A comment from a list provider on a previous post inspired me to write this post because I want to warn you all.

Companies that advertise that they sell email lists "for as low as 60$" should never be trusted. Where did they obtain these email addresses? Did they scrape them off a bunch of websites or did they use other shady tactics like that? By purchasing a list and sending a campaign to that list, you'll be labeled as a spammer instantly. So stay away from them. Don't. Ever. Purchase. Lists. Period.

Please note that I am not saying that renting email lists is a bad idea. List rental can work. But you should always ask the list rental company how they got the email addresses, how they obtained the subscriber's permission (ask them to show you examples) and how often the list is emailed. The last thing you want is that your company/brand is labeled as a spammer for sending emails to people that didn't ask for them.

Also, make sure that it's the list rental company that sends out the emails. If they give you the list so you can send the emails from your system, run away as fast as you can. Seriously. If they are serious about their business they would never just give you the list. So if they do, I'm guessing they do it because they know they will get loads of spam complaints and bounces and they don't want to risk their own sender reputation.

Ask them to do a trial on a random subset of their list to see if you'll actually get a return for your money. List rental is not cheap and there are not a lot of good email lists out there to rent.

Last but not least, if you really think that renting an email list rather than building your own email list is a good practice, think again. The only reason why I would ever recommend someone to go out and rent email lists is when they want to get started with email marketing and they need to build their base from scratch. In that case, list rental could help you get started if you use it only to promote your own list.

Renting email lists should never be a long-term tactic. It's just not cost-effective enough.

I'm sure there are people out there that disagree with me. They are probably in the list rental business themselves :-) But, if you are not in the list rental business: feel free to share your experiences (good or bad) in the comments!

In the article "Signs that an E-mail Deal Smells", Ken Magill shares a couple of warning signs that should make you wary of an e-mail list renting deal. Here they are:

• The sales person is pitching you from a Gmail account or has an e-mail address that doesn’t contain a version of his or her company’s name. Why would an executive from a legitimate vendor not have a company e-mail address?
• The vendor will not send messages on your behalf to the list they’re selling/renting. It’s an indication their servers may be blacklisted as sources of spam and they can’t get their e-mail into recipients’ inboxes.
• The prospecting pitch contains no physical address, or if it does, the address turns out to be a rented mailbox or a mail-forwarding service. A suite number that is too high to be an actual office address is an indication the rep is operating out of a rented mailbox. Also, it’s fairly easy to do a Google search on an address. If it’s a P.O. box, the box-rental company will appear in the results. In larger cities, Google Maps will return a photo of the address. Take a look at the neighborhood. Does it look like a place out of which a major data seller would operate?
• The company wants full payment up front. Anyone who has ever dealt with a contractor knows never to pay 100% up front. If things go bad you have no recourse. Half down is appropriate.
• The company’s Web site offers no identifiable details about its executive team, such as where they went to school or where they have worked.

Read the full article here.

I couldn't have said it better than DJ Waldow:

"The problem with list rental is that the subscribers are not nearly as engaged as those who find you directly and ask specifically to be included in your email marketing campaigns. To me, that is the biggest difference. From what I’ve seen, list rentals tend to have much lower open, click-through, and conversion rates. In and of itself, lower rates are not a cause for panic, but a damaged reputation is. In my experience, emails that are sent to rented lists have more complaints, are more likely to be marked as junk/spam, and have a higher unsubscribe rate. This is where you can run into issues."

If you do decide to go down the list rental route, just make sure to check how the opt-in was obtained (don't just ask, check it for yourself!) and how often the people on the list receive emails. Make sure that the sender of the email is the list owner and that the email starts by saying why the recipient is receiving this email.

Find more list rental tips and insights here and here.

Renting a permission list for the first (or even third) time can be a bit confusing. What's normal for transmission fees? How speedy is the turnaround? Should you pay extra for brand endorsement? Should you rent more names than the minimum to run a test? Etc.

Here's a handy toolkit from MarketingSherpa to help you (also useful for training staff). Includes two sample contracts with key legalese noted, as well as a How to Read a Data Card PDF.

There are plenty of email lists to choose from, and they cover just about every niche imaginable. From talking to several list brokers, the size of the industry is anywhere from 5,000 lists to 20,000. The B-to-B list rental business is healthy and centered on reputable publishers who still command value and trust. The B-to-C list industry is less organized, and many lists aren't worth a dime. But if done properly, you can succeed.

Read this article by MarketingSherpa to learn:

• What's a list rental and what should you ask your list broker
• Which lists work best, plus costs to rent them
• Deliverability and CAN-SPAM considerations
• Creative that works best
• Measurement and considerations when conducting a list rental test

This article is the first of 2.

When it comes to renting an outside list, you do not know whether the list is a finely tuned acquisition machine or the vehicle in which your next nightmare is going to be delivered. For those of you that need help choosing an outside list provider, Michael Mayor provides a guide in his article "Email Marketing Cheat Sheet". These are the email marketing firms he covers:

• Datran Media
• Direct Marketing Data Solutions (DM2)
• Epostdirect
• IDG Communications List Services
• Return Path
• V12 Group
• Worldata
• XactMail

If you're using (or thinking of using) email list rental to find new customers, you should download Return Path's latest white paper called "How to get the most out of third party email list rental". This whitepaper equips you with the basics of choosing the right email list rental vendor, including a vendor checklist with guidelines to make your efforts in list rental successful.

Download the white paper.

The Email list marketplace is adapting quickly with new list sources, changing legislation and terminology of its own. Richard Gibson, Commercial Director of RSA Direct (Direct Marketing) & Opt -4 (Data Protection Consultancy) looks at some pointers to ensure marketers make an informed choice:

• Ask to see the website and specifically the registration page where the data is collected. This will help you understand the permission levels.
• Sign up to the newsletters yourself; see what kind of communications the site sends out and who they rent their list to. This will enable you to see how close a fit the website's brand is to your offer.
• As with traditional off line lists used for mailing and telemarketing purposes responsive lists will be used frequently. Ask the seller who these successful users are, a further insight into who is using the list.
• Does the permission level allow the marketer to send a solus campaign or does the template have to be branded from the data owner? This is key to understanding this before planning your campaign. There are arguments for both types of Email campaigns - branded i.e. from the data owner can be seen as and endorsement.
• In B2B are generic Email addresses included? Should they be? It is common for some business types to use only one, generic Email. The seller should be able to exclude these at your request.
• How large is the file size? Does it seem realistic within your target market? Be wary of huge file sizes. If the file is significantly more than you expected question the seller. Use selections to further hone in on your target audience.
• Pricing. Understand what is included in the price. Some providers include transmission and basic reporting in their advertised base rental or CPM's others do not. If not then you need to build these costs into your ROI calculations. 
• Can the seller provide de-duplication of your house list against the prospect list? What happens if there are multiple lists involved?
• The media owner should have no problem sharing with you what your report will look like. Ask questions; does the technology they use count unique clicks? How many reports will you receive and when will you see them? Some providers include limited tracking in the price. Some marketers who use a specialist technology provider can report independently of the data owner's solution and therefore get a greater level of detail on key metrics.
• Ask the seller who will undertake the transmission of the Email. Most data owners and managers prefer to do the "send" or "fulfilment" themselves through their ESP (Email Service Provider), they may have arrangements for other ESP's to undertake the transmission.
• Ask about the question about bounces. Are there any guarantees and assurances in place for bounces? Unscrupulous data suppliers will oversupply by significant margins to ensure response is buoyed. A small oversupply is to be expected, ask what the oversupply will be and how many hard bounces could be expected; will a credit be applied if it exceeds the oversupply?

A uninformed choice can cost more than the campaign; the recipient will see the advertiser as being at fault, potentially a spammer. Damage to brand can be far greater than the cost of the list and the time involved. With a few pre-campaign checks and questions to the seller you should be able to make an informed list selection.

This article appeared in a newsletter called "B2B Data Matters", a quarterly electronic publication, which seeks to educate senior management, practitioners and users of business-to-business data on how to optimize business data for profit. The primary focus is enterprise and professional personal data for sales and marketing applications in Europe, and internationally.