The Middle Way

by Bill McCloskey, Aug 19, 2004, 12:00 AM

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The more I follow the e-mail space, the more I realize that virtually no one really understands what's going on, including those directly involved in the industry. Like any complicated advertising space, people have a tendency to knee jerk in their reactions, see everything in black and white terms, and have a very simplistic view, or better - simplified view of the marketplace.

This is all well and good, but unfortunately laws get passed - both in e-mail and in contextual marketing arenas - based on people's feelings about advertising, not about how the industry actually works or how its methods operate. In addition, there is a time gap between what people perceive is going on and what is really going on. In other words, anger (and the laws passed to assuage that anger) towards the more fringe forms of online advertising are based on practices that for the most part have been abandoned by the major players in the industry, and for good reason. The big players have a vested interest in cleaning up their own space. They don't want people to use the same methods that they may have used themselves; once established they don't need to rely on those questionable methods. Their future depends on being perceived as squeaky clean.

We certainly saw that in the contextual marketing space as companies such as WhenU, Claria, and others bend over backwards to present a buttoned up front to the world. If you don't think they've cleaned up their acts, you haven't been watching closely.

The same goes for the e-mail space. Today, people have much less to worry about from a Scott Richter-type than they do a Hong Kong-or Russian-based, low-level spammer. Scott has too much at stake not to clean up his act. In my talks with "high-volume" e-mail companies, they seem to be hardworking people trying to build a legitimate business. Rather than call them high-volume e-mailers, I'd like to call them "middle tier" e-mailers.

One way to look at the e-mail industry is to look at it in three levels:

Bottom Tier E-mailers: These are the real bad guys who need to be put out of business - the ones sending inappropriate content, faked e-mail return addresses, and are not Can Spam compliant. These are the ones sending out the body enhancement ads and the Nigerian appeals. And these are not companies: they are single individuals who've trolled for your e-mail address and are usually located off-shore somewhere.

Top Tier E-mailers: These are the P&G's of the world who work mostly from house lists and who have given up, for the time being, acquiring new customers and are content to maintain a retention-based strategy.

Then there are the middle tier guys: These are legitimate companies - the emphasis on company here rather than individual - who are trying to grow their business. They do CPA deals. They use affiliate networks. They promote credit cards you may not have heard of, online universities, car loans, mortgage loans, credit reports, dating services. For the most part these are offers from legitimate marketers, they're just not marketers you've ever seen on a Super Bowl ad.

The problem is that the middle tier e-mailers get lumped in with the bottom tier e-mailers, unfairly, even by (or should I say especially by) people in the advertising industry. This is the time gap problem we talked about earlier. The companies that were using shadier types of tactics are now either out of business or have cleaned up their acts, in many ways because of the legislation that has passed. But those methods and perceptions they left still linger around the middle tier e-mailers. Much of that is bad karma coming back to haunt them now.

But as marketers we must realize that the industry has changed and not pretend that it is the same world as a year ago. More than ever, there is a need for these Middle Tier players to ban together and organize a collective PR campaign to rescue their image. It seems clear to me, at any rate, that the trade associations whose job this should be, have fallen asleep at the wheel. These middle tier companies better start waking them up before it's too late.

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