Do You Gmail?

“What should we do about Gmail?” Over the past several months, more and more marketers have posed that question. Google is emerging from its stellar IPO and quiet period flush with cash, a $30 billion dollar market cap, and a respected, sometimes revered, consumer brand. It also has a new free email service.

Will Gmail’s 1 GB of free storage and integrated search capabilities quickly capture consumer interest and market share? Will Gmail become the new Yahoo or face still more scrutiny from privacy advocates, higher state and federal legislation hurdles, mounting competitive pressure, and a backlash from marketers concerned about protecting their marketing relationships from prying competitors?

One thing’s certain: The landscape’s shifting. Marketers must prepare and be proactive in addressing Gmail’s challenge. With the service still in beta, Google’s competitors are already reacting. Recently, Yahoo announced an increase in its free storage to 100MB.

Market pressures come to bear as well. In June, Google amended its IPO filing detailing the need:

to address privacy related concerns and future proposed legislation by educating the public and legislators about the Google products and services, and by working closely with legislators to craft laws that are not overly broad.

Could there be a chink in Google’s armor? After all, Gmail is a new email player. Perhaps lessons must be learned.

Key questions include: How big is Gmail’s current user base? How are those users reacting, and what kinds of feedback are they offering? How will those contextual ads work? What’s the status of whitelisting, HTML rendering, and bug fixes? Most important to this column’s readers, how should marketers build a Gmail strategy and optimize Gmail communications? Should these consumers be considered yet another market segment, as many consider AOL subscribers?

To Gmail or Not to Gmail?

How best to market to Gmail domain customers? Given Gmail’s competitive ad-serving capabilities, some marketers who are protective of their modeling expertise and customer base will simply refuse Gmail domain addresses. Others embrace the new domain as just another segment and marketing challenge (or opportunity). All marketers should work to build internal consensus on their strategies now.

If you elect to refuse Gmail domain addresses, how will you communicate that to the consumer? Should marketers request two email addresses from customers and prospects?

A major credit card issuer excels at attracting a particular market segment. Gmail offers that company’s envious competitors the opportunity to specifically and efficiently target that issuer’s customers with contextual ads. The marketer spent millions growing this segment; should it be protected? Use and effectiveness of balance transfer offers, escalating reward perks, and more make this a challenging and interesting opportunity — or threat — depending on your perspective.

Strategies may vary by industry and brand, yet these tough, thought-provoking questions must be addressed as marketers prepare for potential Gmail fever. Questions to ask before approaching your management:

• What messaging and segments will be affected?
• How valuable and vulnerable are various customer segments?
• How loyal are customers?
• How effective has the competition been to date?
• What competitive offers would potentially be served and how likely are customers to respond?
• What are potential return on investment (ROI) implications of marketing, or refusing to market, to Gmail users?

Assessment

How popular will Gmail be? Some experts predict it will account for 5 percent of the average list in short order. In my opinion, Gmail’s success will be directly tied to customer satisfaction, reaction, and understanding of the value of the service (nothing in life is free: trading storage for privacy); not to mention the competitive reaction and market pressures.

Marketers require intelligence. Be smart about what data you control. Run a domain analysis to determine if Gmail has already affected your email campaigns. If a sizeable number of customers use Gmail today, take the opportunity to communicate with them. What are their needs, interests, and satisfaction? Depending on list size, you may get a great head start understanding customers’ feelings to inform your internal strategy.

Testing

If Gmail becomes the force many believe it will, you’d better understand the product. Get a Gmail account (admittedly, not so easy at present — you have to know someone) to learn the features, functionality, advantages, and disadvantages of the product.

Begin testing. Test current communication efforts to look at rendering and competitive ad serving, which can affect existing communication streams.

Use Gmail as your customers will. If you’re a retailer who relies on forward-to-friend and viral capabilities to increase overall ROI, test Gmail to understand how it will affect these campaigns.

Catalog your experiences. Detail concerns, bugs, and observations. Discuss them internally and with your email service bureau, if you use one. Many larger email service bureaus are preparing as well, writing creative coding specs and meeting with the Gmail team to further understand the rules of engagement and to help marketers optimize efforts within the Gmail environment.

Privacy: The Wild Card

Privacy and legislation developments will continue to concern Google, marketers, privacy advocates, and consumers. California’s legislature began addressing concerns specific to Gmail almost as soon as the service was announced. The state proposed a bill (SB 1822, already watered down) focused on limits around Google’s use and storage of email.

A few folks have begun to assess Gmail’s implications on existing legislation, such as the Gramm-Leach-Bliley Act. The law addresses financial services obligations as related to protecting and safeguarding access to consumer information. Whether this becomes a future issue remains to be seen; I’ll leave it to lawyers, privacy advocates, and legislators.

For now, prepare. Become informed and make a plan. The market will determine Gmail’s success. Like so many experiments before it (remember free PCs?), Gmail will ride the wave of innovation and newness. Ultimately, it will be judged on its on merits, based on its ability to understand and react to its market and competitors and to satisfy various constituencies.

Till next time,

Al DiGuido