• January 1, 2009
  • By Jessica Tsai, Assistant Editor, CRM magazine

Email: What’s Inside?

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All the usual warning signs were there. Facebook had notified me of a message received from a friend. Didn’t matter that the subject line of the message read “eSxy vvideo wwith you. Youu’re ince there.” Didn’t matter that the message body contained merely the text “LOL” and a link. I trusted the sender (my friend) and I trusted the source (Facebook), so I clicked. I was promptly led to an unknown Web page, which I immediately exited out of and silently hoped my computer wouldn’t explode.

I may have dodged a bullet, but my shame wasn’t assuaged until an interview with Jeanniey Mullen, founder and executive director of the Email Experience Council. She admitted that she, too, fell into the very same trap. In her case, though, the malicious program hacked into her Facebook account and proceeded to disseminate the virus to her 700-plus contacts. Mullen, however, saw the silver lining: “It was a huge testament to the power email has when it comes from a trusted source,” she says, calling it “a successful day in the life of email because it showed that it’s so impactful.”

That impact may be on the wane. According to the Direct Marketing Association, email returned $45.06 for every dollar spent on it in 2008, down from $48.34 in 2007. That’s projected to sink to $43.52 in 2009. In its Power of Direct Marketing Report 2008–2009, the DMA attributes this decline to a gradual shift “toward the direct marketing norm.” Still, email remains the highest-earning channel, with Internet marketing coming in second at $19.94, down from $20.60 in 2007, despite being the least expensive medium—$0.6 billion was spent on commercial email in 2008, compared to $24.1 billion in non-email Internet marketing. (Telephone marketing, at $42.5 billion, was the priciest.)

Email deliverability solutions provider Habeas (acquired in August 2008 by its former competitor Return Path) found that 67 percent of consumers prefer to use email to communicate with businesses (postal mail came in a distant second at 35 percent). Habeas’s Email Survey 2008 further underscored the popularity of the medium, indicating that 73 percent of Internet users check their email on a daily basis. Further, 63 percent say they’re unwilling to relinquish this communication channel, up from 61 percent in 2007. Only 3 percent of respondents said they could give up email completely.

Email certainly did have its share of bumps before reaching the top. Bob Myhal, president of health and fitness e-commerce site Musclemaster.com, remembers when the company first introduced its email list in 1999, consumers couldn’t get enough. “We had 17,000 subscribers in the first two months,” Myhal recalls. “Email marketing was easy [then]. Everybody wanted to get email.” Musclemaster started with its “fitness tip of the week” and gradually began to embed marketing messages that encouraged consumers to make purchases and share their personal preferences. “We really built our business through that,” he says.

Then came 2003. Concern about spam was high and email fatigue was palpable. An added layer of protection came with that year’s CAN-SPAM Act. Having previously seen open rates of 40 percent to 50 percent, Myhal recalls open rates dropping dramatically—down to 10 percent, with many subscribers opting out entirely.

As email technology got more sophisticated, users also got smarter about protecting their systems and personal information. Even so, Charles Stiles, co-vice chair of the Messaging Anti-Abuse Working Group (MAAWG), says that simply educating users isn’t enough to ensure they can recognize spam, especially when, as he says, “there are plenty of industry experts that can’t.”

Nevertheless, fears about email have subsided to a large extent, allowing email marketing to flourish again. What started as a novelty for early adopters and the technologically advanced is now a core part of managing everyday life. Improved broadband connections and the popularity of laptops and smartphones have vastly contributed to the reliance on email. “It’s become so powerful mainly because consumers have become very digital and very mobile,” Mullen says.

Special Delivery
In May 2008, the cost of a stamp from the United States Postal Service rose to 42 cents. An email, however, is essentially free. The caveat, of course, is that actually getting it delivered—not to mention the cost of developing the creative material—carries a price tag that marketers cannot afford to squander.

“A very small percentage of emails the ISPs [Internet service providers] handle is legitimate—90 percent of it is spam,” says David Atlas, senior vice president of worldwide marketing and sales for certified email provider Goodmail. Of the ones that are legitimate, email deliverability vender Pivotal Veracity reports that roughly 20 percent don’t even get delivered. According to an October 2008 report by JupiterResearch, now part of Forrester Research, the U.S. email market will have wasted $134 million on paid-but-undelivered email. “[It’s] only a $1 billion industry,” says David Daniels, a Forrester vice president and principal analyst. “That’s 10 percent of our industry we just set on fire every day.”

“Consumers today see less spam than they’ve seen in the past,” MAAWG’s Stiles says, “[but] there’s actually more spam than there’s ever been.” But even if you’re not selling Viagra, spam is in the eye of the beholder. Some experts define it as anything a recipient doesn’t want; if the request was for emails to be sent monthly and you send them daily—you’re spam. “Companies will say, ‘But I’m CAN-SPAM compliant,’” Stiles notes. “[That] means you won’t wear an orange jumpsuit and handcuffs. It doesn’t mean you have the right to send email.”

Most ISPs provide email recipients with a “Report Spam” button to flag an unwelcome email. Despite the aggressive measures to block “real” spam, users are conditioned to hit that button to get rid of any unwanted email. In a September 2008 report, JupiterResearch found that approximately 25 percent of consumers hit “Report Spam” to opt out of emails they’d subscribed to. Unfortunately, the report continues, “complaint rates are driven by consumers using the spam button to unsubscribe—a habit they show no sign of stopping.” To counter that, some experts advise marketers to have their opt-out link near the “Report Spam” button to encourage recipients to choose the less-brutal option.

Reputation and Authentication
If you do get blocked, it could be your content, but the more likely culprit is your reputation, says Bill Wagner, executive vice president of business operations at on-premises email service provider StrongMail. “What do [the ISPs] care about?” he asks. “They don’t care that a message is coming from Charles Schwab…. What they care about is maintaining their client inboxes [and] protecting their clients with those accounts…. They care about reputation as it’s perceived by the owner of the mailbox.”

Current adoption of email reputation management (ERM) best practices, however, remains low. Daniels reports that only 35 percent of marketers report implementing Sender Policy Framework, Sender Identification Framework (Sender-ID), and DomainKeys Identified Mail, with an additional 10 percent to 12 percent planning to do so in the next 12 months. (See “Three Levels of Email Authentication,” below.)

Barry Abel, vice president of operations for Message Systems, compares the current attitude toward authentication to the conundrum of the chicken and the egg: “Why authenticate if I’m not sure the ISPs are checking?” Soon, senders may no longer have a choice. Daniels anticipates that by the second quarter of 2009, if a sender’s address is not authenticated, it won’t just be more-carefully screened—it will be immediately dropped.

Inevitably, efforts to keep the “bad guys” out have also made it more difficult for the “good guys” to get in. “As far as deliverability goes, the biggest challenge for marketers is managing the ISPs’ ever-changing rules…[and] changing their threshold of complaints,” Mullen says, but for good reason: “They do it to stay one step ahead of the spammers.”

An email marketer herself, Mullen empathizes with her peers’ frustrations. It’d be great to have a rulebook—what works, what doesn’t—but it’s not practical. “If [ISPs] did that, obviously the spammers would have a field day,” she says. All marketers can really do is send out their messages and carefully monitor what’s getting delivered. “One day, for one of your 700 clients, you’ll notice that their emails to Yahoo! didn’t make it through—and so you need to identify why,” Mullen says.

As a result, getting blacklisted is just the nature of the beast. “Every large emailer at some point in time will be blacklisted, even if they follow all the best practices,” Mullen says. When that happens, she says, companies can often expect a negative impact on revenues so it’s best to figure out how to get off the list, whether it’s filling out a Web form or changing your list management practices. The time it takes to get back on track can be anywhere from days to weeks, depending on why you were blacklisted in the first place. The effect also carries over to any ads or links associated with your email, including your partners’.

Andy Tomasello, director of network operations at DemocracyInAction, a self-described “progressive nonprofit” that provides e-advocacy tools to other nonprofits, advises marketers to request a feedback loop (FBL) to use as a benchmark. “[FBLs] let you know very quickly what percentage of [your] mail is being marked as spam,” which could signal problems in key areas such as poor list hygiene or oversending.

Despite the acronym, your email service provider (ESP) isn’t psychic. A reputable ESP won’t bring you on as a client unless you agree to abide by certain best practices, and you’ll get guidelines to avoid getting blacklisted. But your ESP can have 10 clients or 10,000, affecting how much handholding you’ll get. In most cases, an ESP will be as proactive as possible in managing and watching your lists.

Open Up
Trust is no less important once you make it to the inbox, Mullen says. First of all, the “From” name has to be recognizable. According to Habeas’s research, 71 percent of survey respondents say they will not open an email if they have doubts about the sender’s identity, up from 61 percent in 2007. Moreover, 69 percent of people now admit to being “somewhat or very concerned” about becoming victims of Internet fraud, compared to just 62 percent in 2007.

ExactTarget estimates that the average email reader spends approximately 2.5 seconds to decide which ones need to be read, saved, or deleted. Making matters worse, Mullen notes, is the fact that emails today are often first viewed on mobile devices. “[People] are going to make the decision to open or not literally just by subject line—scrolling as they’re walking to a meeting, to the airport, [or] in the mall.” Whether it’s “Click here for 25 percent off” or “Download a white paper,” you must show clear and explicit value.

But get to the point. “You don’t have their full attention like you used to,” Mullen says, adding that a call to action be at the top. Follow with the rest of the email and provide the same call to action at the bottom. This way, she says, you appeal to the “impulse” reactors and those who actually read the email.

Here’s the hard part: Once you find something that works, Daniels says, change it. This may sound counterintuitive, but consumers adapt quickly, rendering techniques far less effective each subsequent time. Daniels, for one, is tired of seeing the line “Try Our New Oven Baked Sandwiches!” in his inbox every week. “They’re not changing it up, they’re not testing it,” Daniels says. Even a line like “This Week: Try Our New Hot Pastrami!” would strike a bit more appeal.

Email accreditation services such as Goodmail Systems arm legitimate mails with an icon that certifies not only the sender but each individual message. According to a Goodmail survey of 1,200 users of AOL, Yahoo!, and Comcast, 72 percent of respondents said they were more likely to open a certified piece of mail than a regular message, and 54 percent said they were more likely to attempt to buy from one.

Click It
As with all digital media, testing is critical. Mullen personally prefers using eye-tracking technology and best practices related to the visual layout of the message for both design and copy. Whatever you use—test, test, test. Before launching your campaign far and wide, send it to Google, Yahoo!, AOL, Outlook, and read it as it would appear in your recipients’ inbox.

Depending on your business, incorporating images can make all the difference. Musclemaster found that image-laden messages were twice as effective as emails that contained none. People wanted to see pictures of healthy and fit people as they were purchasing health and vitamin supplements, Myhal says.

Of course, just having images is futile if they fail to show up. Last June, the Email Experience Council (EEC) partnered with marketing tools provider SubscriberMail to understand the state of image-rendering. According to the Retail Email Rendering Benchmark Study, only 42 percent of the 104 online retailers in the study used a mix of HTML text and images and only 63 percent “adequately or extensively” used features known as “alt tags”—text descriptions of images that appear when the picture doesn’t show or when you mouse over it.

Since those are the two best techniques against image-blocking environments, experts say these numbers are not nearly as high as they should be. Upon closer inspection, EEC researchers found that 23 percent of retailers sent emails with images that were “completely unintelligible.” The remaining 77 percent exhibited “significant variations in clarity.” What’s more, 51 percent of respondents to the Habeas report felt that an email is “definitely/probably spam” if the images don’t show.

The study also included results from a survey of 472 marketing executives regarding their use of email images. Only 47 percent said they designed emails with image suppression in mind. For many others, the delay to action is surprising given evidence that such changes have exhibited significant returns. The study found that of the 38 percent who tested and made the necessary changes to their emails, 32 percent have seen an increase in both open and clickthrough rates and 17 percent saw an increase in conversions.

One extremely beneficial practice that Daniels says isn’t widespread is the use of clickthrough data. This can not only help marketers determine what part of the email campaign is getting read, if at all, but also to segment users based on these behaviors.

Only about 40 percent of marketers report using this data, Daniels says—a fact he finds somewhat bewildering. “That’s the first clue you can use to see if these people are still alive. If people haven’t clicked, you can try ‘win-back’ campaigns, [or] survey sweepstakes [to] see if there’s a pulse.” If there’s no bite at the end of the line, remove these individuals from your list—save yourself some money and protect your credibility.
JupiterResearch recommends removing subscribers after 10 months of inactivity. Some are even more finicky: During a recent Web event, Huw Griffiths, director of marketing at communications provider Protus, said that he scans his email list every six months. He removes anyone who hasn’t clicked or shown engagement, even if the emails were opened—to him, that’s not a prospect.

Global trademark solutions provider Thomson CompuMark isn’t as quick to throw in the towel. Recipients who haven’t opened five consecutive emails will receive a re-opt-in email. Only if there’s still no response does Thomson CompuMark begin “actively querying,” explains Dave Wieneke, the company’s interactive marketing manager. Staffers then look for patterns to detect potential filtering, and make follow-up calls to confirm if the subscriber should continue to receive updates. Even those who don’t have a further need for trademark research appreciate the personal attention.

One Big Happy Family
Everyone wants to restore the legitimacy and power of email as a communication channel. Vendors provide email services that range from hygiene and correction (FreshAddress), to deliverability (Return Path), to ESPs (StrongMail Systems, Acxiom Digital), to marketing automation solutions that manage email among other channels (Unica, Marketo).

The market is slowly consolidating, as companies with complementary services unite. FreshAddress acquired Return Path’s email change-of-address business late last October; Return Path acquired Habeas last August; and various database companies acquired email messaging vendors—YesMail was acquired by InfoGroup (formerly InfoUSA) in 2003, CheetahMail by Experian in 2004, and Digital Impact by Acxiom in 2005.

Perhaps the only thing that enjoys a consensus vote is the Federal Trade Commission’s CAN-SPAM Act. Other than that, Mullen says, “there are differing opinions over best practices that relate to everything under the sun.” That is precisely why, she says, she was motivated to start the EEC nearly three years ago. “It was very frustrating for me as a marketer to know whose best practices were the best,” she says. “MarketingSherpa will come out and say, ‘This is how you should approach your subject lines and landing pages,’ which would directly conflict with a report ExactTarget came out with.”

Some initiatives ultimately favor converging best practices. Daniels organized the Email Measurement Accuracy Coalition in 2007, where members of the various groups convened to “establish a consistent methodology and framework for the accurate calculation of email delivery, in order to inform the computation of critical email marketing metrics,” Daniels wrote then, referring to open, clickthrough, and conversion rates.

Nevertheless, as much as it’s a team effort, many are still excited to play a role in this growing market. “Unfortunately—or fortunately—there’s a heck of a lot of money to be made in email consulting over what best practices really are,” Mullen says. “So a lot of [ESPs] don’t necessarily agree that they want to change their methodology and want everyone to adopt the same thing because that in turn means that services are needed less.” But, she says, consistency doesn’t have to come at the cost of capitalizing on email. Quite the contrary. “I think that, if we all agree on some basics, that helps the industry move forward.”

SIDEBAR: Email Associations or Services with Sender Initiatives

  • Anti Phishing Working Group (APWG)
  • Authentication and Online Trust Alliance (AOTA)
  • Direct Marketing Association (DMA)
  • Email Experience Council (EEC), part of the DMA
  • Email Sender & Provider Coalition (ESPC)
  • Interactive Advertising Bureau (IAB)
  • Messaging Anti-Abuse Working Group (MAAWG)
  • Network Abuse Clearinghouse
  • TRUSTe

Source: MAAWG Sender Best Communications Practice, Version 2.0

SIDEBAR: The Worst Email Maneuvers
We asked marketers and industry pundits to name the most terrible moves in email marketing.

>> The first worst thing you can do is mix up your acquisition and retention list on the same system…. That’s going to ding your complaint rate and it’s going to make you get less delivered…. You can fail to unsubscribe people when they complain—that’s not only a bad idea, that’s illegal. The third thing you can do, frankly, is not take a look at all the technology out there to improve. [Finally], you can not be constantly testing and testing and testing and seeing what works.
—David Atlas, senior vice president of worldwide marketing and sales, Goodmail Systems

>> Never assume that just because you got permission, (a) that you’re going to get delivered; and (b) that you’re not a spammer…. Way too many marketers capture that permission but then send stuff that’s inconsistent with the notice they gave to consumers when they signed up, or they’re just sending too much of it…. How you give notice always trumps how you get permission.
—Jordan Cohen, senior director of industry relations, Goodmail Systems

>> If your customers are not receiving the messages they want at the frequency they’re expecting, then they’re not going to be your customers, they’re not going to want your messages, they’re going to report it as spam, and ISPs owe it to their customers to stop those.
—Charles Stiles, co-vice chair, the Messaging Anti-Abuse Working Group

>> Coming into the office, even though we check emails at 6 a.m. on our BlackBerrys, we still have another 123 emails later to check, so you’ve got to deal with [email] fatigue. Just because other people are sending a lot of emails doesn’t give you the excuse to send more…. If you’re going to increase your frequency in a tough economic time like this, you’d better be increasing the value and relevance of your emails.
—Simms Jenkins, chief executive officer, BrightWave Marketing, and author of The Truth About Email Marketing

SIDEBAR: Three Levels of Email Authentication

TypeComplexityWho’s CheckingDescription
Sender Policy Framework (SPF)
Simplest   Bellsouth
Rogers Cable
Uses path registration to verify the domain name of the email sender using the Internet Protocol (IP) address.
Sender Identification Framework
(SIDF or Sender-ID)
More complexAOL
Bell Canada
A Microsoft protocol derived from SPF that verifies the domain name of the sender by mapping it to a purported responsible address (PRA) domain or an SPF Return Path domain, depending on the receiver.
Domain Keys Identified Mail
Bell Canada
Yahoo! Mail
The sender encodes a “private key” in the message; a signature header allows the receiver to decode and verify the key against the public key stored in the Domain Name System.

Source: ReputationWiki.org; MailChimp; MAAWG “Trust in Email Begins with Authentication,” March 2008

Contact Assistant Editor Jessica Tsai at jtsai@destinationCRM.com.

Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationcrm.com/subscribe/.

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