Risks, Opportunities After CAN-SPAM

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The CAN-SPAM law took effect a few days ago. For the most part, the Internet community thinks the legislation is inadequate and won't work. Marketers and advertisers seem happier about it.


In a series of columns over the next few weeks, I will consider various aspects of spam. I will leave the policy discussion for a later column. Today, I want to get right to the heart of the new opportunity that the legislation appears to offer advertisers. My theme is that opportunity brings risk, and the risk here is high.


Let's imagine life under the new legislation and assume that we have returned to the days when e-mail consisted only of messages from friends or colleagues or from lists that we signed up for. Can you remember that far back? Say, about a year ago or so.


Let's also suppose that the field is now more open to legitimate advertisers to send e-mail to customers and prospects. How will you use the new ability? A lot more may be at stake than you think.


First, where will you find e-mail addresses for existing customers? Getting someone's e-mail address from a third party is possible, but is it wise? People often have several e-mail addresses. If you use the wrong one, your mail may be filtered by an ISP or employer and never received.


Even worse, some people will be upset that you contacted them by e-mail without permission or used the wrong address. I am always a bad example, but I hate receiving e-mail from a merchant I patronize when I haven't given permission to e-mail me. It is often the end of my relationship with that merchant.


Second, even if today's pill-porn-penis spam is eradicated (an unrealistic prospect), people will remain sensitive to spam for a long time. Don't think that filtering is dead. It may be awhile, if ever, before ISPs and others stop offering spam filters or filtering mail. Just because your message may be legal doesn't mean that most Netizens will see it as anything but spam. Many will hate you for it.


Third, the next problem is how to use e-mail for advertising or contacting customers. If you send a glitzy, high-bandwidth message, users who live on modems may be unhappy about the lengthy download. While most offices have high-speed Internet connections, most homes do not. It may be a long time before a majority of home users has a fast connection.


Fourth, that first message to customers may be a tremendous gamble because it must include opt-out instructions. If the recipient is even slightly sensitive to advertising, doesn't like your company or is in a bad mood that day, the option to prohibit future mailings will be used.


When a recipient opts out, that ends your ability to send e-mail without consent forever. One slip and the ballgame is over with that individual. The spam law has no open-ended continuing business relationship loophole like the Federal Trade Commission's do-not-call regulations. You also are prohibited from transferring that e-mail address to others, so you have to keep track of that as well.


You can't treat an e-mail recipient like you treated Aunt Minnie, who tossed unwanted snail mail and rarely reacted otherwise, even when angry. The Internet facilitates two-way communication. The legislation requires that you let users talk back, at least for opt-out purposes.


Back to that first message: What's in it? An irresistible offer? A huge discount? How much are you willing to pay to establish an e-mail relationship with a customer? The consumer can end the e-mail relationship permanently at any time, and that must limit the cost of any offer.


Be careful about doing market testing because consumers not only can talk back to you, but they can talk to each other. If you test to see whether a 10 percent or 20 percent discount is enough, consumers will find a way to post that information for others to see. Differential pricing does not sit well with Internet users or with consumers in general, so getting caught at this game may not be fun. The press loves stories about differential pricing, too. Web sites are likely to post information about e-mail offers from legitimate companies so there may be no confidentiality as with snail mail testing.


On the other hand, if that first message is too uninteresting, too bland or hints at even more spam, you may have little for your efforts beyond many opt-outs. Finding the right balance will be tough.


Fifth, other countries have much tougher restrictions on spam, so if that e-mail is going abroad, you may be in violation of another country's law. How can you tell whether an e-mail address is in a foreign country? In many cases, you can't.


The new spam law does little for recipients, and it doesn't do much for senders, either. The risk of using e-mail for marketing is high, the returns are uncertain and opt-outs may kill your future ability to contact customers.


Congress rarely solves problems without creating new ones. I predict lots of pressure for amendments to the spam law in the near future.


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