Marketers Mixed On AOL-Goodmail Plans

When America Online shared its plan to eliminate its free, merit-based whitelist in favor of a paid certification service for commercial emailers, it was met with criticism from many quarters. After backpedaling and recasting the CertifiedEmail service provided by Goodmail as an optional add-on to its existing Enhanced Whitelist, stakeholders are still divided on the potential effectiveness and wisdom of the move.

“New and improved ways to increase the deliverability of email are always a good thing. The harder question is whether marketers will embrace per-message-fees as high as the ones that Goodmail has proposed. Frankly, I’m skeptical that the prices I’ve seen will result in widespread adoption,” said Bill Nussey, CEO of email service provider (ESP) Silverpop.

AOL and Goodmail haven’t shared specific pricing for the service other than to say it will cost “a fraction of a cent” per message. AOL will share an undisclosed portion. Both companies have said they would offer first-year discounts to early-adopters to raise awareness of the program’s benefits.

Goodmail CEO Richard Gingras has said costs will be more than offset by the ROI generated by assured delivery and improved open- and click-through rates. If the program can deliver on that promise it should be viewed positively, says Lou Mastria, VP of interactive and emerging media at the Direct Marketing Association (DMA).

Whether it makes sense for an individual marketer depends on whether the program affects customer actions. “ROI will continue to drive the decisions that marketers make in this space because of the email channel’s inherent and direct accountability,” Mastria told ClickZ.

Some marketers, especially ones spending time and money to improve their email sending, view AOL’s plans as a denial of the value of their good behavior.

“When they were talking about discontinuing the Enhanced Whitelist, it was scary,” said Heather Palmer-Goff, director of deliverability and ISP relations at Responsys. “Marketers who had worked to reduce their complaints and bounce rates were feeling like they were being penalized for doing the right thing.”

Now that the Enhanced Whitelist is staying, some marketers see opportunities, she said. “They’re starting to think about what it means to bypass volume and content filters and not having their messages end up in a black hole.”

Nussey believes Goodmail’s ROI models makes sense if deliverability is a real challenge. For marketers who are already get good results the value isn’t so clear.

“Most of our clients are getting 95- to 98-percent deliverability today. Getting that last 2- to 3-percent into the inbox with links and images intact may not generate enough incremental response to justify the kinds of pricing I’ve seen proposed,” Nussey said. “We’ll all know a lot more when we get a chance to use the Goodmail system and see how it affects response rates in a real world setting.”

The senders who will likely benefit, even if the cost is higher, are those sending transactional messages such as receipts and alerts, Nussey believes. Most marketers will likely continue to rely on AOL’s free whitelist programs.

Despite the relatively low per-message cost, other hidden costs may be significant, according to Jeanniey Mullen, director of email marketing at OgilvyOne Worldwide. The cost of educating clients could be higher than the costs of the service itself, she opined. For large organizations, both the agency and client will be impacted by the time it will take to determine if the potential return will outweigh those costs.

“I see this as a generally negative decision for marketers, especially in the short term,” Mullen said.

Mullen says AOL addresses comprise 30 to 40 percent of an average B2C client list, and 5 to 10 percent of B2B lists. The proportion of Yahoo addresses is similar, so if Yahoo’s expected Goodmail implementation follows a similar paid model, over half of addresses on many marketers lists will be affected.

The added message costs will impact sophisticated marketers the most, thinks Mullen, such as those who have designed trigger-based email programs, use transactional messaging, or have subscription verification programs. Higher costs could change their email strategy.

“While [CertifiedEmail] is seemingly nominal in cost, these marketers could see budgets rise by a not-so-nominal fee. That could push strategic contact flow design into reduced frequency messaging designed only to meet budgetary constraints,” Mullen said.

Increasing the cost to send email isn’t a problem in itself as it’s low to start with, Mullen said. Paying more to send would help validate email as a marketing channel, and may make marketers more disciplined in campaign planning.

“Many companies I’ve worked with find it much too easy to be less selective in their list pulls because it’s so cheap. A longer-term approach to this could increase relevance and improve results fairly significantly,” Mullen said.

Goodmail’s per-message pricing model has led many critics to label the program as email postage. Goodmail’s competitors take a different approach. Whereas Goodmail’s fee affects only a single message, consulting and monitoring services from Habeas or Return Path’s Bonded Sender improve a sender’s email practices overall, so senders potentially see benefits across ISPs and receivers. Both approaches have strong followings. This leads some to criticize AOL’s decision to force senders to choose only one.

“We can debate the merits of Habeas vs. Goodmail, but for us, it really boils down to choice,” said Des Cahill, CEO of Habeas. “It’s OK for AOL to offer premium services, and it’s OK for Goodmail to bring a product to market, but senders should have choices.”

When an ISP as large as AOL introduces any kind of policy change, there’s bound to be some level of backlash. Anne Mitchell, president and CEO of the Institute for Spam & Internet Public Policy (ISIPP) says larger ISPs are viewed by many as akin to public utilities or government agencies.

“They each have a constituency that has come to expect certain services, but they also have to deal with bad actors. Any time a government or ISP makes a change or announces a business relationship, there’s going to be an outcry,” Mitchell told ClickZ.

A move toward paid guarantees for email delivery and other implementations of reputation and accreditation services is a significant paradigm shift, notes Dave Lewis, VP of market development at Strongmail.

“It’s one thing to talk about these things in general, when there’s no risk involved. It’s another thing entirely when it comes time to implement them,” he observed.

Implementing reputation services is the second part of a two-step process, originally laid out by the E-mail Sender and Provider Coalition’s (ESPC) Project Lumos in 2003. It began with email authentication efforts, including SPF, SenderID and DomainKeys. Whereas authentication attempts to identify who a sender is, reputation and accreditation services aim to hold the identified sender accountable for his actions.

“At the end of the day, what’s important, and where there’s some commonality between senders and receivers of email, is the satisfaction of the recipient. The primary driver of any program like this should be customer satisfaction,” said Lewis.