E-Mail Appender Enters Change-of-Address Market

TowerData, a New York-based firm best known for its email append service, is branching out by launching an email change of address (ECOA) service dubbed “E-mail Update”.

With the move, TowerData, until recently known as Eppend Inc., joins the small list of players in the space, such as Return Path and FreshAddress. ECOA services are aimed at helping marketers overcome one of the more frustrating aspects of email marketing — undeliverable email addresses.

A study by NFO Worldgroup, which was commissioned by Return Path, found that 32 percent of email users change addresses every year.

“E-mail Update” requires marketers to send TowerData a list of their undeliverable email addresses, which the company then compares with a list of changes compiled via its network of more than 20 Web sites. The company says only the addresses of people who have agreed to receive messages from third-party marketers are included in the comparison. When matches are found, a message is sent to the new address, asking the recipient if it’s OK to provide the new address to its client.

The methodology — which TowerData is trying to patent — differs from other players, which instead request that Internet users go to a central site to update their addresses.

“It takes a lot of money and a lot of effort to get people to go to a central place,” says Tom Burke, president of TowerData. “We’ve been able to get a lot more data more quickly. We’ve done a couple of beta customers so far and we’re having a match rate of about 5 percent.”

E-mail change of address services, along with TowerData’s other line of business called email append, are not without controversy. Although companies using these services have an existing relationship with the person for whom they’re seeking current email addresses, the individual hasn’t specifically given that company authorization to use that email address for marketing.

TowerData argues that the email addresses it appends and updates are those of people who have agreed to receive messages from third parties, so it doesn’t matter who the messages are from. Additionally, the recipients are given a chance to opt out.

The practices, however controversial, are becoming more popular, as more traditional marketers — which already possess vast databases — migrate their direct marketing practices online. The tough economic climate, in which businesses are struggling to hang on to and strengthen relationships with existing customers, adds to the interest in such services. Getting these email addresses, after all, allows marketers to reach people who have already expressed an interest in their products, which, presumably, would result in a better conversion rate.

“Given the current market climate it is necessary now more than ever for email marketers to stay in touch with their customers and cultivate accurate customer lists that provide greater reach and increased ROI,” said Burke.

Return Path, with investors such as online advertising giant DoubleClick and clients that include the United States Postal Service, is seen as the leader in the ECOA space. For rival TowerData, this represents the first of the new lines of business it intends to develop. The company changed its name from Eppend Inc. at the beginning of the year, in an effort to reflect its expansion plans.

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