Spam v. Profit

An e-mail marketer makes the case that spammers are cutting their own throats, commercially speaking. The fact is, while people hate spam, they love e-mail advertising—when they've asked for it. ISPs who adopt a responsible approach will profit in the long run.

Things are getting interesting in the world of e-mail and spam. Nearly every Internet Service Provider or marketing trade magazine has headlines about one group suing another group, someone calling someone else a spammer and some ISP blocking messages from one domain or another.

Believe it or not—I know this will come as a surprise—it's all about the money.

Yesmail v. Vixie
For example, a couple of weeks ago the e-mail marketing company Yesmail.com was awarded a temporary restraining order issued against the Paul Vixie's Mail Abuse Prevention System (MAPS), stopping the group from placing Yesmail on the Real-time Blackhole List (RBL).

In an interesting turn of events, just when we thought MAPS had finally gotten the lawsuit they'd been begging for, the group decided to settle the lawsuit out of court. Yesmail agreed to adopt closed-loop "double" opt-in registration system and MAPS backed away from its demand that Yesmail immediately reconfirm each address of its current e-mail listing. MAPS blinked because it would have cost Yesmail and parent company CMGI millions of dollars in lost value; too high a price to pay for it to lose without a huge court battle.

Harris v. Everyone
Next, Harris Interactive, one of the largest online opinion polling companies around, gets listed on the RBL. It decided to not only sue MAPS, but also Juno, Microsoft, Netscape, America Online and everyone service provider of consequence that blocked Harris' e-mails polls from being delivered.

If you've followed the issue in the press, Harris CEO Gordon Black claims one of his competitors is behind its being listing on the RBL and that MAPS failed to work with Harris to address their competitor's allegations. Black is so angry, he's even calling for congressional action. It's been my experience than CEO's do not call on Congress for help unless they're about to lose their shirts.

Congress v. Spam
Speaking of Congress, last month the U.S. House of Representatives passed H.R. 3113, an anti-spam bill that would empower ISPs and individual e-mail users to sue spammers for a variety of violations, including sending spam to the customers of ISPs that have a posted "no spam" policy.

It's a good bill that balances the needs of the consumer and ISPs with those of e-commerce companies direct e-mail marketing programs. But it has a long way to go. Now the bill must survive the well-funded lobbying efforts of the Direct Marketing Association and other pro-spam forces as it oozes its way through the U.S. Senate. Unfortunately for Mr. Black and the rest of us, this is an election year and very little is likely to happen soon.

ISPs v. Change
What does all this mean for ISPs, e-commerce, and e-mail users? It means that the rules and policies governing the appropriate uses of e-mail are being formulated as we speak. It means that the ways marketers may be allowed to use e-mail will eventually be decided either by Congress or the Courts. It also means that many ISPs are going to have to change the way they think about e-mail marketing. It's not all spam. In fact, when e-mail is requested by a subscriber, it's not called spam at all — it's called content.

Remember, the race goes to the swift. And in this case, the swift will be those who beat the courts and the lawmakers to the punch by adopting appropriate changes in their business models, changes that reflect the reality to come, changes that reflect the potential value that opt-in e-mail can bring.

Change is already happening on the e-marketing side of the equation. For example, responsible e-mail marketers are adopting double opt-in registration procedures for customers. These same companies are actively and publicly denouncing the pro-spam position of the Direct Marketing Association. Some marketeers are even trying to organize a new trade association that represents their consumer-friendly, anti-spam approach.

Many of these same companies are joining the legislative fight against spam by supporting bills like H.R. 3113 because it is in the best interests of their customers, their clients, and their companies to have a clean, permission-based e-mail channel. ISPs also need to recognize and promote the value of this permission-based marketing model if they are going to protect their interests and the interests of their subscribers.

Why? Because in the end, there will be e-mail advertising, it will be permission-based and ISPs will not be allowed to make arbitrary decisions about what e-mail is acceptable and what e-mail is not. Instead, new laws and court decisions will force ISPs to adopt legally defensible policies concerning appropriate and inappropriate e-mail marketing practices — and if they are smart — those policies will lead to new revenue generating opportunities.

Spam v. Profit
Forrester Research predicts that the e-mail marketing industry will grow to 4.8 billion dollars by 2003. That's a big chunk of change, and ISPs that continue to fight the battles of the past will be left out, while their competitors step up to the table and get their cut. There is a reason AOL is fighting spam and it isn't about customer complaints. Any AOL user can tell you that. It is because permission-based e-mail marketing can be a consumer-friendly way to add content and functionality while creating substantial new revenue.

Consumers hate spam, but they love e-mail. And study after study shows that they like getting marketing materials via e-mail, provided they asked to get it and it interests them. This consumer desire for permission-based e-mail creates a wonderful opportunity for ISPs. Service providers can give their subscribers the content they want and get a share of a new revenue stream, but only if they look past the headlines and prepare for the future.

—End

Executives Perspectives is a new Orbit designed to lend a voice to industry leaders that elect to put their opinions online. ISP-Planet publishes the weekly articles, analysis, and editorials contributed by executive officers charged with operating an Internet service. Please e-mail the editors with any questions or comments.