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"Upsize misses your SEO services. Our website has never done as well as it was doing when you were in charge. We've run into companies that have talked a good game, but they've not performed all that well."

- Wesley Bergstrom,
Upsize Magazine

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Spam -- There Ought to be a Law, Maybe

The Marketing Argument for an Opt-in E-mail Standard

There ought to be a law! And many legislators are working on it. If you have an e-mail address you know what I'm talking about - spam.

Ah, but just what is spam and what kind of law could effectively put an end to it without jeopardizing our ability to send our commercial message, uninvited, to the e-mail recipients, who we are sure will want to receive it? After all, we would never spam.

Nine years of online marketing has taught us the difference in effectiveness of various marketing tools, including e-mail. E-mail is the only Internet tool that allows us to push out our message rather than to passively wait for a prospect to stumble across it - and it's free! Or at least very low cost. Of course, that is the problem; it is too tempting and too easily abused.

And the problem is International. Most of my junk mail looks like comic strip swearing. What law that the US Congress can pass will put a stop to that, I wonder?

The current big idea is to create a "do not e-mail" list similar to the "do not call" list to fight unsolicited telemarketing - an opt-out list that all can subscribe to. Well my e-mail address isn't going on that list, uh-uh, honey.

The most egregious spammers; the ones who sell e-mail harvested from Web sites as "double opt-in" e-mail addresses; the ones who mask their identity to hide who they are, the ones who promise to augment various body parts and cure your financial woes; those folks are drooling at the very thought of such a list.

The law needs to be very carefully thought out and it needs to have international agreement. The European community has set a standard of "opt-in." Bulk messages can only be sent to e-mail addresses specifically given for that purpose.

Does that kill e-mail as a marketing tool?

No. It makes e-mail an even more powerful marketing tool and here's why.

The most useful aspect of the Internet as a marketing tool is the ability to build relationships, with your customers, your business partners and your market as a whole over great distances. E-mail is the bedrock of these relationships, providing inexpensive publishing of newsletters, ability to be involved in discussion groups and ability to inexpensively touch base with customers on an ongoing basis.

Used appropriately, e-mail is the goose that lays golden eggs. The whole NetSuds empire was built using opt-in e-mail. Misuse of e-mail bears a heavy price, however.

When the bookseller Barnes & Noble ventured onto the Internet, their first action was to buy an e-mail list and announce the new online store. They spent the next two years recovering from that. Even Internet savvy Amazon was christened "Spamazon" for sending promotional e-mail to people who had bought books from them; they had not gained permission to send future correspondence.

Now, the spam is so bad that few people take the trouble to protest to the perceived spammer, but that makes damage done by unsolicited e-mail all the more insidious. Recipients may be forming negative impressions and you have no way of knowing.

Then how can the good guys do direct marketing using e-mail?

There are two ways to promote using e-mail lists that you have not built yourself:

  • Sponsor an e-mail newsletter or discussion group with an ad.
  • Send e-mail to someone else's opt-in list.

E-mail advertising or sponsorship has a much higher response rate than banner advertising. If the message is well targeted to the interest of the newsletter or discussion, you can experience click-through rates between 2% and 5% as opposed to unsolicited e-mail which boasts .2% to .5% click-through and banner advertising, which is experiencing .5% CTR.

The e-mail advertising works best when there is a strong affinity between the subscriber and the newsletter, such as NetSuds. Advertising through free discussion hosts such as Topica, is less effective because people relate to the moderator of the list and not to Topica. Ads in newsletters or discussion groups hosted free by Topica are treated like banner advertising and have a similar response.

The second option, sending a message to someone else's opt-in list ventures toward the gray area between spam and not spam. The primary difference is that an opt-in e-mail list cannot be purchased. A true opt-in list has specified to the e-mail address owner the use that will be made of the e-mail address. Once the address has been sold, the opt-in list owner no longer has control of how the list is used and can not live up to the agreed upon use. When you send e-mail to a list that you have purchased it is perceived by the recipient as spam and negatively impacts your brand image.

Our experience with well targeted, stand alone e-mail offers to true opt-in e-mail lists shows, not only a higher click-through rate, but also a higher conversion rate. A free offer promoted through both banners and e-mail to several opt-in lists had a click-through rate of .2% for the banners vs. 2.2% for the e-mail. The conversion rate was even more dramatic; while about 2% of those clicking through the banner acted on the free offer, about 45% of those clicking through from the e-mail acted on the offer (see chart).

AD UNIT

IMPS. (000)

AVERAGE CLICK RATE

AVERAGE CONV. RATE

NO. OF LEADS

All Banners

11,420.8

0.2%

1.94%

888

All Dedicated Email

801.7

2.18%

44.73%

4,515


Why should the standard be opt-in rather than allowing people to just opt-out?

We have already experienced the ineffectiveness of laws requiring information about how to opt-out in e-mail. Many spammers now have a paragraph in their spam messages pointing out that their spam is not spam because you can opt-out. Many have complained that the opt-out feature is simply used to confirm that the e-mail is working and brings on even more spam. This has destroyed the trust of e-mail recipients to the extent that they can be hostile to unsolicited e-mail, even with a valid opt-out mechanism.

The following graph taken from the July 16, 2002 eMarketer Newsletter illustrates the difference in performance between opt-in e-mail lists and opt-out.

When interviewed about the performance of opt-in vs. opt-out e-mail lists, while 78% of respondents believed that a list can be grown faster using an opt-out mechanism, the same percentage saw that opt-in e-mail lists delivered much better results as shown in the following chart.

eMarketer Graphic comparing the effectiveness of opt-in vs. opt-out e-mail list quality.

With permission from eMarketer.com

There may need to be a law, but with or without a law there are good reasons for online marketers to make opt-in e-mail the rule when building lists. We have shown that opt-in e-mail advertising gets excellent results and building opt-in lists creates stronger rapport with clients and better response from prospects.

Initially published in NetSuds Monthly Report, August 2003

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