To scale your email list for your company, you decided to look into and purchase a third-party email list. You have now entered an area of risk. The use of third-party marketing tactics and tools can violate many of the data compliance rules that govern the internet today.
In this article, we’ll discuss what a third-party email list is, why you shouldn’t use them, and how you can best utilize them while staying compliant.
What is a Third-Party Email List?
Simply put, a third-party email list is a collection of email addresses farmed by a company or individual that is not your own data.
What is Third-Party Data?
Third-party data is information that is gathered externally instead of created from within your records.
Third-party data is usually generated through an information exchange for a product or service on the customer’s end. For example, if you go to Target and buy dog food and use a credit card to purchase, Target can attribute the information provided on the credit card (your name, billing address) to your dog food purchase. Target can store that information and sell it to a dog toy company and the next thing you know, you will be getting a dog toy catalog in the mail from that company.
The same goes for when you give away your email address to the cashier at the store or on e-commerce websites online. Your behavior in-store or online creates a customer profile.
In this profile, your activities are logged and categorized on a list containing a bunch of profiles that have similar characteristics or buying habits similar to your own.
For example, let’s say you go to Home Depot and purchase a lock for your front door. A data company might purchase that data from Home Depot and put you on a list dedicated to “new movers” or people that recently moved into a new home.
An outside company like the landscaping company from down the street might purchase the list and then serve ads or send emails introducing their company knowing that you recently moved into the area and haven’t decided who is going to maintain your lawn.
Why Shouldn’t You Use a Third-Party Email List?
There are numerous red flags you need to watch out for when using a third-party email list.
The Data Isn’t Always Clean
The unfortunate case for third-party data is that you don’t exactly have a clue of where this data comes from. This is contrary to first-party data which you have complete control and oversight of where the data is generated. You don’t know if the third-party provider bought that list from another third-party provider, etc. Also, your competitors might be using the same list as well!
For email marketing, using a third-party list can have negative benefits. The major platforms for email marketing won’t allow you to upload lists or add contacts that haven’t consented to receive communications from your company. They claim it is to protect your brand but in reality, it’s to protect themselves. If the platform gets a bad reputation as a platform that sends unwarranted messages to people, that isn’t good for their end.
The data generated from third-party may not be accurate or up to date either. The list may contain email addresses that bounce messages because the address was deleted. This factor alone will cause your email sending reputation to drop amongst the major email clients. If your reputation drops low enough, your email messages will go directly to your recipient’s spam folder.
Also, there are email spam prevention clients out there that have fake email addresses that may end up on third-party lists. The idea is that if you get caught sending a message to that fake email address, your email sending domain will be placed on a “blacklist” which means you aren’t a trustworthy email sender.
It’s Not as Strong Performing as First-Party Data
The recipients on a third-party email list are simply not aware of your brand. The first time you email them, it’s 100 percent a cold message. Your email most likely will have a ton of bounces with low open rates and click-through rates.
The thing that makes a third-party email list so attractive is that is fairly cheap to acquire large swaths of data compared to running marketing campaigns to get that data. It’s also faster.
However, based on the lower performance metrics you generate, all you need is a handful of conversions to get a positive return on investment. That’s why brands sometimes opt to use third-party email lists.
But the effort and returns you receive over the long term from using first-party data supersedes what you’ll get in the short term from third-party data.
There Are Many Laws and Regulations Behind The Use of Third-Party Data
When you mail to a third-party audience for the first time, you have to be wary of spam regulations.
If you’re a large organization that has a worldwide customer base, you need to worry about GDPR. GDPR is the General Data Protection Regulation that was put in place in 2018 by the European Union.
It ensured that citizens of the EU can request any information companies have stored on them. In an event of a data breach, GDPR requires the company to reach out to those individuals whose information was a part of the breach. If a company fails to comply with either of these principles, it can expect million-dollar fines.
So if your third-party list contains European data, you are now navigating down a tricky path because the individuals wouldn’t know that your company has obtained an email list with their information. If your data warehouse gets breached, you might open yourself up to fines and lawsuits.
California has its version of GDPR called the California Consumer Privacy Act and many more states in the U.S are beginning to jump on the bandwagon of implementing data protection laws.
Another regulation you have to keep in mind is the CAN-SPAM Act.
The CAN-SPAM Act sets guidelines for email communication and ensures that recipients of your email have the right to opt out of receiving further email messages from you. Guidelines include not using deceptive email subject lines, having an unsubscribe or manage email preference link, proper identification of whom is sending the email, and much more.
How To Utilize Your Third-Party Email List and Stay Compliant?
Don’t Use For Email
One my of best suggested uses for a third-party list is to use it as a lookalike audience especially if you are lacking your first-party data.
If you find a tremendous third-party list and receive assurance that the list is high performing in terms of engagement and conversions, you may want to consider using that list as a look-alike audience for your customer acquisition campaigns to build your email list.
If you can find a list that segments the audience based on broad interests, that might be the best option. For example, if you sell car insurance you might want to find a list of people that have bought a car in the last year instead of getting a more specific list of people, like people who bought a car in the last year aged between 18-25, that are currently in college, etc.
This way, when you target these people, you can begin to make better targeting reads based on the individual’s click, open, and convert on your email.
Ensure that any landing page or website page that recipients are sent to from the email has pixels for tracking any ad networks you use. If they haven’t converted right away, they’ll need more exposure to your brand and massaging to get them to become comfortable with your brand and ultimately convert.
Follow All Best Practices Regarding Sending an Email
If you are hell-bent on really using a third-party email list, you need to ensure that your email has the best chance of reaching inboxes. A decent number of addresses will bounce which can cause suspicion in the eyes of the major email providers. If you raise the alarm with them, your emails will all go to spam.
Make sure you are using a separate IP address for sending third-party emails, different from the IP address you’re website is on or sending day-to-day emails with. When sending messages that may potentially go to spam, you need to ensure that your functional infrastructure is not affected when an email service provider potentially blacklists your IP address.
You also need to warm up this dedicated email IP address by incrementally increasing the number of emails sent over 30 days. When you warm up your IP address, the chances of your messages reaching the inbox increase and you won’t likely be blacklisted by a provider.
As for the content of the email, it can’t feel like spam. You need to use a great subject line. Include personalization tokens to make the subject line more engaging. The body of the email needs to be relevant, introduce your company, and properly communicate the offer. Avoid words like “Free” or copy in ALL CAPS as email providers will properly mark your email as spam. There are plenty of resources on the internet to help you write a compelling cold email.
Don’t Send Emails Too Often
Proper email sending cadence is a huge part of a successful third-party email campaign. You don’t want to send too many messages too quickly as this can be viewed as spam activity which will negatively affect potential conversions on your offer.
I would suggest sending one email a week. That way if your email follows best practices, recipients will become more familiar with your brand. An most likely see your brand as spam.
