The From Line

Sending, Managing & Monetizing Email

How Does $0.02 = $2,400,000?

I'm convinced that Jupiter's prediction of a $1.2 Billion market for email marketing by 2008 (I think this stat is correct) is low.  I continue to hear small businesses say they are dumping their postcard marketing for email because the ROI on postcards and other snail mail marketing aren't worth it anymore.  What's driving the downtrend?  A lot of things!  What's going to force this trend off a cliff?  Energy!  The increase in energy prices will continue to force postal rate hikes leaving no choice for smaller businesses to search for other marketing mediums.  

Smaller companies are not alone.  Even though larger companies can absorb postal rate increases they won't sit idle long. 

Just think about this Scenario:

Credit card company A sends 10,000,000 statements First Class bulk mail per month at a cost of $0.29 per statement for a Total Monthly Postage Cost of $2,900,000.

Congress approves a $0.02 postal rate increase

The new Total Monthly Postage Cost is $3,100,000 a $200,000 increase.

Total Annual Increase $2,400,000

That's big bucks.  A simple two cent increase can cost a company $2.4M in postage.  Email is starting to look very good for big companies.  I think this market has a lot of growth behind it.

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Supreme Court Refuses To Hear White Buffalo Ventures Spam Case

Buried amongst stories on the Alito hearings today the Supreme Court refused to hear an appeal from White Buffalo Ventures regarding its suit against the University of Texas. The Court upheld the 5th U.S. Circuit Court of Appeals decision allowing the University of Texas to adhere to its network and email policy by blocking unsolicited email, including those sent by White Buffalo Ventures to University students and staff. Even though White Buffalo Ventures' email solicitations conformed to the CAN SPAM Act and obtained the targeted email addresses legally, the courts decided that UT had every right under the First Amendment to block such solicitations from entering their network.

What does this mean for email marketers? Absolutely nothing! We all know that ISPs and network administrators are the world's email gatekeepers and the best way to improve deliverability is not to sue them. I guess White Buffalo Ventures got duped by some unscrupulous attorney into spending their money on something they could have found out with a few simple Google searches.

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My Prediction for Commercial Email If Sender ID is Accepted – A Windfall for Email Marketers And Price Descrimination For Consumers

For those of you who define spam as a commercial email sent from a legitimate company help is on the way. Large ISPs such as AOL, Microsoft and Earthlink have been pushing the adoption of Sender ID technology which authenticates that email sent to your mail server is from a legitimate Internet domain and one that has not been forged in the mail's header. This is the most promising technology to date for stopping all the solicitations for diet pills, mortgages and body enhancement drugs since these are the types email solicitations that usually contain false domain information. Sender ID technology can also give an ISP, corporate network admin or even an individual an easier way to block all information from a particular company.

As an email marketing executive, I applaud Sender ID technology and can't wait for it to be accepted and implemented. My reason for being pro Sender ID is simple LONG TERM economics. Sender ID technology should eliminate most of the hucksters and fly by night companies and decrease the volume of email sent in general. In addition, many consumers will opt not to receive any type of commercial email easily taking advantage of the technology's power. With a decrease in the supply of email that makes it to a recipient's inbox, the more apt consumers will be to review and respond to legitimate commercial email. When the medium starts experiencing better response rates, the more valuable my products and services will become, allowing me to charge higher prices for volume being sent through my system.

At first glance this seems like a great for people who consider all commercial email to be spam. But in the end consumers who opt not to receive any commercial email will become the biggest losers in the spam game. My rationale for this is based on the fact that companies and marketers will reward consumers who have a lower cost per acquisition or a lower cost to market to and punish consumers who make them jump through hoops to communicate with them. Lower prices will come in the same format as they do offline; coupons, rewards programs and preferred pricing. The simple fact is that the incredible efficiencies email and other Internet technologies affords are too great for companies to ignore even if it means ticking a few consumers off by sending unsolicited commercial email.

Just keep this in mind. In five years from now long after Sender ID has been accepted and implemented, if you have turned a blind eye to the commercial email world don't get upset when your neighbor has 100% of his vacation paid for because his frequent flier's miles program decided to give him some extra points for receiving some spam.

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