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Why Renting an Email List Isn’t As Shady As It Sounds – Doug Morneau
The Agents of Change

Why Renting an Email List Isn’t As Shady As It Sounds – Doug Morneau

If you’re an ethical marketer, you know that buying an email list is considered “shady” and Email Service Providers such as MailChimp won’t allow you use use purchased lists on their platform. But Doug Morneau is here to explain that renting an email list is much different, and how it can help you reach more of your ideal, targeted customers.

To break it down in its simplest form, email list rental – also known as “sponsored mail” – is really just another form of influencer marketing. It’s just one more way of allowing your brand/product/company to reach potential customers via their email inbox that fit a certain demographic that they’ve already shown interest in. You’re gaining a one-time right to contact them, but it’s the email list owner who conducts the actual mailing for you. 

 

Rich: During the 2008/2009 global financial crisis, my next guest made his clients in excess of a hundred million dollars. The results were due to his deep expertise in sponsored email and email list rental. This made him one of the nation’s largest media buyers of renting third party permission based email lists.

He’s an author, speaker, podcaster, and serial marketer. His first book, Three Big Lies: The Real Truth About Renting Email Lists to Generate Targeted Leads and Sales, became an international best seller as a podcaster. He currently hosts the Real Marketing Real Fast podcast. He interviews top marketers, industry experts, entrepreneurs, and SaaS vendors.

He’s also a CrossFit and Olympic weightlifting athlete, husband, dad, and granddad. In his spare time, you can find him in the CrossFit box, Olympic weightlifting and chasing his grandsons around. In fact, when we did our pre-interview chat, he was just coming off a virtual CrossFit session held in his own garage. But today we’re not talking CrossFit, we’re talking about renting email lists with the expert himself, Doug Morneau. Doug, welcome to the podcast.

Doug: Hey, thanks, Rich. Super excited to be joining you today.

Rich: All right, so I’ve got to come clean. When I first heard about your area of expertise and wanting to talk about renting email lists on my podcast, it felt a little skanky. Like there’s just something about this idea. So talk to me a little bit about why people have this idea that renting email lists is a bad idea or is unethical. And then tell me why it’s not.

Doug: Well firstly, it starts out with just the confusion of what the term actually means. So you know, you used to be able to rent a direct mail list, which meant if you wanted to go out to a particular magazine – say a fishing magazine – you could rent their mailing list and they would actually send the list of the people that subscribe to their magazine to your mailing house. And then your mailing house would create the letters and personalize the envelopes and send them out. And that was list rental for direct mail.

And then email comes along and we use the same term, but the difference is, and this is where the confusion is. We never see the list. We never get the list. We don’t know who’s on the list because the magazine – in this case, it was the same fishing magazine – they send the email to their subscribers. So there’s confusion on what it is. And then there’s people who just lump it in with the same, “Hey, well, you’re buying a list”. Well, no, we’re not buying, we’re renting.

So, you know, it’s more like running an ad in somebody else’s publication, opposed to getting access to the data. So that’s been the big confusion and it’s been confusing for a long time and it’s just not getting any clearer.

Rich: Right. You know, it’s funny. It’s almost like there should be a different term for this because I absolutely hear you. And when I listened to one of your podcast episodes, I realized what you were talking about. And that is really just advertising on somebody else’s list. Because I’ve gone through that process where a customer or business has come to me and say, “Hey, I want you to send out our emails”. And it turns out they bought a list. And I won’t mention any of the vendor’s names, because I don’t want to give them any business, but they just bought a list.

And unfortunately the people on the list often had not signed up or were not intending to get anything from this company. And this is why companies like Constant Contact don’t allow you to have bought lists. But what you’re talking about is absolutely completely different.

So why don’t you kind of talk us through what you do with your clients in terms of what is it exactly we’re getting when we’re renting a list for our business?

Doug: So you’re getting a couple of things A different way of looking at it, with looking at what’s moved in the marketplace recently in terms of influencers, you’re basically boring the credibility of a brand. So when we talked at one point, I had mentioned a company called Fast Company. And so Fast Company, a well-known print publication, they have a digital publication. So people have gone to Fast Company and bought either the print or they’ve subscribed to the digital and they get daily emails. So what you’re actually getting is you’re getting access to the subscribers of Fast Company. So Fast Company, they need to approve your ad. Your ad needs to be congruent with their audience. It needs to be respectful. And obviously it needs to be legal products and services. Once you pass that test, then they will take your messaging and they will send it out to their subscribers.

At which point the goal for our clients is to move people off of Fast Company’s lists to our client’s list. So we put an offer out, it might be a hard offer, it might be a soft offer. It might be, “Hey, download my new book. Hey, listen to my podcast.” What we really want to do is do something that’s enticing to that audience and speak to them in a way that they’re used to being spoken to in terms of the messaging and the style from that brand and then move them to our client’s list as quickly as possible.

Rich: All right. I love that. And there’s so many interesting things I want to delve into. So first of all, let’s talk about what the message is we’re actually putting into these emails. If you’re advertising on social media, like on Facebook, you’re often talking about making your advertisements look native, you know, native advertising. Are we trying to do the same with email? Like if there’s 10 articles in one of these blocks on an email is actually our advertisement or our common, should we make it look like it’s just another post or another item in the email? Should we make it stand out? What are some of the things that you’re seeing that are working right now?

Doug: Well, and the example that you gave, I would always come back to saying test it. So you know, if a list owner, for example, has 100,000 people on the list, you might say, “Okay, let’s send 25,000 out with this style and 25,000 with that style and see which one converts better”. Because like you said, you’re trying to get the attention of somebody who’s reading it. There might be four other sponsors on that page.

Most of what we do is after we do that testing and determine that the media gives a good ROI for a client, we will opt for what we’d call a solo email. Meaning the only content that’s in that email is yours. So it’s 100% you. And in the financial space, I mean, we’ve sent out long emails, though I’d be interested to hear your feedback, but I mean, we’ve sent out emails that are literally 16 pages long where we’ve hired a copywriter to write copy. And the goal there is to move people from that page to a landing page and 100% of the content is yours. There’s no other advertising, there’s no other distractions on the page. The people have two choices, close the email or click on the link to your landing page.

Rich: And I do something similar. I have never thought of it in the way that you do with renting lists. But when we’re promoting, for example, our Agents of Change Conference that we put on each year, we’ll often partner with a local business organizations and we will get them to promote our event in their email newsletter. But we’re always trying and we incentivize them to only promote our event in their email newsletter rather than just making it one of 10 items. So it sounds like that’s what you’re recommending we look to get to at some point.

Doug: Yep. And you’ve hit the nail on the head. This is exactly what you’re trying to do. And for your conference, like you said, you’re focusing local. The big advantage of looking at larger publications that are national, international, is there’s really no other media source unless you’re going to something like direct mail where you can find your target audience in mass. So 100,000, maybe 500,000 people who are interested in – pick another topic – health and wellness. And I know that on Wednesday of next week, we could have 500,000 ads into people’s email box within an hour. And I can’t do that with any other kind of media.

Rich: Doug, how are we finding these providers, these companies that have these big lists? Is there a list somewhere, do we work with an agency like yours? Is it because we’re already subscribed to these lists and we’re just curious?

Doug: Well, there’s a number of ways. I mean, one way is if you’re already working with an agency ask your agency because your marketing agency will likely have some contacts in the industry. And what you’re looking for is you’re looking for a reputable list broker, somebody who manages and brokers media and those types of lists.

So if you’re working with somebody in direct mail, ask them if they manage email. If they don’t, then go look for someone like myself that specializes in email, and then we do the research. So the research really comes down to the basic marketing stuff. Who are you trying to reach? Where are they?

And so in the business case, because that’s the easiest to look at, you look at Fast Company, Inc. Magazine, and the list goes on and on and on, business publications in the health space. It’s the same thing. You like Dr. Oz on TV, well I can get you access to Dr. Oz‘s email list. So, you know, it’s not really that different.

So for someone like yourself, who is an expert in marketing, you’re really just adding a channel and you’re already doing that by doing these joint ventures with local vendors. But this just gives you the ability to do it at scale and lots of times at a very massive scale.

Rich: Well, it’s interesting. You talked about these global companies and talked about local. Do email list providers allow for any sort of segmentation within that list? Such as can I target people either based on a geography, even if it’s Fast Company and say, “Hey, I want to talk to everybody in New England”. Is that something they have? And if not that, what are any type of segments that we might be able to reach within a given news newsletter?

Doug: You really just need to ask the publication, that’s where the work comes in. And that’s why you want to work with someone like yourself or an agency that understands that it’s going to come down to getting on the phone or are sending off an email with your exact criteria to answer your question. Yes, segmentation’s available. However, the caveat is that they need to be a large enough publication that they’ve got enough subscribers in the area that you’re trying to serve.

If you’re a local business, then it makes economic sense because not unlike buying any other media, if you’re buying an ad in a magazine or a newspaper there’s minimum pricing. So the minimum pricing might be a dollar amount. It might be a $5,000 minimum. It might be a minimum number of records. They might say you have to mail to at least 50,000 records. So if in your case, f they only have 25,000 people in your area, they’re going to want to charge you for 50,000 records. That’s where your agency can help and say, “Hey, no, we’re not paying for that. Don’t be ridiculous”. So there is segmentation available, but it really is on a list by list basis. And you really need to have the conversation with the list manager, list broker or the publisher themselves.

Rich: So that brings up a couple of good points. The first one is you mentioned one of those magic words pricing. So what are we looking to spend when we’re getting in?

Doug: I think for most people, I mean, they need to probably be spending over $100,000 a year on advertising. So if you’re not kind of in that space to hire someone to come in there and set this up for you, if you’re spending less than that, you’re really just going to need to do the research yourself.

So exactly like you’ve done, you’ve identified local businesses in your area and you put the sweat equity into your teams, put the sweat equity in to reach out, build a relationship with those people and ask the question, “Will you send this email out?” So that doesn’t answer your question exactly, but you know, you can start from very little where you can do joint ventures to targeting small publications that are in your area or other businesses that have your clients on their list. And you can scale to, like I said, basically to infinity> I mean, you can spend an endless amount of money doing this.

Rich: Absolutely. So you mentioned that your agency might be able to help you. So if you’re able to afford an agency, it sounds like agencies might be able to get us better deals than we would be able to negotiate ourselves, which is traditionally true with traditional media. It sounds like it’s the same here in the realm of email.

Doug: Absolutely. So if you go looking for email list rental or sponsored email online, you’ll see all sorts of companies that will advertise, and what you’ll see as their rate card. And as you know, it’s a list of the publication who subscribes to it; age, income, education, distribution, and then a price. And your agency will likely get a minimum of a 20% discount off of that pricing. In a lot of cases, the rate cards on the prices are inflated to detract people from one off people contacting the publisher. So it might be 50% off the list price. The agency gets paid a percentage from the list owner. So it doesn’t cost the company or the business that’s engaging you any more money. Actually, it’s cheaper for you to buy the media than them. And then they get your expertise. And in our case, the handholding to do things like testing and tracking deliverability and walking them through the process, if they’ve never done this before,

Rich: Is there a number or a result that we should expect from this? Or does it really vary based on the type of industry you’re in?

Doug: Well, it’s probably three things. One is the industry. So you can go and do a little bit of research on Google and you can find out what the average open rates and click through rates are for in house emails sent out by industry. So you could go say, okay, an automaker sent out an email, what’s the click through rate and the open rate? So that’ll give you some generic national data.

The second thing is the publication. So the publication that you’re targeting, are they a high quality publication? How engaged is their audience? You’re going to ask them certain questions. So you’re going to ask them, “What is your open rate for your emails? “And my expectation is the publisher’s going to tell me, or if that’s going to be the end of the conversation, “What is your average click through rate? Can you send me some samples of previous ads before that have run?” So I’m not asking for private data, I’m asking for public data. So you get an idea of what the publication can produce for you.

Then the last thing is going to come back to your offer. So have you gone in there to a list that doesn’t know you and ask people to pull out their Visa, MasterCard and spend $10,000 with you? Or have you made a softer offer to say, “Hey, let’s start to develop a relationship. I’ve got an ebook, I’ve got a webinar, I’ve got a download”, or whatever it is.

So, you know, there’s a number of factors that you need to look at and lots of it really is just the groundwork. You need to have the conversation, you want to make sure the brand that you’re going to partner with is in alignment with your business as well.

Rich: You’ve been doing this for quite some time. This really is your focus, Doug. Are you noticing any trends in what’s going, or are there certain types of creatives that go into the email that you see being more effective?

Doug: To be honest, I’ll just talk just the financial sector because that’s where most of my work has been, I find that the contrarian approach, the very aggressive approach has worked really well for us. And I know that’s not what everybody’s comfortable with, but we would test writers as well. So, you know, you hear me saying test, test, test. So we find a list that we know that produces really well, and then we hire two different writers and we have two totally different creatives, and we send the same subject line and test different content, but it goes to the same mailing list. And what we see is that people aren’t interested, at least our experience, not interested in somebody that’s kind of wishy washy. They’re not interested in, well, they either love them or hate them. And we find the love them or hate them guys are the ones that move the sales dial.

Rich: Alright. You mentioned that obviously agencies know this world inside and out. But if somebody is just wanting to do it on their own, is there a marketplace for email lists? Like, is there a list of lists that we can go take a look at and see if there’s a relevant email newsletter in alignment with the audience we’re trying to reach?

Doug: Yes and no. I mean, you can do some searching. There’s one commercial tool called Next Mark. So it’s N E X T M A R K.com. But to be perfectly honest, the problem with this is not unlike what happens with a lot of marketing channels. When you go there and you search for a list, what you’ll find is all the people who sell lists – like you mentioned, we’re not going to mention them by name because we don’t want to give them business – lots of times they’re like 70% of the lists that are in there. So it really comes down to spending a lot of time looking through them. And you’re what you’ll quickly realize when you look at your inbox after you have asked, you’ll realize that 80% of the responses are coming from the same list owners that are selling data.

So there is no one global view. There are list brokerage agencies that you can deal with. They tend to work in a certain vertical. One of the companies that I’ve worked with in terms of health and wellness, the company called Dunhill, they have tons of data on ailments. So this is going to sound a bit weird and hoping it doesn’t creep everybody out, but these are people who are suffering with something and they have given permission to receive information on solving their problem. So it might be ingrown toenails, it might be acid reflux, it might be high blood pressure. So these are super qualified people who have said, “Hey, I have acid reflux and I’m looking for a solution to that.” So if you have a product or service that can help them, then it totally makes sense to mail to them.

Now these are individual lists that have been built, permission-based, but they’re slightly different because it’s not coming necessarily from one publication, but they have opted in and they have given permission to receive those kinds of offers.

Rich: Alright. Earlier on you had mentioned, Doug, that you want to move people to your own list. And I was curious about how do we leverage the traffic that we’re sending to our own website or to a landing page. What are some of the tactics that you’re using or that you’re seeing out there that’s really helping people take those onetime email visitors and turning them into prospects or customers or clients?

Doug: Well, things have changed a lot in our favor. So when you rent an email list you do a sponsored email. Once it goes out, it’s gone. It’s kind of like running an ad in the newspaper. The newspaper is out in the trash, it’s gone. And so what you can do now is working with someone like yourself or an agency, you can use retargeting and remarketing. So when people click through the email and they hit your landing page, you’ve got a chance to pixel them and then carry on the conversation if they didn’t convert. So they got the email, they opened it, they clicked the link, they went to your landing page, and for whatever reason, they just didn’t fill in the blank. So now you’ve got a chance to remarket to them.

There’s third party technology that we can that we can bring to the table where you can remarket to everybody who opens your email. So it’s a piece of code we put in the email so it’ll allow us to remarket to them, even if they opened it and they didn’t click at all. So there’s two ways that make a huge difference in terms of lift. You know, we’ve seen custom audiences on Google, we built custom audiences on Google 3,000, 4,000, 5,000 people in a single day.

Rich: Wow. Now I’m guessing the answer to this question, we’ll start off with ‘it depends’, but I’m going to ask it anyways. When we’re trying to send people somewhere, should we be sending them to content or should we be sending them to some sort of landing page to make the close?  

Doug: I would say, test it. We’ve done both. In the investment side it was a hard sell. We’re saying, “Hey, look at this company, they’re raising money, go here”. And our expectation is that people are going to do research and they’re going to invest in the company. But on the other side, we’ve done that where we’ve used native content.

So again, this is the reason why you’d work with somebody who’s done this. You say, “Hey, Rich, I’d like to do something with Inc. Magazine. So, you’d hire a writer. The writer would write a piece of native content because we know that native advertising works really well. And that native advertising would reside on Inc.’s website and have a link back to your company saying, “Hey, for more information about solving this problem, click here.”

And then we would drive the email back to that native ad. So we would use the native ad, but not on our site. We’d have the native copy on somebody else’s site, and preferably on the list that they’re subscribed to. There’s a trust when they got the email, there’s a trust when they read the content, there’s a trust when they went to the landing page. So now they’ve seen you a couple of different ways, and then the ask is to get them back to see you. And some of that’s going to depend on how large your sale is. I mean, if you’re looking at five figure sales, it’s going to take more than a couple of times having a conversation with somebody before they’re going to wire you some money.

Rich: So you’ve talked a lot about like global audiences and national audiences. Do you have any tips or suggestions around more niche businesses or more local businesses? We touched on local a little bit earlier, but what can a niche or local business do to tap into the power of renting a list?

Doug: Well, niche is the best, it was the best way to go. And you just need to look at your trade publications. So, you know, what industry are you in? And you’d be surprised. I did some work with one client that had a foundry, so they pour steel and they make fire hydrants. Well, there’s an association for foundry men.

And I worked with another client that was in the concrete business. There are half a dozen concrete magazines out there, and it’s not something you and I are going to be sitting at my living room table and have a cup of coffee and read about concrete. But for people who are in that business, they read it. So the niche stuff is there, but that’s just simple research.

You know, what industry am I in? What associations are out there? What trade publications exist in my industry? Go to their website, look for the link for their media kit or link that says ‘advertise here’. And then you start a conversation with the ad rep saying, “This is what I want to do. Do you offer this?” And you know, it’s a simple yes or no. Most do, but most don’t advertise it.

Rich: Interesting. So how do we know if these emails have actually been sent and delivered, what kind of reporting can we expect now? I assume if we’re sending people to our own website, obviously we’re going to be able to track that with Google analytics. But if we’re not sending them there, or we just want to know what the open rates were or click through rates, is that a typical reporting thing that we should expect?

Doug: No, that’s all what you’d expect from the list owner. One of the challenges of the list owners is, the list owners all use different platforms. So someone might use Constant Contact, someone use my use iContact, somebody else might use Maropost or Infusion Soft or whatever they’re using. And each of those email service providers report differently. Some report unique opens. So that means if you’ve opened it on your desktop and your laptop with the same IP address, it’s going to say that’s one open. Some report total opens, so the data gets a bit skewed.

They will also provide you with deliverability. So they say, “Hey, you rented 100 emails from us. We sent out 115,000 to make sure they got delivered. This is how many we delivered. This is how many were open. This is how many were clicked”, and that’s great from the vendor, but I don’t stop there. I want to know more than that.

So like you said, Google Analytics is one way to track it. We use a tracking pixel, so we’ll put an invisible pixel in the email. And we’ll actually look at that pixel and see how many times that pixel was fired. And we will use those tools as well as a third party tool. So we’ll use a third party tool, like 550ok, or there’s other deliverability tools. And we will give the vendor what we call a ‘seed list’. We’ll give them 100 email addresses that get included in the mailing, and what I’ll get is an instant report for deliverability; how many were delivered, how many went missing, how many went to the Google promotion tab, how many went to the junk folder, how many were delivered to Yahoo, Roadrunner, AOL?

So there’s a ton of data. And we do this for our clients because we want to make sure that we’re getting exactly what we paid for. And with this extra insight, it gives me the ability to get on the phone and say, Hey, Mr. Advertising guy, you didn’t deliver to AOL. And we’ve tested the content and we’ve used multiple media. So it’s not our content. So don’t even try to say, it’s my content. You have deliverability problem. We’d like to keep this between you and I, so what are you going to do to fix it for my client? Or are you going to resend to the list?

And so I have a lot of those conversations and obviously I had them privately because my goal is to solve the problem for my client, not to solve the problem for the world, and make sure that my client gets what they paid for.

Rich: So you brought up two things that are really interesting. One is that you are able to put a tracking pixel in somebody else’s email. So in other words, email publishers are okay with that tracking pixel that you actually control. Correct?

Doug: Yes. I call it a tracking pixel, but it could be an image in your email. Now there are some there are some vendors that will host the images on their site. And one of the reasons they’ll do that is because of the volume of email that you’re sending. When I first started in this business, 10, 12, 15 years ago, I got booted from my internet service provider because we were slowing down their entire business with the volume of email we were sending. Because we had all these images hosted and we’re sending out over a million emails a day. And it started slowing down their service. So we went to mirrored redundant servers with load balancers. Not everybody does that. So there is, you know, if you’re going to do things at scale, you need to look at the ability for your service to take the traffic. But I’m talking extreme volume.

And some of the vendors, like I said, will host the images on their site. So again, that’s a question you ask. So are the images hosted on your site, or they hosted on my site? And if they’re hosted on their site, then you know you’re going to miss that tracking pixel. So then you have to have the conversation and say, “I want you to leave this invisible pixel in so we can see some insight and make sure that what you promise to deliver to me, you delivered.”

Rich: And the other thing that I found fascinating is you talked about deliverability reports where you’re basically feeding their list with a hundred or so emails, just to kind of confirm their reports on what they’re actually able to deliver. And that’s something that sounds like something that an agency would do not necessarily somebody is going to do on their own.

Doug: Exactly. Because that’s a third party tool that you have to pay for. Years ago I used a tool that was eventually bought by IBM, just as an example. And it was called Pivotal Veracity and the tool cost me $2,500 us a month. So I just offered that service to my clients. I use other tools now that that aren’t that expensive because the technology got better. If you engage me, I’ll get the list for you. We’ll do all this extra stuff.

So you’re right. Most people aren’t going to know that those tools exist. And if they do, they need to find them. They need to learn them. They need to pay for them. So they’re going to have to be pretty darn serious about making email a big part of their business if they want to do all those pieces themselves.

Rich: Amazing. Very cool stuff. Doug, I really appreciate your expertise today that you shared with us. Curious, where can people find you online?

Doug:  Just go to my branded website, dougmorneau.com. There’s information there about what I do have my contact information there. I publish a newsletter twice a week. I send out an email, one promoting guests, like when I have a great guest like you on my podcast that goes out saying, “Hey, listen to Rich’s podcast.” And then I have one that’s just pure marketing where I share with people kind of what I’m doing, what I’m testing now, what I’m going to test in the future.

Rich: Awesome. I’ll definitely check those out, Doug. Thanks so much for your time today. I really appreciate it.

Doug: Thanks, Rich. So good to talk to you again.

Rich: I’ll definitely check those out. Doug, thanks so much for your time today, I really appreciate it.

Show Notes:

Doug Morneau has been in the marketing game for over 30 years, solving sales, marketing and lead gen problems for countless businesses. He has a lot to say about helping you find your next business breakthrough. Check him out via his podcast, website, or his latest best-selling book.

Rich Brooks is the President of flyte new media, a web design & digital marketing agency in Portland, Maine, and founder of the Agents of Change. He’s passionate about helping small businesses grow online and has put his 20+ years of experience into the book, The Lead Machine: The Small Business Guide to Digital Marketing