Commercial E-Mailers Weigh Gmail's Impact
Gmail, now in testing by 1,000 invited users, will offer e-mailers 250 to 500 times the storage of free e-mail services like MSN's Hotmail and Yahoo, enough to store 500,000 pages of e-mails. In return, Google plans to serve paid listings next to e-mail messages by using its search technology to determine messages' content.
The system could result in commercial e-mailers triggering ads for competitors. For example, Google's search technology could scan an e-mail from 1-800 Contacts about a contact lens sale and select keywords like "Acuvue contact lenses" to match up to advertisers. It then could serve next to the e-mail message text listings that include 1-800 Contacts competitors like Vision Direct.
"Marketers are going to have a tough time accepting that," said Michael Della Penna, vice president of marketing at Bigfoot Interactive, a New York e-mail service provider. "Marketers are already paying to have that message delivered, they're paying for the attention of that consumer."
As the No. 1 search engine with legions of loyal users, industry analysts think Google could gain a significant number of e-mail users in a short time if Gmail lives up to its promise.
"It would represent a conflict for marketers, meaning it would indicate that the marketer would also have to pay a premium to ensure that they owned the top contextual ad placement in order to displace potential competitors from preying on their e-mail marketing campaigns," said David Daniels, a Jupiter Research analyst.
Della Penna said some marketers might consider not accepting a Gmail domain in registration, and Daniels said marketers might pull Gmail addresses from mailings and send them graphic messages that Google could not crawl.
Not all commercial e-mail providers see a threat.
"I think it will have significantly less of an impact when it's related to retention and relationship e-mail," said Bill Nussey, chief executive of Silverpop, an Atlanta e-mail marketing firm.
Privacy advocates have howled that Gmail's system would put Google in possession of personal information and possibly run afoul of European Union law. One United Kingdom group, Privacy International, has protested to the UK's information minister, according to Reuters. The group objects to Google crawling e-mail messages, and Gmail storing e-mail messages on Google's servers even after a user has deleted them.
Google has noted that human editors will not read users' e-mails and that the system complies with all privacy laws. Gmail uses the same technology to match ads to e-mail messages as it uses with publishers in its AdSense contextual-listings program.
Della Penna questions whether Google scanning e-mail messages would constitute the sharing of personal information with third parties under the Gramm-Leach-Bliley Act regulating the financial services industry.
For Google, Gmail is a gamble that e-mail users will trade off seeing ads tied to their e-mails in exchange for a more robust e-mail service buttressed by Google's search technology.
"You're going to have a number of security and competition concerns," Della Penna said.
Despite those concerns, Gmail's payoff could be huge for Google and its advertisers. Yahoo Mail garnered 8.1 million page views in February, according to Nielsen//NetRatings. In addition to paid listings, Gmail will sometimes display related Web search listings, too.
"That could significantly bump inventory up," said Kevin Lee, chief executive of Did-it.com, a New York search-marketing firm.