Dead and Responding Quite Well
Remember the maxim about absolutes? A person can’t be sort of pregnant or a little dead. When it comes to Internet marketing, however, you may have noticed many of the usual rules don’t apply. Opt-in e-mail is dead, say some list professionals and marketers – but that doesn’t mean it’s not alive and well, and working fine for some others.
Opt-in e-mail files are built from customers taking an action to be on a list, often by checking a “yes” box on a Web site. With permission-based negative-option lists, customers are already on the file and may remove their names by unchecking a box or checking “no.” If they do nothing, that implies permission. The common attribute of both methods is that the site visitor is told in clear language, on an early screen during the registration process, how their information will be used. Opt out puts a name on a list without permission.
“Opt in is dead because permission-based methods are just as legal and work just as well,” says Michelle Feit, president of Edith Roman-affiliated E-Post Direct of Pearl River, NY. “My proof shows that it’s working fantastic.”
Feit’s says that her proof is Catelogs.com, a file of 500,000 names that is the newest addition to her company’s management roster. Advertisers renting the list enthuse that it is producing response rates of 3% to 40%. “Response is related to the quality of the names on the list,” Feit admits. “There’s a philosophy that opt in will get you higher response, but this list is showing that permission based can get you a very high response, too.”
Catelogs site visitors give their names, addresses and e-mail addresses, along with the types of catalogs they wish to receive. They take no specific action showing they agree to opt in to the list. Rather, a privacy statement appears on the screen as they register that says: “From time to time, we will use all information entered in our Web-based forms to target appropriate information to you…only [what] is relevant to your needs.” Consumers may unsubscribe from the list when they receive their first e-mail ad.
The Association for Interactive Media, a trade association for Internet companies, recommends its members use the opt-in method because the response rate is much higher, says Ben Isaacson, who is acting executive director of the Washington, DC group. Nevertheless, he acknowledges, “Any level of permission marketing gets good response rates. The difference between permission based and opt in is maybe 2% or 3% response.”
Deb Goldstein, president of Boston’s IDG Communications List Services, agrees with Feit that the opt-in method is not vital. Most of IDG’s 23 business-to-business e-mail files are negative-option.
“You’re still asking permission, but from a list-management perspective, you gain more names and have more names to sell this way,” she points out. Comparing the performance of these lists with those she manages that are strictly opt in, Goldstein observes, “I don’t find the response rates any different.”
Still, rates could be uniformly positive at IDG because all the lists are computer-oriented publishing files used for b-to-b marketing and are, therefore, extremely well targeted to the customers. Rates also may be high because Goldstein is an e-mail old-timer, one of the first to market such lists three years ago. “We’ve been doing it for long enough that our customer base at this point is used to the process and they respond,” she admits.
Plus, people who complain that they don’t remember how they got on a list get a personal phone call from Goldstein. Flames are rare even among this population that invented flaming.
Most lists are not as predictable as IDG’s. Opt in and opt out are vague terms, defined differently by various parties, complain managers and brokers.
“Every time you are reviewing a list that you’ve never mailed before and [the broker says] it’s opt in, you have to ask what is meant by opt in,” cautions Eric Zilling, president of ALC Interactive in Peterborough, NH.
“It’s the responsibility of the company mailing the lists to know what the definition of opt in is for that list owner,” adds Zilling.
As important is that the mailer know for what the people listed have given permission. “If Java programmers give permission to receive Java programming data, do you have the right to send them a credit card offer?” Zilling asks.
Bryan Crowell, of list compiler Nuos Corp. in Los Angeles, is an opt-in convert. A year ago, he was cleaning up with strongly performing b-to-b computer files compiled by telephone interviews. The opt-out 10,000 name Channel Source Technology database, for example, “was one of the most successful lists out there – being rented by all the major catalogs and publishers,” recalls the operations manager.
Response rates have continued to be good, but the flames have steadily increased during the past six months. “Customers were not able to associate how their name got on the list with a specific event or offer,” Crowell explains. “They thought their name was everywhere and that people were exploiting it.”
Now every person on Crowell’s lists is being asked to opt in by telephone or e-mail. The resulting new files have shrunk by half, but “e-mail is very lucrative if people really want the information you’re sending,” he maintains.
An e-mail pioneer and the president of New York’s NetCreations, Rosalind Resnick thinks so, too. She swears by her double opt-in method in which consumers click to join the list and then, later, confirm that they have joined.
“We’ve been generating 5% to 15% click-through on our e-mail lists from day one,” she says.
“Opt-in e-mail is alive and kicking. Any reports of its death have been greatly exaggerated,” she adds.
The central issue, all agree, is not whether the opt-in or the permission-based method is used, but how. In addition to acquiring the customers’ agreement to join the list and being sure they know how their names will be used, each transmission should include the list owner’s name as well as an obvious and easy-to-use unsubscribe link.
Should the recipient be able to unsubscribe from the list altogether? Or just from the roster of the advertiser who sent the message? Many managers think hitting “unsubscribe” should get the consumer off the list altogether.
“If consumers change their mind in a day, they can opt out of the list,” says Richard Baumer, who is president of VentureDirect Worldwide in New York. “Consumers have more control, therefore making it a better marketing vehicle.”
As always, e-mail bubbles with controversy.
“I think that name should be taken off the list until the list manager can ask them if they wish to be taken off their promotional file entirely,” says Roy Schwedelson, CEO of Worldata, Boca Raton, FL, who recently began requiring the owners of the lists he manages to opt in all their names.
An agreement reached in September between Novus Marketing Inc. of Minneapolis and Monica Smith, former vice president of its list management division, settled charges against Smith that she would “inevitably disclose” Novus trade secrets to competitors. The settlement restricts Smith, who left Novus last spring, from working for four list management companies – Acxiom/Direct Media Inc. of Greenwich, CT; American List Counsel of Princeton, NJ; List Services Corp. of Bethel, CT; and Millard Group Inc. of Peterborough, NH – until September 2000.
Smith also agreed not to work for any current Novus clients through March 2001, and to be bound by two confidentiality agreements she had signed.
The three-month lawsuit cost Smith more than $40,000 in legal bills and lost wages because a restraining order kept her from a consulting position with Acxiom/Direct Media. Last spring, Smith founded Marketshare, a Milford, NJ, strategic marketing company.
The current hyper-competitive employment market makes talented executives vulnerable, Smith cautions.
“It’s not even a matter of taking clients or taking employees – with inevitable disclosure, it could happen to anybody,” she adds. Inevitable disclosure says key executives will inevitably reveal their former employers’ trade secrets when they go to new ones, say lawyers.
In this environment, “the reasonable employer would expect that if they make it really clear to employees what is secret and what is not, and rigorously maintain the confidentiality of their marketing, financial and strategic plans, then their key employees aren’t going to be able to go to a direct competitor and draw on that information,” says Novus’ lawyer, Thomas E. Propson of Meagher & Geer in Minneapolis.
“It’s a balancing of interests,” says Smith’s attorney, Jeffrey M. Schlossberg of Mineola, NY’s Ruskin, Moscou, Evans & Faltischek PC. “If a person goes to trade journals and the yellow pages and figures out who your customers are, you can’t claim those names as confidential. But if the customer lists are the result of an employer’s own due diligence…then the employer has a better chance of claiming that it’s a proprietary trade secret that should be protected.”
