange Fees

• No rental fee: Names exchanged at no CPM cost
• Processing fee: Small fee ($5-$15/M) for data handling
• Exchange conversion: If one party wants more names, they pay rental for the difference

Key Players

List Owner

The organization that owns the customer/subscriber data.

Responsibilities:

• Maintain list quality and hygiene
• Set rental policies and pricing
• Approve or reject rental requests
• Insert seed names for compliance monitoring

Revenue: Rental income is often significant (especially for magazines, nonprofits)

List Manager

Represents list owners and handles rental operations.

Responsibilities:

• Market the list to brokers and mailers
• Process rental orders
• Ensure data quality and delivery
• Collect payments and remit to owner
• Monitor seed name reports

Compensation: Percentage of rental revenue

List Broker

Works on behalf of mailers to find appropriate lists.

Responsibilities:

• Understand mailer’s target audience
• Research and recommend lists
• Negotiate pricing and terms
• Coordinate orders across multiple lists
• Track performance and optimize

Compensation: Commission (~20%) paid by list manager

• Important: Mailers pay the same price whether using a broker or not

Why Use a Broker?

• Expertise: Know which lists perform for specific audiences
• Relationships: Access to lists and preferential treatment
• No extra cost: Commission comes from manager, not mailer
• Efficiency: Handle paperwork, coordination, tracking

Seed Names

Purpose

Seed names are decoy addresses inserted into rented lists to:

• Verify one-time use: Detect unauthorized re-mailings
• Monitor content: Ensure mail piece matches approved sample
• Track timing: Confirm mail drops as scheduled

How They Work

Rented List (100,000 names):
├── 99,950 real customer names
└── 50 seed names (owner's monitoring addresses)

If mailer sends unauthorized second mailing → seeds receive it → violation detected

Consequences of Violation

• Blacklisting: Mailer banned from future rentals
• Legal action: Breach of contract
• Industry reputation damage

The Rental Process

Step 1: Planning

• Define target audience
• Set budget and quantity goals
• Determine test vs. rollout strategy

Step 2: List Research

• Broker researches available lists
• Obtains data cards (list descriptions)
• Recommends lists based on audience fit

Step 3: Order

• Submit list order with selects
• Provide merge/purge instructions
• Specify delivery format and timing

Step 4: Approval

• List owner reviews mailer and mail piece
• May require sample approval
• Some lists restrict competitive mailers

Step 5: Delivery

• List delivered to mailer or service bureau
• Typically via secure transfer (SFTP)
• Names remain confidential

Step 6: Merge/Purge

• Combine rented lists with house file
• Remove duplicates
• Apply suppressions (DNM, deceased, etc.)

Step 7: Mailing

• Mail within agreed timeframe
• One-time use only

Step 8: Results & Analysis

• Track response by list (keycode)
• Calculate performance metrics
• Determine continuation/rollout decisions

List Rental vs. Co-op Data

Using Both Together

Sophisticated mailers often:

1. Rent lists from known performers
2. Score rented names against co-op data
3. Suppress low-propensity names before mailing
4. Supplement with co-op-only names

Related Documentation

• Direct Mail Fundamentals - Industry overview
• Data Cooperatives - How co-ops work
• Service Bureau Operations - Merge/purge process
• Glossary - Term definitions