MarketingMonitor: 14 March 2002, Vol. II, Issue 8

March 14 Issue, 2002 Vol. II, Issue 8
Please forward this issue WITHOUT cutting. Thanks!

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1) Intro

2) News: Corporate hard drives get a Spring Clean and BT get
serious about Broadband

3) Feature: The Future of Email Marketing

4) Info: About the publisher

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INTRO
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INTRO

Email marketing is definitely on the rise so what's the appeal? This
issue looks at the attractions of the over-crowded inbox and breaks
down the confusion that surrounds the legalities and etiquette of
email marketing.

In news, Ford gets it's act together and gets tough on email nasties.
Plus BT shows signs of ADSL life as wholesale broadband prices are
slashed to get the market moving.

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NEWS
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* Grease Monkeys Clean Up

On Tuesday last week, management at car manufacturer Ford told
workers that it was time to come clean. Working towards a smut-free
workplace, managers have given workers two weeks to delete any
filth that may have 'collected' on their computers. In theory,
not the most evil idea spawned by corporate management, but as
news site Silicon.com pointed out, in practice the line between
virtue and lasciviency may not be so easy to draw. One person's
jovial office banter might be another's moral outrage.

Ford were not the only ones looking under the privacy bonnet.
Watchdog Privacy International announced the winners of their
'Big Brother Awards'. Norwich Union beat Internet Watch
Foundation to win the 'Most Invasive Company' award for genetic
tests used on life assurance policy candidates. Whatever next?
Office managers spying on their staff with hidden webcams.
Hang on- what's that up there in the ceiling?

http://www.theregister.co.uk/content/6/24314.html
http://www.silicon.com/a51830

* Kickstart for Broadbrand Britain

A collective sigh of 'better late than never' was breathed by
the ISP industry as BT's finally slashed their wholesale Broadband
access charges with prices falling from £25.00 to £14.75. ISPs
have responded by dropping their retail prices in the drive to
create Broadband Britain.

With ISPs sales lines glowing red hot and rumours of lengthy
waits at BT HQ for extra ADSL capacity, it might yet turn out
to be a poison pill. The fact that BT's main website has been
down for 3 days, doesn't help in-still confidence either.

Still, cheaper, faster access is no bad thing. With BT Openworld's
retail prices down to £29.99/month for home users and some smaller
ISPs even cheaper (our mates at Freedom2Surf at £22.50/month)
it can't be a bad thing. BT's clearly taking the prospect of
high-speed access seriously with the purchase of dotmusic,
whilst broadband content providers everywhere will be dusting
off their business plans.

http://www.silicon.com/a51813
http://www.freedom2surf.net
http://news.bbc.co.uk/hi/english/business/newsid_1841000/1841698.stm

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FEATURE: THE FUTURE OF EMAIL MARKETING
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INTRODUCTION

Like many people in this industry, I get a lot of email -
around 200 per day. Of that, around half of them are work-related,
several are emails I actually requested to receive and then there
are a whole bunch of 'urgent' proposals to provide me with billions
of sales leads, millions of pounds for just a few hours work or
the chance to add a few inches below the waist, lose a few from
above the waist or check out what young farm girls like to do.
Needless to say, the delete button is a trusty old friend.

It's a common experience and one that fills most e-marketing
types with caution - people have been writing about (as well
as sending) spam since they started writing about the internet.
Most intelligent marketers know what is and what isn't spam and
understand how permission-based marketing works. But it's not
always about the reality, but the perception. If you don't get
your campaign right, people can be quick to perceive your email
as spam and, by then, there's almost no chance of rescuing that
contact or lead.

MASS MAIL MAYHEM

According to Charles Ping from the Digital Marketing Association,
speaking at a recent email marketing event, 200bn emails will
be sent to US marketers by 2004, with consumers receiving over
1600 commercial emails per year by 2005. Given those figures,
Ping says that 39% of people already think that they receive
too many emails.

Of course, during this time of slashed advertising and marketing
budgets and where PR is something other people do, email marketing
is regularly seen as the cheap alternative. Its similarities to
the tried and tested formula of direct mail only add to the
attractiveness of an email campaign. However, Ping quoted US
figures from Forrester, which suggest that not all is as it seems.

Acquisition CPT Click-through Conversion Cost per sale
Email to rented list $150 0.4% 3% $1250
Banner ads $10 0.5% 3% $67
Direct mail to rented list $875 N/A 1.2% $73
Email to house list $5 15% 3.7% $1
Direct mail to house list $761 N/A 3.9% $20

IT'S MY INBOX

The figures themselves provide a note of caution, but Ping also added
that the effectiveness of an email campaign may well lie in the
relationship with the end user, otherwise response rates drop
dramatically. More often than not, such a relationship with the
customer is unlikely to be effected from an initial email, so a
dialogue is essential, which costs more money and relies on the
marketer's ability to foster trust.

Despite the ease with which emails can be deleted, in contrast to
direct mail, Jon Davie, editor of Lastminute.com's UK email newsletter,
said at the same event that users tend to see their email in-boxes as
even more personal than their doormat - it may not be logical, but
clearly, the directness of email correspondence provides a far more
emotional response from users than direct mail.

In addition, Ping suggested that traditional marketing has had
far more time to develop its modus operandi and consumer
attitudes to direct mail are more fixed and controlled. Consumer
attitudes to email marketing, however, are not fixed and are
constantly shifting - in short, there is no guarantee that an
email marketing campaign will be well received, whatever current
research says. Working on such shifting sands, the e-marketer has
to adopt to change even more than those working in other areas of
internet advertising and marketing, and with so much negative
press about spam and uncertainty about what constitutes it,
recipients can have a negative view of any commercial email,
whether unsolicited or not.

OPT IN vs. OPT OUT

Davie took this a step further and suggested that, even if a user
has opted-in, it's wrong for marketers to believe that this gives
them carte blanche to send a commercial email as and when they wish
- "You can't invade my in-box, even if I give you permission to
do so."

Stephen Groom, at legal firm Osborne Clark, identified what
legislation has been passed on this subject. While there is still
no legally recognised definition of unsolicited email, the Financial
Services and Markets Act 2000 defines "solicited" as: initiated by
the recipient of the communication or made in response to an express
request from the recipient.

Beyond that, however, legislation becomes much more confusing -
the current situation suggests that the UK will have an opt-in
policy, despite previous indications that favoured an opt-out
policy. Currently, Austria, Denmark, Finland, Germany and Italy
have joined the opt-in crowd, but little else has been made clear.
While the DMA have professed a preference for an opt-in policy,
Ping emphasised the importance of opt-in at the event, but Groom
questioned whether either policy could ultimately be enforced.

Groom's best suggestion was for marketers to use their company's
data protection officer, if one is available, or check out the
DMA Code of Practice for Electronic Commerce and make sure records
are kept.

This effectively means that marketers get one free go at an unsolicited
campaign, which, given a built-in opt-out clause for future campaigns
(an advised, if not binding, practice), might result in an in-house
prospect database. But unless the call to action is a hugely compelling
one, most databases need to be grown and nurtured and that first
unsolicited email can damage that potential for good.

According to Ping, research suggests that double opt-in is still
the preferred choice for consumers, with the rate of unsubscribes
fastest for opt-out and slowest for opt-in. However, the frequency
of emails also factor highly into the rate of unsubscribes -
while a good long-term relationship is desired, it has to be
practiced with patience and caution.

MAKING 1-2-1 MARKETING WORK

In addition, making too much emphasis on the one-to-one nature
of email could prove damaging, according to Ping. While generally
agreed to be the holy grail of marketing, "The more you make your
message appear more 1-2-1, the more you intrude and risk alienation."
At the same time, Lastminute.com's Davie argues that giving users
exactly what they want can prove restrictive - a big problem for
e-commerce is that the user often isn't aware of other products
available, so providing the right promotions, products or services
often comes down to the marketer's judgement and the ability to
nurture a long-term relationship.

Which all goes to show how appealing and confusing email marketing
can be, especially given the recent advertising slump, changing
consumer attitudes and an almost total lack of agreement on standards
and legislation. Ultimately, the future of email marketing is
likely to be governed by those with the best ideas and the greatest
compliance with current best practices. Or by that delete button.

Digital Marketing Association http://www.dma.org.uk
Osborne Clark: http://www.osborneclarke.com

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