Internet Changes Everything

E-Mail Marketers Feel the Heat from Spam

I've noticed the press, consumers, government, everyone is complaining publcly about spam and the internet industry is listening. ISP's (MSN, Earthlink, AOL) are all starting to take action, legal, and technical action. Of course they have no choice, since this article indicates that users are not clicking through on ad's nearly as much as before. With response rates at 2.65 per 1,000 (0.00265%) this is miniscule response. However, given how cheap it is to send out hundreds of thousands of emails, this would mean that even at 1,000,000 emails, the response rate will still get 2,650 responses so at $10 per response, the spammer will still make some money.

I suspect that spammer payments will be less than $10, and siginficantly dropping too given the bad perception that they are creating, so over time this momentum against them should work, but it really has to start with the people who pay spammers.

E-Mail Marketers Feel the Heat from Spam
Mon Aug 25, 5:46 PM ET
By Michele Gershberg

NEW YORK (Reuters) - Retailers who hawk their wares via e-mail are finding it harder to make a buck from customers as e-mail in-boxes overflow with the random ads known as spam.

Although many retailers establish ties with consumers that distinguish them from spam-senders, a study released Monday showed they earned slightly lower revenue from each e-mail advertisement sent out in the second quarter of 2003.

U.S. marketers, consumer groups and trade associations are pushing authorities to fight the onslaught of deceptive or vulgar spam messages. For retailers, spam snarls the potential for reaching clients who may want to see their ads.

"Spam has poisoned the well for legitimate merchants," said Jason Catlett, president of consumer privacy group Junkbusters Corp. "It's very difficult for e-mail marketers to stand out from the crowd of sleaze that assaults the average American."

Internet marketing company DoubleClick Inc. (Nasdaq:DCLK - news) said in a report that the average revenue generated per retail or catalog e-mail fell to 28 cents in the second quarter of 2003 from 29 cents a year earlier.

But on a brighter note for retailers, customers were opening more e-mail ads from companies they view as legitimate than before, the study said.

According to DoubleClick, the average order in response to an e-mail ad dropped to $98 in the second quarter from $102 a year earlier. In all, retail e-mail saw an average of 2.65 purchases for every 1,000 e-mails sent out.

Eric Kirby, vice president of strategic services at DoubleClick, said advertisers would not shy away from e-mail marketing due to the slightly lower revenue.

"The cost basis for delivering that message ... is still in the penny range, maybe two pennies, to send that e-mail," he said. "It's still hugely effective compared to other channels."

The data was part of a wider DoubleClick study that was based on two billion e-mails from several hundred clients.

DoubleClick said in its report that more e-mail users were opening messages from companies they perceived as bona fide brands, with 38.8 percent of recipients opening such mail in the second quarter, compared with 37.6 percent a year earlier.

By industry, users were most likely to open e-mails offering financial services at 48 percent. Travel e-mails rose slightly, while business products saw a small decline, as did consumer products.

August 28, 2003 at 09:26 AM in Spam | Permalink | Top of page | Blog Home