Agencies, Marketers Still Bullish On Email Marketing

by Michael Shields, Apr 19, 2004, 12:00 AM

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The Can-Spam Act is now nearly four months old, and while the jury is still out as to how effective it has been in preventing the flood of unwanted emails in Americans' inboxes, it has impacted the way agencies conduct email-marketing campaigns for clients.

While some agency planners report residual hesitancy among advertisers as they navigate the relatively new law, many online media planners say that their clients have made compliance a priority, and are now as bullish as ever on using email as a marketing tool.

The Can-Spam Act, "Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003," was signed by the White House late last year and went into effect on January 1, 2004. The law was designed to regulate email marketing and weed out unsolicited email.

Some marketers appear to have pulled back email-marketing efforts early on to make sure they were abiding by the law. "We've definitely seen that kind of reaction, which might be a temporary response--a pausing to get things right," notes David Hallerman, senior analyst at eMarketer. Lana McGilvray, vice president of sales and marketing at Skylist, which provides email software to companies like eDiets, offers two reasons for hesitancy in the market. "Consumers have a perception that spam is 'whatever email I don't want to receive,'" she says. "They don't realize what they have opted-in for. We still need a lot of consumer education."

"Plus," McGilvray adds, "the spam law changed who the sender is, adding culpability to the marketer." In the past, the burden of responsibility for sending email was often limited to affiliate list owners who actually process the mailing.

Despite the shifting landscape resulting from the Can-Spam law, several agencies say that their clients are dialing up their email activity. "In general, if anything, [our clients] have expanded their email marketing," says Rob Cosinuke, president of Digitas. "It seems to be working well. It is still an excellent tool for marketers to use in a highly personal, optimized way for nurturing leads."

Mark Kingdom, chief executive officer at Organic, agrees: "Our clients are still excited about email. ... Most use opt-in programs."

If anything, the passage of Can-Spam is causing fewer headaches for marketers who were ahead of the game in terms of compliance, while prodding the less-prepared to pay much closer attention to how they manage their email efforts.

"What is definitely happening is that for a lot of clients, email was cheap and they didn't have to think about it," notes Stuart Meyler, director of marketing strategy at Modem Media. "Now they are saying, 'I have to think about this more. There is a cost to this--it could be a legal cost; it could be a lost customer.'"

To avoid any such cost, agencies are sticking mostly with using email for retention programs, providing existing customers with only what they ask for and letting them easily unsubscribe. "It's about taking a more considered approach," Meyler says, adding: "[It's about] being more respectful of a customer's inbox."

"People really only want to get email from folks they know," states Eric Valk-Peterson, vice president, media director at iTraffic.

To assuage such sentiment, Skylight's McGilvray is a proponent of creating a classification system similar to snail mail via the U.S. Postal Service that would make it clearer which emails are "junk." Skylight is also behind an effort to create a central place on the Web where users can opt-out of anything.

While retention email is the clear favorite among advertisers, the use of email marketing for customer acquisition, through the use of third-party list rentals and the like, appears to be a casualty of the current climate.

"Email as an acquisition tool is almost dead and should be dead," Digitas' Cosinuke states. "Blasting email is a very difficult thing to make work."

Modem's Meyler agrees. "Prospecting has really fallen off the map," he says. "There are so many legal issues. If you look at [it] from a cost/benefit standpoint, I'd steer you in another direction."

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