Legal and Deliverable

As the popular media chatters about Can Spam not making e-mail inboxes any thinner, e-mail marketers are telling a different story. Can Spam has turned their industry on its ear. But that’s not their only difficulty.

E-marketers’ central burning problem is still how to get their e-mail delivered.

The law that went into effect on Jan. 1 has compelled companies to clean up their practices so that their e-mail is both legal and deliverable. One firm that was already doing this is TheStreet.com Inc.

About a year ago, Ryan Scott, director of e-mail marketing at TheStreet.com, saw that deliverability was just going to get tougher, and revamped his e-mail program to be sure his best practices were pristine and he had the best possible shot at delivering each e-mail (see sidebar, page 32).

At the turn of the year, the only thing Scott had to do to comply with Can Spam was insert TheStreet.com’s physical address in each subscription. In every other way, the publisher already complied. (For a description of Can Spam’s provisions, see “A Brief Respite,” Direct, January, page 1.)

TheStreet.com offers 16 subscription e-mail products on the stock market that range in price from approximately $400 to $1,000 per subscription. The publisher has about a million e-mail subscribers.

Jim Kramer’s Action Alerts Plus, for example, blasts to subscribers up to 10 times a day. Kramer is read avidly — he invests $3 million of his own money through his trades that he writes about in his Alerts, according to Scott.

“If subscribers don’t get Kramer’s communication, or it’s 10 minutes late, they might miss out on a move in the market,” Scott says. “We hear from our subscribers immediately and it can cost us tons of money if something doesn’t go through.”

How big is the overall deliverability problem? Some 20% of commercial e-mail is false-positive, according to Return Path, which analyzed more than 10,000 campaigns sent by more than 100 mailers.

False-positives are messages filtered out as spam by Internet service providers, such as America Online, even though they are legitimate and perfectly legal commercial e-mail that was probably expected by the recipient.

This is not a comforting statistic. “When you’re a direct mailer, you have all the cards,” says Matt Blumberg, CEO of Return Path, which offers a service that helps get marketing e-mail delivered. “E-mailers feel they have to evaluate everything. They are worried about control.”

It is especially discomfiting when you realize that the study looked at companies’ house files — comprised of people who gave companies permission to mail. “Even 2% is unacceptable with opt-in e-mail,” says Quinn Jalli, director of ISP relations and privacy at Digital Impact, an e-mail marketing firm.

One way senders are trying wrest more control is to focus more carefully on keeping their customer files clean. They ask the customer what they desire and encourage them to update their profiles to be sure that everyone who gets mail wants it

J.P. Morgan Chase & Co., for example, offers a preference page for its Chase bank customers that says at the top: “You may select, change, or unsubscribe from the categories of e-mail communications you wish to receive at any time.” One category with boxes to check asks which Chase card member communications the customer wants, such as “servicing my Chase credit card account” and “Special offers for card members.” Other categories ask which special interests they have and the other financial services they are interested in.

“It’s becoming a much more consumer-controlled medium,” says Michael Della Penna, chief marketing officer at e-mail marketing firm Bigfoot Interactive.

Chase’s preferences page also features a space at the top for the customer to type in their new e-mail address.

Constantly attempting to collect updated e-mail addresses is vital to list hygiene, Della Penna says. Some 11% of customers changed e-mail providers in the last six months, according to the recent Bigfoot ISP-spam survey. And 14% of ISP customers are considering switching providers. “That’s a quarter of all e-mail addresses that are churning,” he notes.

Some marketers swear by opt in and only opt in. Take IndeCorp., for instance. The Independent Hotel Corp. and parent company of three hotel chains sends out 25 e-mail campaigns a month to its nearly 100,000 consumer and business customers.

After hotel guests provide their e-mails addresses at registration, IndeCorp. sends them an introductory message, inviting them to click and register if they wish to receive an IndeCorp. e-newsletter.

“We’d rather be talking to people who want to hear from us, instead of making people mad at us,” says Michelle Woodley, vice president of marketing and distribution services for the Chicago-based firm. “We don’t assume that anybody wants to receive our e-mail address.”

Woodley’s hard line on opt in has even caused debate at IndeCorp., but she has stuck to her convictions. “We could do it as an opt out and still be compliant with Can Spam, but that would not be representative of our brands and our hotels — to be customer- and service-oriented.”

IndeCorp. started its e-mail program a year ago and was compliant with Can Spam from the start, according to Woodley.

The response rate to the registration e-mail is 15%. The B-to-C e-newsletters have an open rate of up to 50%, and a clickthrough rate of 10 to 18%, she said. And Woodley is confident enough in her methods to begin cross-selling across brands to her e-newsletter subscribers this spring.

Certain players are so married to strict permission standards that they question e-mail rentals.

“Gone are the days of renting your lists,” says Tricia Robinson, vice president of marketing communications at e-mail marketing firm Socketware, which sells an e-mail delivery product to clients sending exclusively retention e-mail, and provides services to IndeCorp.

“I believe [marketers] should stop renting e-mail,” she adds. “The relationship isn’t with a third party anymore, it’s between the sender and the recipient.”

Not true, says Jay Schwedelson, corporate vice president of Boca Raton, FL list firm Worldata.

“The permission list rental environment exists when a recipient says ‘I would like to receive special third-party offers.’ The only files that need to be guarded are those for which no permission has been established and the names have not been collected properly.”

Della Penna agrees. “Lists where people say they want to receive a third-party offer for things they are interested in still work. List rentals for automotive companies and others are still getting 5% to 7% response rates.”

The most dramatic change post-Can Spam is that files that a gray market of lists built by harvesting are now headed off the market — or should be, experts say. Harvesting is illegal under Can Spam.

For lists built legally, “those list owners who have not yet made their lists available are far more tentative about doing so now,” Schwedelson adds. But lists already on the market are not being removed.

“Lists generate a lot of revenue and it’s fairly easy for legitimate list owners to comply with Can Spam, because they have been following many of these practices already,” he says.

What is happening in bringing lists up to standard is taking a lot more work.

E-mailers have taken a page from direct mailers’ book by demanding a customer-suppression file along with the e-mail file they are renting, in an effort to send mail only to those who want it. (A suppression file is a group of postal or e-mail addresses of individuals that the list renter does not want to receive promotions.)

“Before Jan. 1, less than 10% of e-mail list rental orders came over with a suppression file from the mailer,” Schwedelson says. “Now, probably 75% or more are providing some sort of suppression data.”

Another trend is that selections are becoming more sophisticated, e-mail service providers say. If you are Chrysler looking to rent a third-party list from Edmunds.com to sell your minivan, you would look for a selection identifying folks who said they intended to purchase a minivan in the next six months.

Why? “Because those lists perform,” Della Penna says.

Of course, the foolproof way for e-mail marketers to get their mail delivered to inboxes is if the ISPs recognize it as legitimate.

And the best way to do that would be for ISPs to devise standard guidelines for doing so.

“On one end of the spectrum you have Roadrunner that requires double opt-in, and at the other end you have ISPs that don’t offer white listing, like Earthlink,” Robinson says.

A single standard seems unlikely anytime soon, but at press time, the ISPs that handle the majority of the e-mail traffic in the nation — Microsoft’s MSN, Yahoo!, America Online and Earthlink, announced they were meeting at a spam summit in mid-January.

E-mail marketing vendors, who are on the front lines of trying to get the e-mail through, say ISPs have become much more responsive in the last year to resolving problems and helping marketers stay on ISPs’ white lists, or at least on their good sides.

White lists are expected to evolve toward authentication and reputation. AOL has already tweaked its white list in that manner.

“It will be based on ‘Can I identify who this e-mail is coming from and are they good guys or bad guys?’” Blumberg notes.

Even better, experts say, would be uniform bounce-back guidelines that would use standard codes to tell e-mail marketers why an e-mail was bouncing back to them.

“As e-mailers we want to be held accountable for e-mail bounces, but we want the ISPs to be held accountable for a single set of bounce standards,” says Ben Isaacson, privacy and compliance leader at database firm Experian.

How TheStreet.com Delivers

TheStreet.com, a publisher of subscription e-mail products about the stock market, follows best practices to ensure deliverability.

TheStreet.com:

• Maintains relationships with ISPs and follows their white-listing policies.
• Provides IP addresses to the Internet service providers.
• Insists that subscribers add TheStreet.com’s ‘From’ address to their address book.
• Closes loops on any open relays.
• Sets up a reverse name domain system (DNS) so ISPs can recognize the sender.
• Creates feedback loops with America Online, so that if an AOL subscriber clicks on AOL’s spam button, TheStreet removes them from the subscriber list automatically.
• Has a fail-safe program so that if an e-mail is not delivered to a subscriber, TheStreet follows a written “escalation path” for resolving deliverability issues with the 10 biggest ISPs.
• Honors requests to opt out within three days.
• Has written Can Spam requirements distributed to advertisements.
  — Kris Oser