E-Mail Panel Weighs Permission Issues

It was the suits on one side of the room and khakis on the other as an audience of traditional direct marketers and online marketers gathered in New York this month for a panel discussion on e-mail marketing.

What they heard was a lively debate on opt-in vs. opt-out registrations and suggestions by some in the online space that a double standard exists when it comes to permission standards.

“Look at the offline world,” said David Levitsky, executive vice president at Advaya, the New York-based Internet direct marketing division of entertainment Web site BigStar.com. “All of these issues are not even being considered. The issue of whether a box is checked or unchecked is over-emphasized. We need to have some leeway.”

He was referring to the debate among online marketers over whether a prechecked “can-we-send-you-offers-via-e-mail” box during Web site registration constitutes permission by the consumer.

Levitsky, who helped to develop the division's e-mail marketing services, compared e-mail to direct mail and telesales. “Those postcards you fill out never have a box for you to check,” he said.

Among the strongest advocates of permission spectrum is e-mail list development and management firm NetCreations, which enforces a double opt-in policy before it adds an e-mail name to its 9 million-member database. Mitchell York, NetCreations' president and chief operating officer, told the attendees that NetCreations loses 40 percent of the people who sign up for its e-mails as a result of the double opt-in policy. However, he said, the company believes its cautious approach results in e-mail names with high levels of interest in receiving promotional messages.

Rich Maradik, CEO of SmartReminders.com, an e-mail reminder service based in Nashville, TN, that launched in April, advocated a free-market approach to the question of opt-in or opt-out permission, saying that performance will regulate the way names are gathered.

“Either your list meets your customers needs, or it doesn't,” said Maradik. “If you use opt-out and have a poor list with lots of attrition, you'll change [to opt-in].” SmartReminders.com, which competes in the same arena as LifeMinders.com, has grown from no names to 1 million in two and a half months, Maradik noted.

The forum also addressed the need to complement e-mail lists with additional demographic information. While online sweepstakes came up as a source of detailed e-mail names, the panel was mixed about their effectiveness.

Maradik called these sweepstakes “name machines” and warned that they provide only the most initial contact.

“The traffic they generate is not loyal or sustainable if you don't establish your own relationships with the users,” he explained. “You need to opt them in to your service.”

Incremental reward programs that obtain customer data at a slower pace are a more effective means of augmenting an e-mail list, said Levitsky, who previously served as an offline marketer at Columbia House.

“The process of list segmentation requires brute force,” he said. “Even if you have only an e-mail name and maybe the sex and ZIP code, you can work and build off of that by offering rewards for incremental data submission.” Levitsky said an online marketer might offer a $5 coupon for every additional data point a user provides.

The May 24 breakfast seminar was hosted by the Winterberry Group, a New York consulting firm, and drew about 100 attendees from companies like 24/7 Media, Grey Direct Marketing, Flooz.com and others.

Regarding the much-feared drop-off in e-mail response rates, NetCreations' York said his firm sees ways it can continue to draw high responses. For business-to-business e-mails, the key is to provide information along with the marketing promotions. For consumers, the e-mails need an offer and a brand that resonates and matters to them. Often, plain text e-mails still draw the best results.

“A lot of users and marketers still like text because it's cleaner and the pitch is more direct and uncluttered,” he said.

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