Ivan O'Sullivan was irate. Results were disappointing for the e-mail business-to-business prospecting campaign he broadcast in January, and none of the elements of the promotion seemed askew to the veteran e-mailer. He demanded to know how many of the records on the 24 lists he rented were undeliverables.
He was appalled when some of the list providers he dealt with refused to provide bounce-back rates. Worse, a couple of those companies charged him for gross counts ordered, without informing O'Sullivan of how many e-mail addresses were actually delivered.
“What annoys me is I can't do my response analysis because I don't know the bounce-back rate,” said O'Sullivan, vice president of worldwide corporate development at Clearswift Corp., which markets spam-filtering software. “That's the kind of practice I couldn't do in my business — promise 100%, but only deliver 92%.”
But a 92% delivery rate — or less — happens all the time in the e-mail delivery business in both consumer and B-to-B campaigns. A few list providers charge for gross. Others quietly pad the response file to make up for what they assume will be a certain number of bounce-backs. Some vendors inform the marketer of their practices up front. Others do not.
And though some practices, like never letting the mailer actually take possession of a rented e-mail file, have become standard throughout the e-mail space, when it comes to bounce-backs, the e-mail providers, brokers and owners are all over the lot.
Until recently, no one complained much. But now mailers are beginning to ask more questions. And list brokers, whose job it is to answer those questions, are steamed.
“A client asks to reach 50,000 people in the next campaign, the broker does all this research and expects to deliver 50,000, and after it's too late, they deliver 20% less,” said Michelle Feit, president of E-Post Direct, Clearswift's broker. “It's damaging to all parties. It devalues the lists.” E-Post Direct, Pearl River, NY, both brokers and manages e-mail files.
What's the average industry bounce-back rate? Estimates vary widely from 5% to 20% of a file, with some claiming their own lists have less than 2%. Tim Dolan, vice president of marketing at Return Path Inc., a New York firm that cleans prospecting and house files, sets the average at 12%.
But everybody agrees that bounce-backs are inevitable even with the best response files. E-mail is a fluid medium. On the consumer side, people hold two, three or more e-mail accounts and change or abandon them frequently. On the business side, servers go down, auto-replies are switched on, workers change jobs and businesses close. When an e-mail address is completely undeliverable (as when a business is shuttered), it's known as a hard bounce. Soft bounces, which can probably be delivered later, often occur when someone switches off their auto-reply.
Bounces are so commonplace, say some list executives, that mailers are not often told anything up front. Counts and price negotiations are usually enacted verbally.
IDG List Services in Framingham, MA also charges for gross records rented. “I feel my lists are so clean, the bounce-backs are a trace of names,” said president Deb Goldstein.
A confirmation sent out after the mailing details the quantity of addresses sent, not those delivered. IDG's policy is stated in the terms and conditions on each data card.
“There's a tolerable level of undeliverables [2% to 5%] on the postal side. There should be a tolerable level of undeliverables on the e-mail side,” Goldstein said.
But to O'Sullivan, undeliverables may only be tolerable if he's told how many there are. Net name cost based on what was actually delivered would be acceptable, he said.
“I think I'm paying $450 per thousand names delivered, but I'm actually paying more like $520 per thousand when you consider the bounce-backs,” O'Sullivan said. “When 8%, 10% or 12% aren't resulting in leads, that's a lot of money to throw away.”
Feit agrees. “Sent isn't the same as delivered,” she said. She claims her company's bounce rate is less than 1% because the lists are cleaned so often. Bounces and unsubscribes are reported in real time. E-Post guarantees 100% delivery.
“You would be foolish to guarantee delivery [of every record],” Goldstein said. “E-mail is a moving target.”
Worldata charges for every record ordered, too. And the Boca Raton, FL list firm guarantees 100% delivery. It does so by padding the file, and it's not doing anything unusual, according to corporate vice president Jay Schwedelson.
“This has become quasi-industry standard,” Schwedelson said. Worldata sends out 5% to 7% more addresses than were ordered to make up for bounces. The company tells mailers before the campaign that there are going to be bounce-backs, and the post-campaign report enumerates the total names delivered.
This is fine with list owners like Mark Evans, CBS Sportsline's director of direct marketing. What if more addresses are delivered than were ordered? Evans, whose 2.5 million-name e-mail database is managed by Worldata, feels that owners and managers should state that clearly in the report so the mailer can compute his response rate accurately. “The problem is when list owners don't let people know how much was sent,” Evans said.
Most sources agree that padding is common.
“I don't know a list manager who doesn't overdeliver,” said Michael Della Penna, COO at Bigfoot Interactive, New York.
But some complain that too many of these decisions are made behind the mailer's back. “Ethical issues come in when the provider pushes more names than the mailer ordered, but doesn't tell the mailer they are doing that,” said Jeff Moriarty, director of sales and marketing at Decision Maker Media Management (DM2) in Chicago. In response to such doubts, Schwedelson retorted: “You are not doing anything wrong. What you're doing is ensuring delivery.”
Another complaint is that well-targeted promotions can't be easily beefed up. Demographics, interest and intent to purchase are frequently requested when lists are rented. With B-to-B files, marketers generally choose a number of selects.
Statlistics Inc., Danbury, CT, charges for net records delivered, but doesn't always disclose its intention to pad.
“The only time we tell them up front about padding is when it's outside of the criteria [they ordered], and it will affect their results,” said interactive coordinator Dolores Broderick.
All padding is wrong in O'Sullivan's book. “I don't take all the names available on the list. I spend a lot of money and time thinking about selects and tracking those responses,” he said. “A list owner would have names they had selected for me, not the names I had chosen.”
Better list hygiene would bring the bounce rate down, right? Not exactly. It would improve it, but there's always going to be some level of bounce. How much depends on the way the names are collected — qualified business publications have lower bounce than Web sites where people register to receive third-party offers. Double opt-in records will have fewer undeliverables than single opt-ins.
“If your bounce rate is less than 5%, you're probably doing a good job cleaning your file,” Return Path's Dolan said.
Good hygiene includes algorithms that scour records thoroughly, check for and correct proper syntax in the address (such as if there are two @ signs, or if the dot is left out). They look for common typos after the @ sign and ensure that the domain address is active and receiving e-mail.
Many list providers check for these culprits, but don't set them right. Others don't clean often enough; if it's done at least each time a file is updated, that will help achieve low bounce-back rates. Some list owners feel it doesn't pay to clean their e-mail files, but that's bound to change as response rates decline, brokers assert.
“The list owner eventually will be rewarded or punished,” said John Murphy, senior account executive at Rubin Response Services Inc. “The list that performs well is going to be rented again.”
