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Opting In And Pushing Out
Is Email The Future Of Online Marketing, Or Spam Without The Can?

(McLean, VA — September 23, 1999) Jupiter Communications estimates that by 2002, opt-in email marketing will be a $3 billion market. As clickthrough rates for Web banner advertisements continue to decline below 1%, Rosalind Resnick reports that those for opt-in email remain in the 5-15% range, "and, for some of our lists, even higher."

Resnick, who spoke today at the Morino Institute Netpreneur Program's Coffee & DoughNets meeting, is the president and CEO of NetCreations, Inc., the Internet's leading provider of opt-in marketing services to help publishers, cataloguers and other direct marketers reach targeted prospects through email. In recent years, as email has become an increasingly more powerful and popular tool for customer acquisition and retention, Resnick has been one of the leaders in developing new ways to maximize its business potential. She is particularly well known for spearheading the "opt-in" movement—email distribution lists which subscribers join voluntarily, either to receive promotional ads or electronic newsletters that may (or may not) contain advertisements. Opt-in techniques are one way the industry is trying to balance the drive to reach consumers and subscribers with concerns about both privacy and the deluge of junk emails often called "spam."

Response rates to effective email marketing programs are at levels that traditional direct marketers only dream about. While no one seems to doubt email's potential, it is still such a young science that most people are trying to determine its rules and best practices—especially with technologies and business models changing so rapidly in the online world. That's undoubtedly why over 375 netpreneurs turned out for this session. Resnick's talk served double duty, showing not only how email marketing has changed in recent years to become a recognized tool, but also standing as an object lesson in business development for all Internet entrepreneurs, showing how changes in the market, consumer acceptance and technology caused NetCreation's business path to change. "The fact is," said Resnick, "when we were starting out in the Internet business four-and-a-half years ago, nobody knew what this industry was going to be. If we had taken venture capital way back then, I honestly don't know whether our VCs would have been patient enough to wait before email marketing hit the mainstream."

The wait has been worth it. NetCreations is preparing for an IPO, and former journalist Resnick has pioneered a field that is the talk of the Net. Audience members looking to her for advice in building effective programs got a full measure as Resnick guided them through issues and solutions. She covered diverse topics from the strategic, such as when to consider outsourcing email functions and whether recipients will be paid for receiving messages, to the deeply practical, such as the importance of subscription confirmations and whether HTML or plain text messages are more effective. Discussions even covered the best day of the week to send consumer or business-to-business campaigns—Tuesday or Wednesday for B-to-B, but Friday for consumer-oriented mailings since the weekend is when most people spend time on their home computers.

Resnick's presentation was complemented by three case studies presented by representatives of local companies that are also achieving email marketing success. Dell Wilkinson and Kevin DeWalt, Director of Membership Marketing and Online Product Manager respectively of The Motley Fool, discussed how the personal investing site used email to invigorate one lagging product. Club Fool was an area of the site dealing with investment clubs that was only getting about 6,000 impressions a day. When The Fool began to offer it as an email product, however, subscriptions jumped to nearly 120,000. That experience has led the company to evaluate content based upon email subscriptions as well as Web site use, and to explore the higher revenue potential of selling ads in emails.

A National Geographic Guide To Successful Email

1. Target the message to the customer. The fundamentals of direct mail apply to email marketing as well. If you don't say something relevant the "delete" key won't be far away.

2. The offer is key. Another direct marketing principle that carries over to email is the need to make an attractive offer, such as free shipping, discounts, etc.

3. Be creative. For example, although markets and opinions differ on the use of HTML or plain text email, the Geographic gets a higher response from the more attractive HTML messages.

4. Measure your clicks and conversions. A number of technology solutions are available for analyzing these important metrics.

5. Be cognizant of your subject line. You only have a moment to get people's attention.

6. Personalization is key. Use the data you have and use it wisely. Somebody who is interested in jazz probably doesn't want to hear about the latest in heavy metal music.

7. Maintain the relationship. If you contacted someone once, follow up when they order.

8. Make it easy to unsubscribe. A point made strongly by Rosalind Resnick, who insists that easing the process, is worth the 20-30% reductions in list size. It maintains a focused and interested subscriber base.

"The Motley Fool is a major site with about 80-100 million page impressions per day," noted Wilkinson, "so the last thing the programmers wanted were millions of emails going out. What has won everyone over is the success of the email marketing. We're seeing sign-ups now in the neighborhood of 50,000 a week, and predict that within months the number of email impressions will outpace Web impressions. The growth is phenomenal, and the advertising rates are going up, up, up, as the newsletters are targeted."

CareerBuilder.com has had similar successes with a very different application. The company uses the Web to match job seekers with hiring companies, and, according to Marketing Vice President Diane Strahan, has found that email technology enables the company to build a more proactive and long-term relationship with job seekers. Individuals can fill out brief "Dream Job" profiles, including the type of job they want, where they want to live, salary range and so forth. They then receive email notifications from a personal search agent only when employers list such a dream position with CareerBuilder. In addition to the other benefits, the emails maintain communication with people who are passive job seekers, those who might pursue certain specific opportunities, but who are comfortable enough in their present one that they will not go to a career site every day. Said Strahan, "It enables us to continually serve up a value proposition which the job seeker told us they wanted, in a way they wanted to view it and only what they wanted to see."

Lisa Perlbinder, Marketing Director for National Geographic Interactive talked about targeting as well, in addition to other pointers she has learned the hard way in the trenches. Said Perlbinder of the importance of email marketing, National Geographic has "had a very, very strong membership database that was started in 1888. For the email side of Geographic this is our 1888. We need to do everything humanly possible because if it wasn't for that list, Geographic wouldn't have gone from a small research institution with a magazine, to a corporation with hundreds of millions of dollars in revenue annually."

If one strategic point was central to both the case studies and Resnick's presentation, it is the need to know your market and your customer. Because the most striking promise of email marketing is its ability to "narrowcast" particular messages to receptive audiences, targeting goes far beyond issues of demographics and promotional offers. It means that certain techniques that work with a consumer audience won't work for business-to-business communication, and getting newsletter subscribers is a different challenge from sending pure advertisements. Experimentation and adaptation will continue since, as with most everything else about the Internet, change is constant and rapid. That's why Resnick's advice is, "Follow the market; it won't steer you wrong. Even though today we have a business plan, we have a CFO and we have projections, the way I navigate this business is still by my instincts and by my gut feel."

 

Copyright 1999 Morino Institute. All rights reserved.

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