Social networking site Tagged.com has agreed to pay $750,000 in penalties and costs to settle lawsuits alleging it engaged in deceptive email marketing practices. As part of the settlements, reached with New York and Texas, the San Francisco-based company also agreed to adopt reforms around its use of invitation emails. You can read more in this MediaPost Online Media Daily article.

The two states sued Tagged earlier this year for allegedly duping new members into providing their email addresses and passwords. Tagged then sent emails to members' contact lists that appeared to have been sent directly from the members themselves.

In addition to paying the fines, the agreement calls for Tagged to provide clear and conspicuous notice to users before accessing their email inboxes and to obtain users' explicit consent before sending email invitations to their contacts. On its blog, Tagged says it has overhauled its registration and invite-your-friends processes, and will soon be adding more new features to increase member privacy.

This is an interesting case on its merits, but what struck me is the potential implications for forward-to-a-friend and viral emails. While it's not the same thing, many marketers elect to have their viral emails appear to come from the friend who signed the person up rather than from the marketer. In this case, the friend had more knowledge about the resulting email(s), but I have to wonder if some future court will take this ruling and seek to apply it to the age-old forward-to-a-friend technique.

Posted by Bill at 8:53 AM | Permalink | Comments (0)

If you’ve heard rumblings emanating from Maine and been caught by surprise, you're not alone. Nobody noticed when a new privacy law intended to protect teens from predatory marketers sailed through that state's legislature amidst a flurry of bills earlier this year. But now various groups and trade associations say the privacy law goes too far, and are working frantically to stop the measure before it goes into effect on September 12.

In a nutshell, the law, titled "An Act to Prevent Predatory Marketing Practices against Minors," states that teenagers can't give their personal or health information to marketers if they're under 18 without their parents' consent. It also bars marketers from selling or transferring the information if it individually identifies the minors, or will be used to market to them.

At first, it sounds like a great idea. We should definitely be protecting our children online. But this has created a huge uproar for a lot of reasons. First, the federal government has already enacted a law called the Children's Online Privacy Protection Act (COPPA), which addresses many of these concerns. But it only applies to children under age 13. The Maine legislation seeks to impose restrictions on the collection of personal information from teens up to age 18.

The new law also requires marketers to obtain verifiable parental consent before they can gather information from minors. But how do you stop a determined teen from faking parental approval? Nevertheless, marketers can be held liable for damages in the courts by both the state and by private individuals.

The law is being challenged in court by several groups on First Amendment, interstate commerce and other grounds. The measure is unconstitutional, the plaintiffs say, because it violates teens' rights to free speech and prevents them from registering and receiving information about beneficial health care products and services. A coalition of Internet companies including AOL and Yahoo are also challenging the measure. They contend that the restrictions are so onerous that teens may not even be allowed to register at their Web sites.

So, very interesting stuff. From my reading, it appears the law has implications and consequences far beyond its original intention of protecting teens. Even the Maine attorney general said last Friday that the law is so poorly designed that her office will not enforce it.

I think the bottom line is, as we move forward trying to protect ourselves and our children from the Wild, Wild West of the Internet, it's going to be a whole lot harder than any of us want to believe.

You can read more about this issue in this Portland Press Herald article, and at MediaPost here, and here.

Posted by Bill at 5:30 PM | Permalink | Comments (0)

A colleague read my recent post and asked me how marketers could prevent spammers from spoofing their domains. In other words, it's pretty hard to fake an IP address, but isn't it easy to fake a "from" field and domain? (For example, Outlook Express easily allows me to put "bnussey@whitehouse.gov" in the from field.)

The solution lies in some recent technology advancements that come with easy-to-remember names like DKIM and Sender ID. These solutions provide a way for receiving email servers to validate that an incoming message is REALLY from the domain it claims to be. They are pretty foolproof and ensure that only the REAL whitehouse.gov can validate messages that purport to be from that domain. As long as the receiving email server goes through the trouble to check, it can always be sure that the sender is legitimate.

For those of you curious how this would work, read on. (For everyone else, thanks for checking in <grin>.)…

The authentication techniques work on top of one of the fundamental building blocks of the Internet—the domain name system (better known as DNS). You see, when Internet-connected computers talk to each other, they only do so using IP addresses—things like URLs are a convenience for we human beings. While it's invisible to users, every time you enter a Web URL or send an email to, say, whitehouse.gov, your browser quickly goes out and checks a DNS server to get the underlying IP address. DNS information is tightly controlled and is generally only updatable by the company that owns the domain. Email authentication solutions add an additional piece of information on the DNS record that can only be updated by the domain owner. When an email domain is being validated, the receiving email server simply checks out the DNS records for that domain and confirms that the authentication "key" matches the one in the email. That's it.

Posted by Bill at 10:43 AM | Permalink | Comments (0)

I recently had a chance to pick the brain of my esteemed industry colleague, Deirdre Baird. Deirdre is the CEO of Pivotal Veracity, Silverpop’s email deliverability partner, and one of the most knowledgeable people in the industry when it comes to getting your email successfully delivered to the inbox.

Specifically, I wanted to get her thoughts about an important and impending shift by ISPs away from IP-based to domain-based email reputation filtering.

Under the current IP-based reputation monitoring scheme, ISPs deliver or block your email based on the reputation of each individual IP address from which you send email. Under domain-based reputation monitoring, ISPs would assign the same reputation to all authenticated email from your company or domain, regardless of IP. (You can read more about it in this recent Direct magazine article.)

Can you describe that change and tell us when it will be in place?

"Currently, ISPs and spam filtering entities "attach” reputation to a particular email campaign—as is the case with "signature type filtering"—and/or a particular IP address. If, for example, a particular email creative is associated with high spam-complaint rates or a particular IP address is the source of high unknown-user rates, the ISP will then filter all mail like that particular creative or originating from that particular IP address.

"While both these methods are useful and will continue to be used, their efficacy is declining somewhat as spammers have learned to dramatically change the content and mail from thousands of hijacked IPs. The major ISPs are now moving toward a more holistic method of holding a mailer accountable for their actions. Specifically, ISPs are now moving to authenticated, domain-based reputation, whereby core filtering metrics such as spam-complaint rates, unknown user rates, and spam-trap rates will be computed at the domain level.

"This change is being tested now at AOL and Yahoo with DKIM-authenticated domains. It exists in some degree at Hotmail with Sender ID-authenticated domains, and is being considered by a number of other ISPs.

"While domain-based reputation will initially be used in addition to IP-based reputation at ISPs such as Yahoo, it will take a front-seat at AOL and, we suspect over time will become one of the most important methods ISPs will use to identify good mailers."

What will it mean to Silverpop’s customers and other email marketers?

"The impact for mailers can be summed up this way: You will be held accountable—good or bad—for everything you do under your brand, that is, your domain.

"This is great news for legitimate companies who have consistently followed good mailing practices across their enterprise and developed meaningful relationships with their customers. It is not so great news for folks who have relied on a change in IP to escape the fall-out of an email append program that went south, or a purchased list, or a leap in spam complaints due to over-mailing."

What percentage of an average B2C email marketer’s list will be impacted by this, and how will that change through the rest of 2009 and 2010?

"Yahoo is usually the first or second largest ISP on both B2C and B2B mailers' lists. AOL typically ranks in the top 5 or 10 for B2B. Their combined market share on a typical commercial mailer’s list ranges from a low of 30 percent to a high of 70 percent.

"Mailers will begin to see the impact of domain-based reputation at AOL as early as this fall, and at Yahoo in late 2009 into early 2010. Additionally, Hotmail already considers domain-based reputation, although historically they’ve placed more weight on IP-based reputation. Comcast and Road Runner are actively researching how to execute a domain-based reputation system, but are not likely to have anything in place until late 2010 at the earliest."

From a B2B perspective, do you foresee any of the popular corporate spam filters using this new approach?

"Absolutely. The large enterprise filters such as Brightmail, Cloudmark and Postini already attach a reputation of sorts to a piece of content. It is certainly plausible that the domain will play a role in their algorithms. However, as it is now, it will be a lot more difficult to isolate the impact of a domain’s mailing history from the impact of other factors—for example, content characteristics—used by the spam filters, whereas the ISPs tend to be more transparent in what caused a filtering issue. For instance, that the mailer has high spam complaint rates."

My thanks to Deirdre for sharing her thoughts and expertise with readers of this blog. If you have any questions or comments, please feel free to share them below.

Posted by Bill at 8:52 AM | Permalink | Comments (1)

For print magazines struggling to stay relevant in an online world, one publisher may have found a way.

Major media house Time Inc. has created a print magazine in which the content and advertisements are tailored to each individual subscriber. In an experimental five-issue run, Mine magazine allows readers to select titles from eight Time Warner/American Express Co. magazines that are then combined into a personalized magazine. Lexus car ads, paid for by the magazine’s sole ad sponsor, Toyota Motor Corp., are also customizable, and are individually targeted based on subscribers' responses to an online survey when they sign up. You can read more about it here.

Mine appears to have been well received by subscribers. According to Slate writer Farhad Manjoo, the publishers still have some kinks to work out—there’s some lag between issues, some of articles are a few months old, and the ads can go overboard on the personalization—but overall the idea is a success. Readers enjoy the benefits of personalized content and the portability and durability of a real-life magazine.

Personalizing printed content is an idea that has been tried before, but Time has huge brand recognition and a lot of content to choose from. It’ll be interesting to see if the idea catches hold.

Posted by Bill at 9:44 AM | Permalink | Comments (0)

In a completely new twist on the interactions between email and social media, email service provider, Campaign Monitor is using social media to try and pressure Microsoft to improve its HTML interoperability in Outlook. It's not quite like challenging the Iranian election results, but it has collected more than 20,000 Twitter comments to try and get its concerns on Microsoft's agenda.

The good news is that Microsoft took notice and responded. The bad news is that I don't think the response is what Campaign Monitor was looking for.

Check it all out on its very clever Web site.

Posted by Bill at 5:57 PM | Permalink | Comments (0)

After braving the cold weather and crowds to research holiday bargains over the weekend, British shoppers are expected to log on to the Internet and order their gifts, with yesterday's "Mega Monday" expected to be the U.K.'s biggest online shopping day of the year.

Despite the generally gloomy economic climate, Global Internet trade body IMRG predicts a big Internet turnout. Chief Executive James Roper says savvy shoppers are carefully researching purchases and playing retail channels against each other for the best deals. In fact, in the run-up to Christmas, IMRG expects Internet retail sales to increase 15 percent compared to last year.

Will Mega Monday live up to its name? Will strong email marketing continue to drive ecommerce to higher results? Speaking as an optimist who loves the holidays as well as a good bargain, I both expect and hope so.

Posted by Bill at 9:07 AM | Permalink | Comments (0)

Despite the rise of Web 2.0 and other emerging communications methods, email remains stronger than ever, according to an April survey conducted by market researcher Ipsos for online reputation management firm Habeas.

In the study of consumer attitudes toward email and online interaction with businesses released in late May, nearly three-quarters of adult email users in North America said they use email every day, and two-thirds said they prefer email for communicating with businesses.

The report also found that consumers not only prefer email for communicating with businesses now, but they also expect to prefer it five years from now, despite the rise of online threats and the emergence of other communications channels and Web 2.0 applications.

“Far from being eclipsed by Web 2.0 and other emerging communications methods, consumer expectations suggest that email will be the workhorse channel around which future online communications will revolve, said Habeas CEO Des Cahill in Habeas’ announcement.

I agree. This is something I have believed in and talked about for a while now. People love email for its ability to be highly personalized, relevant and timely. Marketers also love its immediacy and low cost in relation to other channels. And, as email marketing tools continue to evolve and become increasingly central to marketing execution, email truly will become the workhorse channel for marketers. It’s exciting to see this future unfolding.

But it’s important to remember that just because people like email doesn’t mean they will tolerate anything you want to send. More than 88 percent of survey respondents said they would like to be given more choices over the content and frequency of the emails they receive. And, a rising percentage expressed concern about being a victim of email fraud, and worry over spam and virus threats reaching them through their mobile devices.

Although email appears set to remain a favorite of consumers, email marketing as a percentage of overall online advertising spend will actually drop over the next five years from 2 percent to 1.5 percent, according to new figures from eMarketer. The research firm cites email’s low cost relative to other channels as reason for the drop, even though its figures predict that money spent on email marketing will hit $492 million this year and increase by 55 percent to $765 million in 2012.

Posted by Bill at 9:17 AM | Permalink | Comments (0)

It seems that once or twice a year, a politician somewhere decides that Internet users are being exploited when their personal information is passed around between advertisers without their knowledge or permission. Now, proposed legislation in New York would make it a crime for certain Web companies to use personal information about consumers for advertising without their consent. (You can read the New York Times article here.)

Needless to say, these same politicians probably have no idea that far more personal information, such as credit card purchases and family status, is routinely bought and sold between marketers with virtually no ability for consumers to control it. But the price we pay for being Internet marketers on the leading edge is the inevitable shots by people who don’t like change they don’t understand.

My guess is that such legislation will never see the light of day. Few consumers would volunteer their permission to be silently tracked from site to site. The drop-off in available advertising views would destroy countless Internet businesses that depend on that advertising revenue. On the other hand, it's a pretty interesting thought exercise to consider if most of the marketing on the Internet moved toward a fundamentally permission-based model... That could be a very good thing for everyone who reads this blog.

Posted by Bill at 5:59 PM | Permalink | Comments (0)

One of my favorite speakers at the recent Silverpop customer conference in London was Michael Nutley, editor-in-chief of New Media Age, the U.K. weekly news magazine. Ignoring the standard PowerPoint and visual aids, Michael got up and did something unusual--he just spoke.

He gave a terrific presentation, and I filled pages with notes on his provocative ideas. I won't take you through them all, but here are a few things he said that really stood out for me:

• PVRs (personal video recorders like TiVo) are the rejection of interruption advertising.
• The hegemony of TV and TV advertising is breaking down because people no longer live scheduled lives.
• Communities are no longer limited by geography--they can now be based on shared interests regardless of where members live.
• All roads lead to interactivity--all media is moving toward a dialogue.
• Quoting G. M. O'Connell, founder of Modem Media, on the overuse of interruption-based advertising, Michael said, "You can't annoy people into liking you." This is a sobering point for marketers of otherwise well-respected brands when they ask, "How often can I send to my email list?"
• In the social media space, you don't buy media--you earn it. This is one of my favorites.
• Brands are no longer what we as marketers tell people they are--brands are what people's friends tell them they are.
• Marketers should aspire to the condition of service. In other words, view your marketing as a service to your customers.
• Each new medium spawns a brand new form of advertising. For the Web, it was search. The question is, what will the ideal advertising form be for mobile? It's definitely not search, Michael said. My own thought is that it's not likely to be any form of interruptive marketing because mobile devices are simply too personal and too awkward to manage a stream of incoming messages.

Michael, thanks for coming out and doing such a great job.

Posted by Bill at 10:10 AM | Permalink | Comments (0)

I was just thumbing through the recent Direct Marketing Association report, "The State of Retailing Online 2007." It's a great report filled with statistics from some of the most sophisticated marketers out there. One section really caught my attention: the comparison of email from 2005 to 2006. In every category, the effectiveness and scope of email marketing improved. Among the findings:

• Open rates went up from 23 percent to 26 percent despite the increased use of image suppression by popular email clients.
• The percentage of retail customers who have opted into the retailers' lists went up from 45 percent to 55 percent--clearly customers are buying into the value of email.

Posted by Bill at 10:09 AM | Permalink | Comments (1)

A recent study by Datamonitor has found that email has finally surpassed the telephone as the preferred communications vehicle of choice. The same study also ranked instant messaging and the telephone as the most disruptive communication tools in the workplace.

It looks like email is going to be the best way for BtoB marketers to manage and build relationships for a long time to come.

Network World has a good overview of the study results here.

Posted by Bill at 9:18 AM | Permalink | Comments (0)

I’m often amazed at how much my younger son is influenced by television advertising. A colleague shared an article with me that further opened my eyes to the power of branding, particularly among young children. (You can read it here.)

A pediatric researcher from Stanford University ran a series of tests with children ages 3-5 to determine their taste preferences for food. The trick was that researchers presented the same food—only in different wrappers. The results:

• Seventy-seven percent of the kids said the same French fries from McDonald’s tasted better when they came from a McDonald’s bag instead of a plain one.
• Sixty-one percent of the kids said milk tasted better in a McDonald’s cup.
• Fifty-four percent said carrots tasted better in a McDonald's bag.

Posted by Bill at 11:44 AM | Permalink | Comments (0)

Google has made yet another acquisition (this is number 20 in 2007), and it's one of the biggest yet.

On Monday, Google announced it was buying out anti-spam company, Postini. Widely used by corporations, Postini is one of the three large anti-spam players in the marketplace. Analysts believe this acquisition will strengthen the enterprise anti-spam capabilities to better compete with Microsoft.

Analysts estimate that Postini's revenue in the $40 - $50 million range, which suggests that Google paid a high premium with its $625 million cash offer.

Personally, I think this acquisition is less about fighting spam and more about bolstering Google’s suite of office applications designed to compete with Microsoft Office.

Posted by Bill at 9:48 AM | Permalink | Comments (2)

More than three years after it became law in the U.K., nearly a third of retailers still don't comply with the EU Directive on Privacy and Electronic Communications, U.K. direct marketing firm CDMS has found.

The Europe-wide legislation, which governs email communications with private individuals, forbids companies from sending email marketing messages to recipients who have not explicitly opted in to receive them. It clearly spells out that offering someone the opportunity to opt out of receiving unsolicited messages (or pre-checking opt-in boxes) does not comply with the directive.

Repeating a similar study conducted in 2005, the CDMS examined the opt-in practices of 200 companies across 12 big consumer business sectors. It found that just 69 percent—only 3 percent more than last time—are complying with the legislation.

Although this increase is a positive step, it also means a significant percentage of U.K. companies are still putting their carefully built brands at risk. To have a successful email program you need permission. It's not only a matter of consideration; it is now also legally regulated.

To ward off potential future legal and public-relations woes, the CDMS urges non-compliant companies to begin implementing solid permission practices and focusing on recipient concerns over spam and privacy. You can read the article here.

Posted by Bill at 9:21 AM | Permalink | Comments (1)

The big news this weekend is Google's acquisition of DoubleClick for $3.1 billion--reportedly beating out Microsoft and Yahoo for one of the top online advertising providers. The media is abuzz with discussions on why Google paid so much (DoubleClick revenues are fuzzy, but reports put it somewhere between $150 million and $300 million per year) and what the acquisition means to the industry. I figured I'd throw in my two cents...

The ad banner space is far more mature than search so it's unlikely Google expects DoubleClick's business to grow at anywhere near the rate of Google's core business. From this, I think its acquisition of DoubleClick was a largely pre-emptive move to keep Microsoft and Yahoo from gaining ground in the online advertising space. (Yahoo, in particular, has a strong ad banner business.)

Google will likely push DoubleClick's ad system into a more self-help, middle-market focused offering like Google's own AdWords offers today. Meanwhile, on the enterprise side, I expect to see the two sales forces quickly align to cross sell large customers on both companies' advertising solutions. For marketers, this will mean a convenient one-stop shop for all forms of advertising.

I think this could play well for consumers. For example, Microsoft and Yahoo are going to have step up their investment in innovation and user-facing features in order to offset Google's growing lead on the advertising space. I expect Microsoft and Yahoo to focus more on their own content and user-centered features in an effort to counteract Google's success in monetizing the traffic and content of other sites through search and ad banners. In other words, if Microsoft and Yahoo can't buy any more billboards on the side of the road, they will build more roads.

Additionally, both DoubleClick and, particularly, Google, have some impressive technology for driving relevance in advertising. The combination of the two companies' technologies promises consumers increasingly relevant advertising across the Internet.

However, it is worth noting that some sources are saying that this merger gives Google almost 80 percent of all the advertising on the Internet. If this proves to be true, you can bet their rivals and the federal government will not sit by and let these companies combine--not without a fight.

All of this reminds me why I love being in this industry. It's never boring. There are endless opportunities for those companies that can take advantage of the change to drive innovative marketing campaigns and pull ahead of their competitors.

Posted by Bill at 9:08 PM | Permalink | Comments (0)

Contrary to concerns that slowing growth could indicate a declining interest in email, a new Forrester Research report concludes that email is still going strong and has merely steadied with maturity.

"Email Marketing Comes of Age," by analyst Shar VanBoskirk, reveals nearly universal penetration by online consumers and marketers, stable click rates and continued consumer engagement as marketers take on sophisticated, relevant tactics.

In fact, email is one of a marketer's most valuable channels, the report finds.

Email customers spend more online than their non-email counterparts, buy on impulse in response to email promotions and are more likely to tell others about the email promotions they have received. The report urges marketers to turn more email customers into email lovers by undertaking tactics tuned to each customer's specific behaviors. You can read more about Forrester's findings and its predictions for 2007 in this DM News article.

Posted by Bill at 9:12 AM | Permalink | Comments (0)

For years, BtoB email marketing has lived in the shadow of its larger sibling, BtoC email marketing. The volumes traditionally have been smaller, and the sales process usually more complex, so it can be tough to measure an ROI directly from an email.

One of the best BtoB marketing companies out there is Texas Instruments. MarketingSherpa recently did a great case study of how TI consolidated its databases and centralized its global email marketing under the guidance of Email Marketing Manager Leona Green. We've had the privilege of working with Leona and her team for years, and MarketingSherpa did a great job capturing their challenges and successes.

With leaders like TI, I believe BtoB email marketing has the potential to become one of the "big new things" in online marketing in the coming years.

Posted by Bill at 9:43 AM | Permalink | Comments (1)

If you send email in the United Kingdom take note. In an effort to fight spam, the U.K. recently put new laws into effect that require companies to disclose sender information in their transactional and other commercial email messages.

Extending a law covering traditional business communications to include email, the UK Companies Act Amendments of 2006, which took effect January 1, require companies incorporated in Great Britain and overseas companies that operate in Great Britain to disclose the company name, where the company is registered, the registration number (if applicable) and registered address in their transactional emails. The amendments also require senders of non-transactional commercial messages, such as marketing messages or e-newsletters, to include the company name and a valid physical postal address in each message.

The new rules could prove challenging for the significant percentage of British companies still struggling to comply with the 2003 E.U. Directive on Privacy and Electronic Communications. While there is some ambiguity regarding exactly what's covered by the new regulations, the Email Sender and Provider Coalition is counseling in favor of including the required information for all email-based marketing and transactional material. You can read more in this BizReport article, and in this ESPC member briefing (PDF).

Posted by Bill at 7:24 AM | Permalink | Comments (0)

Newsflash: the new 2007 version of Microsoft's Outlook email tool no longer uses the engine in Internet Explorer to display HTML email. Instead, it uses the somewhat simpler HTML rendering engine built into Word 2007.

While increased security is most likely at the heart of Microsoft's switch, the Word HTML engine simply isn't as powerful as the one used by Internet Explorer. For example, Outlook 2007 will not display any embedded players even if security is turned off. Say goodbye to video email, Flash-based email and even animated GIFs. Even more disappointing is the lack of high-end Cascading Style Sheets (CSS) features like float and position, as well as the ability to fine-tune padding and margins in table cells. For a few more details, read the Campaign Monitor blog. For a full description, read this article by Microsoft.

I believe the impact on the world of email marketing will be minimal. The fact is, a huge subset of HTML emails do not use any of the features being removed. Additionally, Outlook 2007 is part of the Microsoft Office Suite and as such is not as widely used by consumers. According to MarketingSherpa's Email Marketing Benchmark Guide 2006, only 4 percent of consumers use Outlook. Most use AOL (20 percent), Yahoo! (19 percent), Outlook Express (15 percent), and Hotmail (12 percent).

Clearly, the BtoB world has a higher concentration of Outlook users, so it may be hit harder than BtoC. But it's noteworthy that, based on Silverpop's recent Email Creative That Works study, BtoB recipients tend to respond less well to fancy graphical email than do consumers. I suspect that BtoC emailers will not see a big change given the diversity of email tools their recipients already are using.

Bottom line, Outlook 2007's rendering engine is not a game-changing event for email marketers. Like the introduction of Gmail, it is something that requires attention, but I don't think we will see any big drops in response rates or recipient satisfaction as a result. And, looking on the bright side, if Microsoft is able to raise consumer confidence in HTML email, then we may see more consumers disabling image-blocking, which might even result in higher response rates...

There's always a silver lining <grin>.

Posted by Bill at 11:47 AM | Permalink | Comments (1)

Josh Baer, founder and CEO of Skylist, commented on my AOL unsub post and shared the URL of a site focused on the very issue I raised with Charles Stiles of AOL. It's a technical site, but it shows just how much thinking has gone into this great idea:

http://www.list-unsubscribe.com/

Posted by Bill at 6:13 PM | Permalink | Comments (0)

For those who haven't heard, the Direct Marketing Association recently released some pretty astounding numbers surrounding email. In its latest Power of Direct economic-impact study, the DMA reports that in 2005, email marketing returned an astonishing $57.25 for every dollar spent. The same study found that the ROI of non-email-related online marketing was $22.52, or less than half.

All told, advertisers spent $12 billion for non-email-related online marketing, but just $300 million for email. Or put another way, email provides more than twice the ROI of other Internet marketing channels, but gets only 2.5 percent of the investment. I suspect we'll see that percentage grow significantly over time as more companies begin to understand email's unique ability to cultivate customer loyalty and high ROI over the long-term. Thanks to Email Data Source CEO Bill McCloskey, who ponders this conundrum in his blog.

Posted by Bill at 9:18 AM | Permalink | Comments (0)

Spamhaus, a volunteer anti-spam organization based in the United Kingdom, is known in the email community as one of the toughest but most widely recognized spam fighters in the world. In a nutshell, it provides a daily list of IP addresses it believes belong to spammers. This list is downloaded by thousands of spam filter programs (including tools by companies like Microsoft) and, according to the Spamhaus site, protects 625 million email users against billions of spam emails a day.

The organization is unique for several reasons. First, you generally have to be a very bad emailer (e.g. spammer) to get on its block list. But, because the block list is so widely used, being listed can be devastating to an emailer's deliverability.

Second, the organization is based outside the United States and has been able to avoid a lot of lawsuits by U.S.-based emailers -- until now.

Earlier this year, one of the emailers on Spamhaus' block list filed a suit in Illinois claiming that Spamhaus unfairly blocked its emails. The court case escalated, and a judgment was entered against Spamhaus for $11.7 million. Claiming that the U.S. court had no jurisdiction over its activities, Spamhaus said it wouldn't pay. I thought this was the end of it, but the U.S. judge decided to take it a step further. The judge reportedly is now considering whether to issue an order for ICANN, the U.S.-based group charged with assigning domain names (e.g. www.spamhaus.org) to turn off Spamhaus' URL.

In the long run, the anti-spam implications of this aren't too significant. It would be easy enough for spam filters to simply download the block lists using IP addresses and avoid the need for a domain name. The larger issue at stake here is the ever-sensitive issue of whether the U.S controls the worldwide Internet traffic system. If this fact ends up allowing a U.S. judge to "punish" a company based outside the U.S., we could see some serious fracturing of the current Internet structure as non U.S.-based companies attempt to move their Internet management outside U.S. control.

Posted by Bill at 2:02 PM | Permalink | Comments (0)

I've just returned from a great trip to Europe. My primary reason for going was our London-based annual customer conference (more to come on that later), but I also used the opportunity to talk with marketers from a variety of countries.

A few quick observations:

• SMS is still an active discussion but, from a purely anecdotal observation, its momentum into the marketing world doesn't seem quite as furious as it was last year. It's clearly way ahead of the U.S., but most of the billboards and ads I saw featured Web URLs and relatively few SMS calls-to-action.
• It's popular to say Europe is X years behind or ahead of the U.S. in email marketing, but the more time I spend there, the less I think this comparison is appropriate. I saw some brilliant, sophisticated campaigns as well as some very basic stuff. I'm beginning to think that the sheer volume of companies in the U.S. may account for a larger number of emerging cutting-edge case studies, but that the actual percentage of sophisticated marketing within the two markets is probably about the same.
• We surveyed a few hundred marketers in the U.K. in connection with our conference, and I was pleasantly surprised at how large many of their lists are. Given the relatively smaller population of the U.K. compared to the U.S., many have amassed some impressive lists.
• Just as in the U.S., the conversations were largely the same wherever I went: deliverability, life-cycle marketing, Web analytics, integration, etc.
• The competitors are largely the same, but those who are perceived to be leaders and followers varies a lot between the U.S. and the European Union. I won't flatter any of my competitors by naming specific companies here <grin>.
• There are a surprising number of regional competitors in the E.U. -- both country-specific as well as pan-European. It will be interesting to see if they are able to penetrate the U.S. as successfully as the U.S. ESPs appear to have penetrated Europe.

Posted by Bill at 11:01 AM | Permalink | Comments (1)

Reader Dean Collins posted a comment on my recent entry about why email marketers love the "unsubscribe button." He wonders if perhaps too much is being made of the unsubscribe button, and asks why marketers view it as an improvement over an unsubscribe link in a message. Thanks for your comment, Dean. A few thoughts:

• The unsub button is always visible and is the same for every mailing, regardless of sender -- no more searching around to find the link at the bottom of the message.
• The unsub action will be a single click -- much easier than the clicking to open a Web page, confirming you really want to unsubscribe and then hitting submit. Some opt-outs are even more complex than this.
• The unsub button will only appear if the sender has a good reputation. ISPs will not endorse the old spammer trick of using an opt-out request to confirm the existence of a "live body" on the other end -- only authenticated senders with good reputations will be able to have this link activated. For end users, this means that the link will always work.

Posted by Bill at 3:25 PM | Permalink | Comments (0)

A colleague recently forwarded me the interesting results of a new email marketing survey conducted by Internet Retailer. Not surprisingly, the survey reveals that retail email continues to represent a great value proposition for marketers.

The survey was mailed in early August to subscribers of Internet Retailer magazine's e-newsletter, IRNewsLink. Of the more than 400 online retailers that responded, 73 percent said they spend 5 percent or less of their marketing budget on email marketing. Yet more than half said 6 percent or more of their sales come from email marketing, and more than 25 percent said they get more than 11 percent of their sales from email marketing.

Retail email marketers appear to be doing a good job with relevance as well, reporting strong overall open and click-through rates, and significantly higher conversion rates compared to a year ago. While nearly a third reported no change in email sales conversion rates this year compared to last, 20 percent said sales had improved by 5 percent, and 7 percent said sales had increased by more than 10 percent as a result of better email marketing.

Most respondents (57 percent) have opt-in lists of fewer than 50,000 names, although 10 percent have lists of more than 1 million names. Nearly all (92 percent) said they expected to increase the size of their opt-in lists within the next year. And nearly half of those said they planned to grow their lists by as much as 50 percent or more. They also anticipate conducting more frequent, but segmented, email campaigns. Judging by these results, online retailers have a lot to look forward to as they move their email marketing programs forward in the coming year.

Posted by Bill at 4:37 PM | Permalink | Comments (0)

I just read a great article by Rebecca Lieb for ClickZ about the new email "unsubscribe" button being tested by Microsoft. (See my previous blog entry.) In her article, Rebecca explores why email marketers, including myself, seem so happy about the proposed new feature.

What's so great about inviting recipients to bail from your list?

A lot of things, she finds out. By offering an "unsubscribe" button in place of a "report spam" button:

• Permission marketers no longer face being “guilty until proven innocent.” There's a big difference between unsubscribing from a list you’re no longer interested in being on and calling a sender a spammer. Unfortunately, current systems only allow for the latter. Even if a recipient loses interest in a newsletter, the marketer ends up getting labeled as a spammer.
• Email recipients drive a clear action that is all-but-guaranteed to work, rather than a vague complaint that forces them to "wait and see."
• ISPs get far, far better data with which to tune their spam filters.

Microsoft's "unsubscribe" button is still in the early stages, and the concept no doubt will undergo refinement by Microsoft and other ISPs in order to address issues that arise. For instance, I believe ISPs need to offer both an unsubscribe button (when the sender is legitimate) and a “report spam” button. Apparently, ISPs think two buttons will be confusing, but I think it’s inevitable that two buttons will be required. Giving recipients the choice will result in extremely accurate information for their spam filters and thus the most balanced solution for both recipients and marketers

In any event, the "unsubscribe" button is finally becoming a reality. It's an exciting development, and one that will benefit everyone.

Posted by Bill at 9:41 AM | Permalink | Comments (3)

My hat is off to Microsoft. The company is the first of the major ISPs to move toward offering a true "unsubscribe button" in place of the ubiquitous "spam button" (see my entry on this last year).

The idea has taken a while to see the light of day, and Microsoft's initial foray is a pilot program, but it's definitely progress no matter how you look at it.

Here's why this is important. The main characteristic that an ISP considers when deciding whether to block a sender's messages is the number of complaints it receives. Complaints almost universally are determined by the number of times ISP subscribers hit the spam button in their email programs. The problem is, recipients have discovered that pressing the spam button usually results in being removed from a list -- even lists they've subscribed to. As a result, ISP subscribers have started pressing the spam button for any message they don't want, even when they know the message isn't unsolicited (spam). By replacing the spam button, or adding a second button, subscribers can now be more specific about what they want done, and ISPs can get much more accurate information about which senders they really want to put on block lists.

Check out http://directmag.com/disciplines/email/microsoft_unsubscribe/ for a good article on Microsoft's recent pilot.

Posted by Bill at 9:05 AM | Permalink | Comments (0)

I was tremendously flattered to be selected for BtoB Magazine's Who's Who list in 2006. A reporter for the magazine, Carol Krol, interviewed me in advance, and asked why Silverpop hadn't followed the path of so many other ESPs and sell out to a larger company.

While we have received many solicitations to join the merger and acquisition activity in our space, I truly believe that we can offer the very best solution to our clients as an independent company.

As a small, independent company, we do only one thing--email marketing. We have nothing else to fall back on, and we are passionate about being the best at what we do. The fact is, nearly every leader in cutting-edge markets started out as a small upstart surrounded by huge incumbents. Whether it was Intel, Cisco or Microsoft, these companies ultimately became giants themselves because they focused on one set of important products and had no choice but to be world-class with them. While most main-frame companies were trying to make their own small computers, IBM made the radical decision to partner with Intel and Microsoft to offer a joint solution based around best-in-class components. That decision created the entire PC industry as we know it, and nearly everyone who reads this blog has that decision to thank for their jobs today.

Most of the M&A activity in our space has been from direct and database marketing firms. For those of you who have been in this industry a while, you will recall that most of these companies had acquired or invested in email marketing companies four to five years ago. Those acquisitions did not work out, and the email units subsequently were shut down. It's possible that things are different this time around, but it's not a bet I think our clients want us to make. The fact is that we share clients with many database marketing firms (a few of which have acquired our competitors), and integration is very achievable, regardless of whether they own us or we remain independent. In fact, our recent partnership with Abacus is a testament to the quality of integration that can be achieved between partners. Our shared clients benefit from the combination of two fully integrated best-in-class companies, yet they retain the ability the mix and match different vendors in the future.

When it comes to email, Web analytics, consumer data and database management, one size does not fit all.

Posted by Bill at 9:33 AM | Permalink | Comments (0)