Pay Me Now, or Pay Me Later

  |  July 1, 2004   |  Comments

Sooner or later, senders will have to pay for commercial e-mail delivery. Sooner is preferable for everyone involved.

Several years ago, a muffler company had a slogan directed at customers in denial about loud sounds coming from their cars. "It's up to you; you can either pay me now, or pay me later."

A flurry of activity has surrounded recent announcements from the Federal Trade Commission (FTC) regarding the issue of spam reduction and the Anti-Spam Technical Alliance's proposal. The proposal states the major ISPs have agreed in principle on an email authentication standard. Amid all the excitement, I worry we're once again raising consumer expectations. They're in danger of believing a panacea will cure all spam-related ills, as with California's SB 186 and the CAN-SPAM act.

Don't get me wrong. I wholeheartedly applaud the work that's been done by the Direct Marketing Association (DMA), FTC, and ISPs to create laws, standards, best practices, and agreements to address spam. Despite these good intentions, a poll of friends and colleagues reveals the problem hasn't gone away. In many instances, it's only intensified. My contention has always been the relationship between marketers and the email communications channel must mirror that between marketers and virtually every other communications channel in our economy.

A step in the right direction is the Sender Policy Framework and DomainKeys proposals that serve to verify and authenticate senders. Both solutions parallel "authentication standards" in other media. For example, prior to running any advertising, a media outlet reviews incoming advertising to ensure the message meets AAAA standards and the organization is legitimate. Consumer protection laws allow media outlets to refuse advertising messages for a wide variety of reasons. The promise of email authentication is a checking system that can help prevent fraudulent email from entering your inbox. It will make a significant impact.

Each day, the major ISPs block billions of messages. Routinely, these blocks inadvertently redirect permission-based, opt-in email to the equivalent of a dead letter bin. To protect subscribers from nasty, unsolicited mail, ISPs reason some legitimate communications must inadvertently be sacrificed.

Such a practice would never be tolerated in other communications channels. Imagine if the postal service discarded your mail because your mailbox was full or you didn't check it for several days, or if your friendly letter carrier decided to only deliver mail he deemed appropriate or necessary. Consumer advocacy groups would never allow it. We'd see picket lines and petitions. Then again, the post office is a common carrier, regulated by the government. ISPs aren't. That has pros and cons, which we'll save for another column.

According to the U.S. Department of Labor, "The advertising and marketing industries in our economy spend over 90.31 billions of dollars each year and employ nearly 500,000 people. Of all industries in our economy, the advertising sector contributes 2.13% of the Gross Domestic Product (GDP)."

Marketers and advertisers are accustomed to working with advertising agencies, agents, brokers, media outlets, Web sites, and ISPs to secure contractual pay for relationships that provide them access to us through our TVs, radios, magazines, newspapers, doctors' offices, grocery stores, online connections, and so on. Advertisers and marketers understand a constant negotiation for media space; it's in their DNA.

Consumers, advertisers, and marketers alike want clutter-free environments. Let's give that to them. I've said it before, and I'll say it again. The solution for the spam problem is a combination of legislation, authentication, and financial barriers: a digital postage stamp.

The major ISPs have a tremendous financial incentive to erect a financial barrier to their domains and customers. I don't begrudge them this revenue; I'd even write the first check. AOL, MSN, Yahoo, and the others are all businesses. They answer to boards of directors and shareholders. The cost of dealing with spam is significant in terms of infrastructure and bandwidth. They have every right to charge marketers for access to their domains. Banners, buttons, and sponsorship units define their sites' landscape. Only the naive would believe an ISP could continue to provide all these services without recouping costs and generating profits from paid advertising.

Google's Web-based Gmail, with its keyword advertising system, is already starting to figure out a financial model, but with a different approach. Perhaps this experiment in creative thinking is the start of things to come. Legitimate marketers should work closely with ISPs to build a financial barrier to spam that makes sense for all parties involved while considering all legal and free speech arguments.

Most marketers would love to believe lunch is free. However, they're resigned to the fact that to remove spam from inboxes and provide a more fertile advertising and communications environment for their messages, the medium must be governed by the same rules as other measured media. For those worried every sender will pay for every message, rest assured such a system would provide a sliding scale of rates and fees that would pertain exclusively to commercial senders based on message type and volume.

We do a considerable amount of analysis for clients regarding the return on their email investments. E-mail communications continue to be the most incredibly cost-effective medium for generating incremental sales and profits. Working in concert with other media, email is a powerful tool to reach consumers in their preferred medium. The effect of a small surcharge attached to each message would be insignificant on the return on investment (ROI).

Conversely, a financial barrier would finally rid inboxes of "marketers" who aren't CAN-SPAM compliant, don't adhere to email authentication standards, and aren't willing to pay for placement. As such, the environment for reputable, standard-adhering, paying marketers would dramatically reduce the amount of spam.

As ISPs rid their email channels of the unsolicited, fraudulent communications that detract from reputable communications, access to their domains will become more valuable for marketers. Marketers will reward the ISPs for this work. Clutter in any medium wreaks havoc for all parties because it reduces consumer interest and action. Consumers will greet spam-free inboxes with enthusiasm and become more active and interested in the messages they request.

It's time for everyone involved in this channel to build the monitoring systems to manage the assignment and collection of the email fee schedule. I applaud the willingness of the major ISPs' technology teams for their commitment to building an authentication standard.

We ask they take it to the next level. We need the CEOs, CFOs, and financial teams to agree there's a revenue opportunity available in conquering the spam problem and to recognize the same marketers who advertise virtually everywhere else would be willing to pay for this medium, either now... or later.

Till next time,

Al D.

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ABOUT THE AUTHOR

Al DiGuido

Long recognized as one of the direct response industry's premier innovators and a pioneer in e-mail communications, Al DiGuido brings over 20 years of marketing, sales, management, and operations expertise to his role as CEO of full-service digital marketing company Zeta Interactive. Formerly Epsilon Interactive's CEO, DiGuido also served as CEO of Bigfoot Interactive, CEO of Expression Engines, EVP at Ziff Davis, and publisher of Computer Shopper, where he launched ComputerShopper.com, a groundbreaking direct-to-consumer e-commerce engine. Prior to Ziff Davis, he was VP/advertising director for Sports Inc. DiGuido also serves on the Direct Marketing Association's Ethics Policy Committee.

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