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OUTLOOK & STRATEGIES FOR 2006: LAKE GROUP MEDIA, INC.



By FOLIO: Staff
01/20/2006

LIST MANAGEMENT 2006
THE CHALLENGES & OPPORTUNITIES

LAKE GROUP MEDIA, INC.
411 Theodore Fremd Avenue
Rye, NY 10580
P: 914-925-2400
www.lakegroupmedia.com

OUTLOOK & STRATEGIES FOR 2006

"The tried and true methods of strong list research, analytics, price negotiations, and great customer service remain the benchmark for Lake Group Media," says CEO Ryan Lake, "and these cornerstones will not change in 2006. Our company outlook is strong."

For the industry as a whole, though, Lake is only "cautiously optimistic" due to certain challenges that he expects list companies will have to overcome in the coming year. On the other hand, he notes, "continued advancements in modeling and database development present opportunities for effective and efficient direct mail and email marketing."

According to Lake, the three most important challenges facing the list industry are legislation, list source mix, and increased costs. "Increased government scrutiny and the potential for legislation to continue to hamper our marketing efforts are of great concern," he explains. "Also, an increasing segment of response lists have growing percentages of online-generated subscribers or buyers. Although match-backs to mail files allow tracking to particular direct mail efforts (e.g., a consumer who receives a catalog but purchases online), the impact of online-responding names on direct mail still remains to be seen."

As for increasing costs;specifically the January 2006 increase in postage costs;direct mail remains an expensive option for marketers. "Direct mail requires marketers to consider the long-term benefits of a healthy direct-mail program," Lake says, "but that is sometimes hard to remember during the annual budgeting process."

Over the past five years and with very few exceptions, he adds, publishing clients in particular have cut back on their direct mail budgets and relied instead on alternative sources. "The problem with many of these other sources," Lake indicates, "lies in their renewal rates, which often are extremely low. Our recommendation to publishers, therefore, is to reassess their marketing mix and to review the lifetime value of each new subscriber. By doing so, they will find that a return to direct mail will be beneficial to the long-term health of their publication(s)."

In fact, Lake Group Media realized several years ago that budget constraints were causing publishing clients to spend less time on mail planning and analysis. As a result, the company morphed itself into a direct-marketing agency that provides full-service direct mail consulting to compensate for client staffing issues. In addition to the test recommendations, balance counts, and price negotiations that traditional brokers offer, Lake Group Media provides its clients with comprehensive mail plans that incorporate rental and client house files based on pre-determined historical performance benchmarks;usually gross/net response, profit per copy, etc.;and at no cost to the client.

"Once we prepare a mail plan," says Lake, "we meet with the client for a strategic review and to make any adjustments required. That's a far cry from providing basic information and having the client build the plan. As a result, we truly become partners during the mail-planning process."

Lake Group Media also has proprietary access to multiple cooperative databases, as well as strategic partnerships for building private databases that provide a competitive advantage. "We expect the use of both to increase in 2006," Lake predicts, "as the benefits in terms of list cost efficiencies and the value of much richer data pay dividends through increased response rates."

Current expectations for the company in 2006, according to the CEO, are "to grow our core competencies in list management and brokerage;organically through increased revenues for current list management clients, as well as through new business development in management and brokerage."

Lake Group Media's major publishing clients for list management and brokerage include The Economist, Scientific American, Smithsonian Magazine, National Review, American City Business Journals, and World Publications.

List Management 2006 - Index

SPECIAL REPORT INDEX
12 TRENDS THAT ARE SHAPING THE LIST INDUSTRY
6 SOLUTIONS TO THE TOUGHEST LIST CHALLENGES
OUTLOOK & STRATEGIES: ALC
OUTLOOK & STRATEGIES: CLIENTLOGIC
OUTLOOK & STRATEGIES: LAKE GROUP MEDIA
OUTLOOK & STRATEGIES: STATLISTICS

By FOLIO: Staff
01/20/2006







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