Mulling E-mail Options

U.S. should stick with opt-out.

BY DOUGLAS WOOD

The European Union recently debated whether or not to regulate commercial e-mail. Before our own Congress begins a similar debate (a prospect we should dread), certain things need to be considered.

Unlike most online advertising, unsolicited commercial e-mail (or spam) has proven to be a very cost-effective way to reach customers. Unfortunately, a few marketers who abuse the medium have caused an outcry by privacy advocates.

Consumers are more aware of online privacy than privacy advocates would have us believe. In a recent Harris Interactive survey, eight of 10 consumers said they pay attention to privacy statements posted on Internet sites. Despite this, alarmists continue to push the government to force all e-mail marketers to get consumer permission before sending any messages. Opt-in would severely diminish e-mail as a viable marketing medium. There are a number of reasons why opt-in is a mistake.

• Direct mail and telemarketing have been governed by opt-out rules for years. This lets recipients control all messages they receive after the first contact. If you don’t want more calls, just tell the caller to put you on the “do not call” list. If you don’t want junk mail, just register with the Direct Marketing Association.
• Commercial e-mail is far cheaper than direct mail or telemarketing. If regulators force marketers to solicit approval before sending e-mail, they will hurt small businesses far more than large companies.
• If the U.S. requires all marketers to let consumers opt in, marketers who abuse the system will just move operations offshore, making objectionable commercial e-mail far more difficult to regulate. Witness online gaming or pornography.

It is naïve to think that consumer privacy will be protected if e-mail marketers are forced to comply with opt-in requirements. Offline marketers have used sophisticated data management for decades. Any semblance of the kind of privacy that the critics of e-mail espouse to protect was lost long ago, and without any discernable concern by or damage to consumers.

Douglas Wood is executive partner at Hall Dickler Kent Goldstein & Wood, New York City. Reach him at [email protected].

Opt-in gets better response.

BY DAVID BROSSE

At the end of July, the European Union’s Committee for Citizens’ Freedoms and Rights gave a preliminary ruling in favor of an opt-out policy for advertising e-mails. This effectively opens the door, at least in the short term, to spam.

The U.K. probably has the most open policy on direct marketing. That country is witnessing a complicated (some would say confused) battle over the use of personal data in direct marketing. The country’s electoral register is about to carry a prominent opt-out clause. The government also currently favors opt-out for unsolicited e-mail, and is being lobbied heavily by the U.K. Direct Marketing Association.

Some companies, including Mypoints.com, have voluntarily adopted a strict opt-in policy. That is mainly because we know from U.S. and U.K. experience how significantly response and conversion rates, campaign ROI, acceptable e-mailing frequency, and the whole consumer experience improve radically when consumers have given their permission. Our U.K. clients are seeing response rates averaging 15 percent, compared with typical response rates for opt-out e-mail between two percent and four percent. Research from IMT Strategies found that, while 36 percent of respondents had responded to opt-in e-mail “several times” or “often,” the equivalent response for opt-out e-mail was just eight percent.

If opt-out becomes enshrined in legislation, permission brands become even more powerful in the minds of the public. We know that the consumer is no fool and will appreciate and favor promotional e-mails if they come via a permission-based organization. They know it will be relevant and fit into their likes and interests.

It appears also that a “double” opt-in approach is starting to gain credibility in Europe. Consumers who opt in then confirm their preferences, affirming (by return e-mail) that, for example, they do want to subscribe to a specific e-mail newsletter. In fact, on both sides of the Atlantic, permission e-mail has gotten more sophisticated with incentive-based multiple opt-in, which rewards consumers for updating their preferences.

The opt-in/opt-out debate is by no means over. Consumer pressure will mount when unsolicited e-advertising volume escalates, especially now that traditional brands are using e-mail messages.

David Brosse is marketing director for MyPoints Europe. Reach him at [email protected].

In July, a European Union Parliament committee preliminarily adopted an opt-out policy for e-mail marketing. The EU Telecommunications Council, representing the 15 EU member states, supports an opt-in system. The two sides have to agree before any EU-wide statute becomes law.