Opt-in Email Marketing

[JohnG]

As he marched into the valley of death ...

The sad part about this whole debate:

* No one seems to have any accurate numbers either as to the costs of spam or the money made from spam.

Spam costs vary depending on how you calculate the numbers.

When California passed it's anti-spam law last fall, as part of the preamble to the legislation it included a reference to Ferris Research Inc. suggesting the number was in excess of 10 billion dollars in the United States alone.

(To read the full law, including the relevant preambleuse this and

Recently, the DMA published a study last month suggesting non-fraudulent unsolicited commercial email was worth over 11 billion in sales last year in the United States.

Personally I have a big question about the DMA study. The total study size was 1,000 and the numbers are extrapolations. Also, the study does not include the negative costs to marketers in spamming.

According to the study e-marketers get better results from sending out good spam (or as the DMA now calls it non-fraudulent unsolicited commercial email) than from sending out solicited commercial email.

"What? Not possible, there must be something wrong." Well, I can't vouch for the study.

To read the news release in DM News, use this.

From the news release here are the salient facts:

* 1,000 people were surveyed.

* The surveys respondents reported spending more per order in response to unsolicited commercial emails than solicited commercial emails.

* Based on the survey results, the DMA estimates non-fraudulent unsolicited commercial email is worth 11.7 Billion in online sales.

In October, 2003 the Pew & American Life Internet Project released the results of a major study titled Spam - How it is hurting email and degrading life on the Internet

In this survey, 2,200 respondents were surveyed. Out of this group only 7% reported buying anything from sites advertised in unsolicited commercial email. Apparently the percentage was too small to give further results. This survey was accurate within +/- 2.3%.

For the details read Some emailers pursue offers from unsolicited email.

Even if I take the DMA numbers at face value, based on the Ferris Report, it looks like the whole exercise is close to, if not a zero sum game.

Meaning, even though the individual spammer may make money, the total cost to the online community equals or outweighs the individual income and this in part explains why spammers are so vilified.

* Part of the problem is people can't agree on a definition. The big trade associations like the DMA have taken the position spam is dishonest unsolicited commercial email. The grass roots argue spam is unsolicited bulk email, with the most extreme position being spam is any email I receive which I did not request.

This debate on definitions is reflected in this discussion.

What is significant? On March 9th, Yahoo!, Earthlink, Microsoft and AOL filed suit. To read the actual court documents use this.

(Look under spam litigation to see the actual court documents. One thing of note is bringing the claims against John Does and then using the court process to ferret out the actual defendants.)

Okay common knowledge given the pr campaign.

On March 10th, the FTC issued its call for comment on the Spam Regs and the various reports it has to file with Congress under the Act. To read the press release and related documents, use this

On March 11, 2004 BtoBonline.com reported that some of the majors were placing their email marketing campaigns on hold under the headline ongoing spam concerns hamper e-marketing efforts

The story was subsequently picked up on March 12, 2004 by Marketing Wonk under the headline Big Brands Avoiding Email Marketing For Now.

Does this mean the majors are becoming concerned about the illegality of opt-out email marketing, as the Internet access services have:

* the right to establish access use policies prohibiting use of their systems to transmit, route or deliver unsolicited bulk email to subscribers; and,

* the ability to protect their interests, if they can show damages arising from violations of their access use policies, through civil action under the Federal Computer Crime & Abuse Act (and similar State laws)?

The stories in BtoB and Marketing Wonk merely reported the decision, but it will be interesting to see how this develops.

This development may also be important for email marketers with "opt-in lists," small, large or huge, either unconfirmed or confirmed, who do not have affirmative consent (there being a difference between the marketers understanding of opt-in and the definition of affirmative consent).

The bottom line?

Email marketing, if done properly can be an integral part of your overall marketing efforts.

(For those who are interested, the Internet Engineering Task Force published a protocol in April 2001, number 3098, titled "How to Advertise Responsibly Using E-Mail and Newsgroups or - how NOT to $$$$$ MAKE ENEMIES FAST! $$$$$ T. Gavin, D. Eastlake 3rd, S. Hambridge [ April 2001 ]". The link is an ftp link. Worth the read as a good starting point.)

At the same time, spamming can not be part of your efforts. Even if you can make significant money, the costs to the overall community and the damage to your reputation outweigh the benefits, unless you like living as an outlaw. Then get used to being hunted and pursued.

For email marketers who reside within the US or who market into the US and rely heavily on email marketing for their bread and butter, as well as email service providers, internet access providers and consumers, you want to review the FTC's call for comment and file comment to ensure your interests are heard.

You can find the FTC's call here.

Excuse the pitch about making your voice heard. Debates like this have value, but telling your stories to the regulatory agencies have far greater significance.

Especially since the FTC is not only calling for comment on proposed areas of regulation, but also on the various reports the FTC has to file with Congress under the Act. So, if you have a horror story to tell about how the level of spam in your mail box has gone up and why you want the United States to go to an opt-in law, (even if you know passing a law will not make a big difference), then now is the time to make your voice heard.

(Personally, I am neutral on the issue - I am simply urging people to make their voice heard.)

Trusting this helps,

Kind regards,

John Glube
Toronto, Canada

[John Scott]

Very informative post, John.

People have made sales from email marketing, but email addresses are NOT free. Sending them isn't free. Buying the lists isn't free. A legit opt-in list can cost more than $2 per email addy.

PPC is cheaper and more effective.

[thebassman]

Excellent post, JohnG.

[JohnG]

Originally Posted by JohnScott

Very informative post, John.

People have made sales from email marketing, but email addresses are NOT free. Sending them isn't free. Buying the lists isn't free. A legit opt-in list can cost more than $2 per email addy.

PPC is cheaper and more effective.

John,

I am not certain about the dollar value you quote for email addresses, unless you are speaking of the cost per email addy to acquire a customer as opposed to a prospect.

It is possible to create a large legitimate opt-in mailing list (I prefer the word affirmative consent) without spending any significant amounts per email addy.

My own view is all email leads are junk (actually I am paraphrasing someone else) and the only value comes from the relationship you create with the potential customer in getting your prospect to treat you as her trusted advisor, so that she invites you into her home metaphorically speaking and asks for your guidance.

(For more on the correct approach people will want to read the Amazing List Machine by Paul Myers and Co-Reg-List-Building-Secrets by Ed Thorpe. Yes, those are affiliate links, although I happen to own and rely upon the guidance in both products.)

Of course, if you factor in your time, in creating and testing your follow up messages, etc - work on your marketing messages, etc - and then break it out to those who actually purchase something from you - the number may come close to the dollar figure you speak off.

I do understand the logic of your position. Some studies suggest the most cost effective method of customer acquisition is through search engine traffic, which is why so much emphasis is being placed on this method of marketing.

However, one should not discount the value of email marketing. By pulling targeted traffic to your site, through search engine listings or pay per click campaigns and should the visitor not buy, offering her the option of signing up to your mailing list (the usual route on a sales page being the free course, or gaining access to a chapter of the e-book depending on the product, etc.) can be an effective method of increasing sales.

Kind regards,

John

P.S. Thanks for your kind words bassman.

John Glube
Toronto, Canada

[John Scott]

It is possible to create a large legitimate opt-in mailing list (I prefer the word affirmative consent) without spending any significant amounts per email addy.

I wasn't talking about creating a opt in list. I was talking about buying an opt in list.

I would think that creating an opt in list would be even more expensive.

[RonHollingsworth]

Wow..that puts everything in perspective.

[JohnG]

Originally Posted by JohnScott

I wasn't talking about creating a opt in list. I was talking about buying an opt in list.

I would think that creating an opt in list would be even more expensive.

John,

Hmm ... cheaper.

I can go out today and for $1,000 US have a targeted list created for me in the how to make money online arena of 100,000 email addy's in full compliance with the affirmative consent requirements under the Act.

(If you would like the link to the site, I can dig it out and post it.)

Of course, on top of this cost, you then need to add in the costs of using third party service (s) to do the mailings for you - which will run you anywhere from $50 to $100 US a month - depending on the third party service (s) you use.

For a variety of reasons, I don't recommend people do the mailings from their own web host, unless you are technically inclined and willing to put the time and effort into properly configuring your system to meet the requirements of the various internet access services.

On top of this we need to add the cost for the person's time in writing and testing the various e-mail messages you will send to this list.

Based on studies, etc. there will still be between 25 to 35% of the recipients who have not opted out and are willing to continue to receive email from me by the end of a year.

This is why I recommend to people The Amazing List Machine by Paul Myers and Ed Thorpe's work Co-Reg-List-Building-Secrets, two marketers who to use the expression "have been there and done that" on the email marketing side.

(Having said this, I concede there are issues with email marketing, especially on the delivery side - although there are a number of solutions - for more on this people will want to read this article.)

Even with the add on costs I have enumerated, you are still much lower than $2 US per email addy.

Now, if you were talking about cost per customer acquisition, as I said above, I can clearly see the logic in your position.

Don't mean to disagree, especially for someone new to this forum. However, I am sure you will agree, focused discussion, with both sides bringing forward their presumptions can help to give all a full understanding of the underlying issues.

Of course, I could be all wet - hey, it would not be the first time.

Kind regards,

John

P.S. Ron - glad to help elucidate the fuzification.

John Glube
Toronto, Canada

[JohnG]

As a footnote to this whole discussion ... here in Canuck land (we are still waiting for Industry Canada to unveil it's proposed course of action - after two years of study - although at least we don't have the major trade associations promoting opt-out email marketing - thank goodness for small mercies) the spam tide continues to rise - according to a recent report published earlier today in the Globe and Mail (the Canuk equivalent to the New York Times) Spam tide continues to grow, survey discovers. Gee - who would have thunk it.

And in the United States, on 27,02.04 eMarketer reported:

"Bigfoot Interactive reports that 94% of US adults who have received a permission-based e-mail or who have subscribed to one in the past three months have made a purchase from the retailer."

To read the full article use this. The report produced some interesting findings.

John Glube
Toronto, Canada

[maxim]

at the end of the day with all that has been said, it would be naive to say it doesnt work period. Think about how many adverts youve seen on TV ands thought to yourself that was rubbish or christ there is no way that advert can make people buy the product, but nevertheless the advert seems to be there in every brake every day for a month or even longer!
advertising is so tricky there is no way it can be sumed up on one forum or a million forums in fact. There is just too many facets to this, too many factors to consider. But one of the most important things is to never just rule something out based on your moral evaluation of it, johnscott you wouldnt use spam and nor would I, which is one of the reasons I didnt like the adult industry for the 2 years I was there I found it too cut throat ruthless and simpy dishonourable in general. The first words you would hear in every sentence from paysite owners/operator were about how many e-mail they had sent out that day but there sure as hell wernt all millionaires and they were sending out big numbers let me assure u of that. I guarantee like someone sad before opt in list are often far from opt in anymore and even if they were I still wouldnt use them. It is interesting to to read that high numbers of people are buying from spam companies but that is only testiment to the now prolific use of e-mail on a global scale. what I mean is that I beleive that its relativly new users (who are getting online all over the world in their millions) who may be taken in by the scammers, i think give it 5 years and the rate of new users will slow. People will be more experienced and wont just buy from every tom dick or ferret, but then again people still buy from door to dorr salemen so you never know. human are a strange breed.

max

[John Scott]

Originally Posted by ferret77

I think spam works very well actually

why do you think you receive so much of it

Do you read your spam? Have you ever bought anything from spam?

Like the majority of Internet users, I neither read spam nor do I buy from companies who spam me.

[ferret77]

just becasue you don't buy it doesn't prove anything, fact is people do buy stuff and as long as they do people will send sapm

[maxim]

exactly john you are in the majority and so are most others who frequent this forum and are also an experienced web user. Unfortunatly the minortity may not be as small as we think. recently I had to give up my company e-mail adress because each day I was being swamped with upto 200 hundred messages, however never read or replied to any of them. it is cleary idiscriminate use of an advertising technique now I am forced to use hotmail. Nightmare huh...

[maxim]

I hate posting after ferret! i feel like I am some how associated with him.

[John Scott]

Originally Posted by ferret77

just becasue you don't buy it doesn't prove anything, fact is people do buy stuff and as long as they do people will send sapm

Basic marketing theory here. If consumers are being exposed to too much advertising, they simply do not respond to it any more. If people only got one or two spam per week, they might be effective. But since people are inundated with it, it loses its effectiveness.

As spam continues it increase, its effectiveness will continue to decrease.

[thebassman]

Originally Posted by JohnScott

Basic marketing theory here. If consumers are being exposed to too much advertising, they simply do not respond to it any more. If people only got one or two spam per week, they might be effective. But since people are inundated with it, it loses its effectiveness.

As spam continues it increase, its effectiveness will continue to decrease.

Exactly. In theory, that should mean, after a while, people will realize that, and it will slowly start to disappear.

[maxim]

exactly what i said.

[irmco]

Where can I obtain Academically accredited education in e-mail, direct marketing?

[JohnG]

Originally Posted by ferret77

I think spam works very well actually

why do you think you receive so much of it

I have sneaking feeling ferret is taking this agnostic position to see how aggravated he can get the rest of the community, knowing full well the prevailing attitude towards spam.

My response is two fold:

* Any self respecting marketer, knowing the implications of spamming would not support or advocate the use of unsolicited bulk email.

* If I threaten and ultimately destroy the very infrastructure which allows everyone else to make money, how does my greed enhance the greater good?

However, the reality is the business ethic is often lost in the pursuit of short term gain. As John Scott aptly points out:

Originally Posted by JohnScott

Basic marketing theory here. If consumers are being exposed to too much advertising, they simply do not respond to it any more. If people only got one or two spam per week, they might be effective. But since people are inundated with it, it loses its effectiveness.

As spam continues it increase, its effectiveness will continue to decrease.

In the meantime, with the threat to the infrastructure having reached near crisis proportions, unless the tide is reversed ultimately email will loose its effectiveness as a marketing medium.

Also, the infrastructure needs to be changed to ensure the basic security requirements are met for safe and secure email communication.

(There is a looming issue on the lack of encryption and commercially available software which can troll the millions of messages sent daily looking for certain key words.)

Although the technical solutions will come from the commercial sector, as I watch things play out, my conclusions are:

* A fundamental change in commercial ethos is required if we are going to be successful in dealing with the question of spam. This change in ethos will either occur voluntarily or be forced upon the commercial sector by Government.

* To date, the commercial sector has not shown the willingness to make the required changes. This stems in large part from the DMA's refusal to take a principled stand on the issue.

As long as the DMA refuses to come out and say, "though shall not send unsolicited bulk email," this allows people like ferret to argue, hey - if I can make money at it, why not? - even though every one knows the huge costs involved.

In turn, this cast's doubt on the legitimacy of any solution involving the DMA, its members or associates, which includes AOL, Microsoft, Earthlink and Yahoo! surrounding email.

This explains in part why the Can Spam Act of 2003 has been ridiculed by many in the grass roots and why any solution proposed by AOL, Microsoft, Earthlink or Yahoo! is not trusted unless it is run through the Internet Engineering Task Force (IETF.)

Meaning ultimately we come back to the beginning. As the American military moves to a "netcentric command and control system" the American Department of Defence will have to tear apart the existing structures and piece things back together again over the next few years, so that to paraphrase one military commander "the damn stuff actually works."

The march towards the next level of the Internet by the United States military was ordered by the Chief of Staff in June 2003 for full implementation by First quarter 2008.

(For more on this, you will want to read DARPA takes aim at IT sacred cows, Next-Generation Internet Protocol to Enable Net-Centric Operations, and Briefing on New Defense Department Internet Protocol.)

As a side bar, this may explain in part why the IT industry is moving support positions for existing internet structures offshore. Within the next 4 to 6 years, the whole "thing" will change again, making existing structures redundant.

Trusting these comments are of some assistance.

Kind regards,

John Glube
Toronto, Canada

[John Scott]

I love your posts, John. Very well thought out.

[thebassman]

As do I...