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Spam’s About Economics, Not Privacy

There is no hard and fast rule that defines spam, so how do marketers use what is a magnificent direct marketing tool without attracting the anger and reaction that has forced companies such as Microsoft, America Online and Real Networks to change their processes?

Besides employing a service bureau, perhaps the best solution is to explain the fundamental issue that makes spam so unacceptable. Surprisingly, it is not an issue of privacy, but one of cost shifting. And whether or not you believe the argument to be valid, it’s an argument you need to understand.

In traditional marketing, the advertiser bears the cost of the promotion, including delivery. The advertiser pays the magazine, newspaper or TV station, and because of the advertiser’s subsidy, the reader or viewer gets the content at a reduced rate or free.

On the Internet, the recipient’s ISP provides the necessary infrastructure, including the bandwidth, the servers and the management, in exchange for a monthly service fee. As part of the agreement, the ISP agrees to allow the subscriber to receive e-mail without limits (there may be defensive limits for sending related to spam). Now let’s assume that each subscriber on the system gets one advertising e-mail from an external source for each personal or business e-mail he receives. So the volume of e-mail handled by the ISP doubles. In order to cope with this, the ISP has to pass the costs somewhere.

Who pays? Unfortunately the ISP has absolutely no relationship with the sender of the e-mail. And because of the way the Internet works, he has no way of billing the sender. In fact, the only parties the ISP has a financial relationship with are the recipients – their customers. So that’s where the increased costs are passed. The recipient pays for the costs of receiving the advertising — not the sender.

Remember, this has absolutely nothing to do with the content of the marketing messages. It isn’t an issue of privacy. It is purely a financial issue, and is the prime reason that spam has polarized so many, and created such angst within the grassroots Internet community. So how does a marketer deal with this?

What if an advertiser sent you e-mail, and then told you that if you didn’t want to receive any more advertising e-mail, you could simply say no? This is the opt-out model. But if you understand the cost shifting issue, you see that this fails the test. The recipient pays for that first message, which is unacceptable. And it is still unacceptable even if the advertiser believes in his heart that the information he is bringing you is of enormous benefit. That is the advertiser’s judgment, not the recipient’s. Remember, the message itself is irrelevant. If the recipient pays for the message and it is unsolicited, it is spam.

The correct way to achieve the goal of marketing via e-mail is to follow the opt-in model. Traditional media are used to encourage individuals to give permission for e-mail marketing messages and communication to be sent. And once you have the permission, you can live without fear of the punishment that generally follows spam: complaints from your ISP that can lead to loss of access; inclusion in the Realtime Blackhole List (see www.mail-abuse.org/rbl/) and customer and consumer.

Using e-mail to solicit permission is absolutely acceptable as long as your message is sent to a qualified opt-in list where the recipient has given permission to receive messages from third parties. In fact, crafting the appropriate opt-in statement and getting subscribers to your list to agree to receive third-party messages can generate significant revenue for you. You can do anything you want, as long as you clearly ask for permission to do it up front.

Surprisingly, companies who generate opt-in lists as their core business find very little reduction in response when they broaden the scope of their opt-in statement. People don’t mind receiving e-mail if they have given prior permission.

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