CheetahMail Opens in Britain

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E-mail marketing firm CheetahMail Inc. has opened a wholly owned subsidiary in Britain at a time many online service providers are closing doors.


The new company, CheetahMail UK, has signed an undisclosed local client for service out of its Weybridge, Surrey, office. This is CheetahMail's first overseas foray and third office after the New York headquarters and Irvine, CA, branch.


"Outside of the U.S., Britain is one of the fastest adopters of e-mail marketing, with high penetration rates and a culture that is open to direct response marketing, so this is a logical first move for us outside of our core market, North America," CheetahMail CEO Irene Pedraza said.


The British office will be steered by CEO Emma Hammersley. Denis Sheehan is chief operating officer, and Jude Hudson is chief technology officer. Four other employees from the British e-mail marketing field support.


"We expect that to grow to 10 by the end of the year and grow substantially in 2003," Pedraza said.


The British office, which will handle fulfillment locally, opens almost a year before a new, tougher Electronics Communications (Processing of Personal Data and the Protection of Privacy) Directive kicks in.


But CheetahMail enters a climate receptive to DM. According to the London-based Direct Marketing Association, the direct marketing industry in Britain bested its advertising peers by 10 percent.


A study released in July by that trade body said the DM industry was worth $18 billion in 2001. Of that, telemarketing spending accounted for $4.6 billion and direct mail $3.8 billion. But expenditure on new media was up 185 percent to $710 million.


In that report, the DMA said 60 percent of British direct marketers use e-mail in integrated campaigns and 87 percent predict more use of the tactic.


So CheetahMail debuts in an environment that is requiring more accountability for marketing dollars.


CheetahMail, founded in 1998, claims to be one of the fastest-growing e-mail marketing firms in the United States, and, uniquely, profitable. Its platform enables real-time data and results measurement for opt-in e-mail campaigns and alerts.


The company deploys e-mails for Federated Department Stores' Macys.com and Bloomingdale's, ABC TV, Wilsons Leather, Spiegel, InStyle, The Discovery Channel, WeddingChannel.com, Loehmann's, CompUSA, Dollar Rent A Car, Sur La Table, Neiman Marcus and the Arthritis Foundation. It has roughly 120 clients.


An impetus for the move was that many clients with British subsidiaries expressed interest in using CheetahMail's services in Britain, the company claims.


"E-mail is extremely popular in Britain," Pedraza said. "Because of their smaller population -- less than 25 percent of the U.S. -- there are naturally fewer addresses, but they find e-mail compelling for the same reasons we do here: convenience, cost and effectiveness as a marketing medium."


Use of e-mail marketing is set to soar in Britain, according to a survey released in June by database software maker Experian Ltd. and the British DMA. Sixty percent of respondents use e-mail marketing campaigns. Of these, 16 percent use e-mail more than direct mail and 30 percent opt for e-mail over telemarketing. Since mobile text messaging is relatively new, 55 percent use e-mail more than short messaging service, also known as SMS.


In that survey of 119 British DMA members and 283 Experian clients, 86 percent planned to ramp up their e-mail marketing budget in the next two years. Of those now abstaining from the tactic, 85 percent plan to start using it in the next two years.


Most respondents prefer e-mail for the low cost, followed by speed and ease of delivery, reporting functionality and reliability. Sixty percent said they use it for servicing information requests, 58 percent for targeting new business and 53 percent for customer newsletters.


Also, 44 percent use e-mail for account management, 35 percent for account information to customers, 29 percent for taking orders online and 11 percent for billing. Two-thirds said e-mail was a secure medium for sending sensitive or commercial messages.


Response rates for British e-mail campaigns typically hover between 10 percent and 15 percent, the survey found.


In the same study, 64 percent of marketers said e-mails are designed in-house. But the same proportion use third parties to outsource deployment of e-mail due to the youth of the tactic. This is the sweet spot CheetahMail has identified, going head-to-head with Experian's Contact Mail product, among others.


The makeup of e-mail marketers in Britain mirrors firms stateside: retailers with e-commerce divisions, financial services, travel groups and entertainment.


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