New Revenue Opportunity for Web Mail Providers

  • by January 24, 2001
Promotional email delivery will emerge over the next two years as a new revenue stream for large portals, ISPs and Web-mail providers as they exert greater control over email passed between marketers and consumers, according to a new report released today by Jupiter Research.

As email marketing proliferates, Jupiter projects that ISPs and email service providers will have approximately 5.6 billion email messages cross their networks for each one million subscribers by 2005.

Additionally, Jupiter predicts that advertisers will send 268 billion email messages in 2005 - 22 times the number of promotional marketing emails sent in 2000.

”Internet email service providers control a crucial chokepoint between marketers and the millions of consumers they want to reach,” said Christopher Todd, analyst at Jupiter Research. “As they restrict access to a user's primary inbox and monetize the delivery of promotional email, advertisers looking to reach consumers online must prepare to pay a premium.

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”Although shortsighted marketers will view this as extortion, savvy marketers will recognize it as an opportunity to distance their messages from existing inbox clutter. Large portals, ISPs and other organizations that have a sizable e-mail subscriber base will see it as a significant opportunity to generate additional revenue.”

Jupiter believes that the current free delivery of promotional email will evolve into a tier-based scenario that forces marketers to refine and focus their email strategies.

The top tier will include profiled delivery into the primary inbox based on individual usage behavior (i.e. time of day).

The second tier will be enhanced delivery into the primary inbox with enhanced fonts and icons to break through clutter.

The third tier will be standard delivery direct to the primary inbox for marketers that compensate for access and for all personal or one-to-one email messages. The bottom tier will be bulk delivery into a promotional “bulk” email inbox (no fee).

“On the consumer side, this may be end of SPAM as we know it,” Todd said. “Consumer email users will adopt and accept new delivery tiers as they realize increased efficacy within their primary inbox.”

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