Expanding Email Marketing in the EU

Just as 2000 marked the Internet’s coming of age in Europe, it looks as though 2001 could herald the expansion of international email marketing throughout the European Union (EU).

Brady Brewer touched on this subject in a ClickZ article a few months ago before it was determined that the EU had stifled global email marketing by the passage of a stiff e-commerce law.

Effective March 1, 2001, this law states that when there is a dispute between a consumer and an online retailer in any of the 15 countries in the EU, the consumer may file a suit in his or her own country.

Sounds fair enough, but to promote an international email marketing program in the EU under the new law, one must have a physical presence in the targeted country. Yes, you read that correctly. It means that even though you can design your own marketing strategy, it now must be carried out by an EU-based company.

This is not good news for small businesses, which prefer to maintain control of their own direct email marketing campaigns and sell goods and services on their own Web sites according to the rules of the country in which they are based.

In such an atmosphere, with one law already in effect and another impending, much uncertainty reigns among small e-marketers. If a consumer from outside our home market sues us, what is the probable cost of insurance and legal protection? None care to contemplate, not even the big guys with offices in the EU countries.

The leading email marketing services venturing into Europe are NetCreations, MessageMedia, and 24/7 Media through its 24/7 Europe. In fact NetCreations was recently acquired by the Italian-based Internet service provider SEAT Pagine Gialle S.p.A. in Milan and will continue to be managed by Rosalind Resnick, chairperson and CEO.

What’s the Secret to Expanding Internationally?

I interviewed Richard Hurwitz, vice president of corporate communications at MessageMedia, to find out where the company is going globally.

MessageMedia is currently taking international orders for the United Kingdom, Sweden, Holland, France, Germany, Italy, Spain, Australia, and New Zealand. The expansion process has been the result of agreements solidified with eVentures and @viso (the latter being an October joint venture between Vivendi and SOFTBANK to tap into the European market).

In Australia and New Zealand, a special joint-venture arrangement limits its full messaging marketplace capabilities. In the case of the EU territory, MessageMedia formed an entirely new enterprise called MessageMedia Europe.

“We also have a 30-man operations facility in Switzerland, which serves as our hosting center,” Hurwitz said. “With the new laws recently enacted in the EU, the minimum standard is that a company must have a physical presence in a foreign country in order to do any type of international opt-in email marketing or messaging campaign within that country.” (Hmm, I thought, the small to midsize enterprises are going to have a tough time with this.)

I asked him, “What should a small business do?”

He answered, “Typically, we service clientele that has lists readily available of a minimum 100,000 names. In the case of a small business we could conceivably handle a list as small as 25,000 and still make it work and be affordable for the client.”

I thought about all the small businesses that most likely don’t have a list of 25,000 names and questioned Hurwitz as to what they could do or where they could go. Naturally, he wanted to keep promoting his company, saying, “They could buy into our MailKing program for $250, but even that might have limitations on an international basis. Second to that would be to go direct to a company overseas that has the capabilities.”

What’s a Big Business to Do?

If you’re a big company such as Yahoo or America Online, one strategy would be to find in the country where you want to do business a company that does something similar to what you do and form a joint venture with it, partner with it, or acquire it. Even 24/7 bought a majority stake in London-based InterAd Holdings Ltd., an international Internet advertising sales firm, renaming it 24/7 Europe. I believe it’s a rarity for a U.S. company to take its business model, start from zero in a foreign country, hire locals to run the operation, then begin an international email marketing campaign.

What’s a Small Business to Do?

If you’re a small business, I recommend searching the Internet, first looking for a list broker, then for an opt-in email marketer (or a combination of the two) that covers the territory you want to reach. After that, conduct a thorough due diligence by checking a variety of references.

• Try European search engines, directories, and lists.
• EmailPro, based in the U.K., claims to help build relationships through personalized, one-to-one communication. Its stated mission is to enable your business to communicate with each customer at a personal level, thereby keeping you ahead of competitors lacking this capability. It offers emailing marketing, opt-in email lists, email etiquette, and database security. If you are exploring an international email marketing campaign that targets the U.K., this may be the place to get started. A word of caution: Be sure you can deliver in the EU whatever you are promising in your email marketing.
• European Union Internet Resources is offered by the University of California-Berkeley library. This site is jam-packed with government and social science information pertaining to the EU.
• Central Europe Online is a global, online community that covers Croatia, the Czech Republic, Hungary, Poland, Romania, Slovakia, Slovenia, and the Balkans.
• The European Union in the World offers a more comprehensive look at the territory.
• European Union in the U.S. features a link called A to Z Index of European Union Websites that offers just about everything but the kitchen sink on EU activities.
• Europemedia.net is the information hub for Europe’s new media.
• TNS Interactive Global e-Commerce Report provides an overview of what’s happening worldwide on the Internet, allowing one to view country-specific results with a pull-down navigational bar at the left of the report. Even though the data I saw was five months old, one can glean useful stats, such as percentage of Internet users in countries around the globe — valuable when determining whether to offer a service or product in any location.