When you purchase a list from a data broker to use in or seed your digital campaigns and email lists, it can feel as though you are purchasing leads that are very similar to the leads that haven't responded yet in your CRM from other sources. They have a first name, last name, email address, and phone number - and so, visually, it can look like there isn't much difference. When you combine that with a lack of understanding of how online ad platforms and email systems work, it is compelling to invest in an old, broken system that these purchased lists represent.
A quick aside, I'm not talking about lists used for direct mail, whether to reach a broader audience or to retarget website visitors. That's a different article. I'm talking about email lists that will be used to blast groups of individuals who have not opted in to your brand or to create audiences to target on online ad platforms.
The Better List is (Mostly) Free
You should be using lists! And you can build several that update in real time based on what consumers are actually doing! That's what “in-market” audiences are, and Google, Meta, and the other digital ad platforms let you use them. Even TikTok has an in-market audience for people who are shopping for a home! They're free from the ad platforms because they want you to invest more with them, so they’re doing work to help you target your potential customers as best they can.
For nearly a decade, I've recommended thinking of in-market audiences as remarketing audiences for people who haven't yet visited your site or converted but are visiting other websites and platforms designed to help individuals research or secure financing for a home purchase. That’s not 100% how it works, but it’s pretty close. How are ad platforms able to get these signals to build the lists? From the tracking tools that they provide companies to install on their websites and apps to build remarketing audiences and track user behavior. When a GA4 tag is added to a site like Zillow, Realtor.com, Homes.com, etc., it helps those companies measure their audience, and it also informs Google which devices should be added to an in-market audience for those considering making a move. Google then makes that dynamic list available to any advertiser that wants to target people considering a move. Meta’s pixel and conversion API function in a similar fashion.
It’s Not Perfect, But It’s Better Than The One You Paid For
In-market audiences, largely due to privacy laws, rely on cohort (group) data rather than targeting single individuals exclusively, which is why I am often served makeup ads because I live with three women in my household, and the platforms know my device spends a lot of time in close proximity to theirs. It can also infer close relationships between categories that aren’t always correct. For instance, if I recently purchased a home, it is likely that I am also in the market for furniture and home goods, even though I may have the opposite problem: too many pieces of furniture for my new place. When it comes to housing, this cohort data is slightly less of a problem because it does stand to reason that if I'm looking to move, my wife probably is as well (or else I’ve got bigger problems!).
When you purchase a list, any amount of money spent on that list is, by definition, less money you have to put towards reaching your audience or making content that stands out. That means you must strongly believe you're making an appropriate trade-off and that the decline in reach or frequency is offset by stronger targeting. Most data brokers are not selling you anything close to real-time data. It's going to be several days old, if not weeks or even months out of date, by the time it reaches you. So you buy the list today, and it's based on data from two weeks ago, which means two weeks' worth of opportunity isn’t in that file.
Ok, so it’s a bit old, but the data inside of it is priceless, right? An MIT/Northeastern study on third-party data profiling revealed that purchased demographic data (age, income, gender) is notoriously flawed. In the paper, they describe how identifying basic demographic traits is often only 50% accurate, making it potentially no better than a coin flip. There is also no good way to verify that the data being sent to you is accurate. You have to take the person selling you the list at their word, but even they don't have a rigorous way to ensure what they're selling you is correct.
No One Else Wants The List You Bought
We've talked quite a bit about challenges with the data itself, now let’s talk about how you’re going to use the list you bought. First, I’ll address using them to send out emails. MailChimp, HubSpot, and every legitimate source of sending large amounts of email prohibit using a purchased list of any kind, and if they catch you doing it, they will kick you off the platform to protect their own reputation and trust. This is from HubSpot’s anti-spam policy:
“You are strictly prohibited from using the HubSpot Services to directly contact recipients from purchased, rented, borrowed, or other third-party lists, including email append services or enrichment services lists in violation of applicable laws or third-party terms.”
Why is there such strong language around this? There's real reputational risk for both them and you. Yes, email is inexpensive to send, but the cost shows up in two places that not enough people consider. It shows up with the people getting it, who are thinking, "I don't know who these people are; I didn't ask for this information." And it shows up with one of the true gatekeepers that still exist: spam assassin tools and the junk/promotional mailbox filter. Getting your email domain relegated there means all of your other active prospects will be impacted by lower deliverability of ALL your emails.
Digital ad platforms don’t want you purchasing a list either, and that’s because they’ve already been sued enough over it. Fair housing discrimination is wrong, and paid lists - in about every form - aren’t a loophole. The National Fair Housing Alliance sued Facebook in 2018 over an ad platform that let housing advertisers exclude protected classes, and Facebook settled in March 2019, agreeing housing advertisers could no longer target by age, sex, race, or zip code. Our team at Do You Convert often gets ideas from outside parties to help builders better target people within a builder's perceived “ideal” demographic segments using third-party lists, audience seeding to digital platforms, and other highly questionable and (in my opinion) wrong approaches. Again, Meta specifically disallows traditional lookalike audiences for the same reason, and instead has “special ad categories” for real estate that don’t allow their algorithms to consider age, gender, etc.
Investing In Lists Is Good. Buying Them Is Bad.
I want to round out the article by coming back to reinforce the idea that lists themselves are great, and you should invest in building, growing, and maintaining them. That’s what your CRM, content, websites, and ad strategy are all about (plus events, model homes, etc.). When it comes to reaching people you don't yet know or who don't know you, in-market audiences offer far more upside than a purchased one. It's true that you can't see names or phone numbers, and in a sense you are renting the in-market audience instead of buying it. Remember, though, that buying contact information is the polar opposite of “buying more leads” and comes with a host of hidden costs - with very little upside and a lot more risk.
