• by Heidi Anderson , August 1, 2000

When it comes to advertising on the Internet, the web may have all the sex appeal. But email ad campaigns are beginning to take off, and with good reason.

With email usage growing and enhanced technologies allowing for more compelling advertising, commercial email messaging is hitting primetime. Forrester Research predicts that global email traffic will hit 1.5 billion messages per day by 2002, and Cyberatlas counts more than 260 million email boxes worldwide. Recent estimates from Jupiter Communications show that commercial email spending will grow from $164 million in 1999 to $7.3 billion in 2005, a forty-fold increase in volume. Clearly, others recognize the potential of this market; if you don’t, you’re likely to be left behind.

And it could cost you. CPMs for email-media buying, which often range between $100 and $500, are higher than direct mail or other forms of advertising. But the response rates are higher still, yielding far greater efficiency. Along with a bigger bang for the buck, the ability to reach incredibly vertical markets and the efficiency of getting a consumer to take action make email marketing a valuable tool. According to YesMail.com, the average response to banner ads is 0.5-1 percent, direct mail figures merely double that, but opt-in email marketing response rates average ten times higher than those of banner ads. If you don’t approach email media correctly, however, you could find your clients ignored or worse—they could be on the end of a spam backlash. To help you consider the best approach, we’ll show some options for reaching qualified recipients.

Email Newsletters

Corporations often send out their own promotional newsletters via email, but businesses can use newsletters to promote their own products and services without having to produce one of their own. Email newsletters cover everything from humor to home remodeling, and they often earn their keep through advertising.

Here’s how it works. The publisher offers a placement of ad copy, typically three to six lines, at the end (or occasionally at the beginning or in the middle) of the newsletter. Terms vary—depending on how often the newsletter is produced, how many ads the publisher wishes it to contain, and other factors—and costs begin at about $100 to $300 CPM for general interest newsletters and run much higher for more targeted publications.

Randy Cassingham, publisher of the “This is True” newsletter, notes that email newsletters are great ad vehicles, since ad spots offer more space than Web banners and are still trackable. Plus, banner ads are often just one of many graphic elements on a web page and therefore are easy to overlook, whereas newsletter ads tend to be part of the text that people are reading.

If you’re just beginning to explore the concept of newsletter advertising, one of the best places to start is the PennMedia site (www.pennmedia.com). PennMedia is a group of nearly 36 million members who have opted-in—that is, chosen to receive any of the hundreds of newsletters in the PennMedia family. PennMedia categorizes these newsletters into more than 20 clusters, so marketers can target very specific groups of individuals.

Discussion Lists

Like email newsletter advertisements, discussion list ads also reach groups of people who have opted to receive communications on certain topics, but there are some important differences. Individuals sign up for discussion lists and then conduct conversations with other members by posting to a central address. For instance, those interested in mystery writing can subscribe to DOROTHYL. A member sends a message for other members to the list server, the automated program that manages the list, and a copy of the message is delivered to the inbox of everyone on the list. Some discussion lists are moderated, whereby a posting must be approved by the list “owner” before it is sent to the group, or they may be completely open. Even most unmoderated or “open” lists, however, have rules of conduct that members must adhere to or risk being removed. Unsolicited commercial messages are usually frowned upon, so it pays to go through legitimate channels. There are tens of thousands of discussion lists, though not all of them are sponsorship-based. Liszt, the list directory (www.liszt.com) can show you just how targeted a discussion list can be.

As with online newsletters, discussion list advertising is bought on a CPM basis. Costs vary, but with eGroups.com, for example, you can expect to pay between $200 and $700 CPM, depending upon how deep you want to drill down into a list topic. Ads with a broader appeal, such as those sent to anyone belonging to, say, sports-related lists, would cost less than those targeted to narrower topics such as high school football.

Email Ad Space

Discussion lists and email newsletters bring together individuals with similar interests, but there’s a third type of email media that brings together users based on email access rather than common interest. Some email services offer free email accounts to users in exchange for display of advertising. These web-based accounts allow users access from any computer in the world connected to the Internet.

Web-based email account holders aren’t necessarily as easy to target as discussion list members or newsletter subscribers—at least by definition—but they can be, depending upon the level of demographic and other data the mail service collects. When users sign up for web-based email accounts, they typically provide age, gender, zip code, income, hobbies and other data that help the mail service place the users into segments. The better the information gathering, the more the media buyer will know about the user and therefore the better the targeting. Mail.com is one such web-based network, and as one of the largest free email services, with more than 14 million individual accounts, it provides a solid introduction to email media buying.

Opt-In Email Lists

And now, time for a different approach. So far, we’ve seen how email-media buying piggybacks on existing messages, but a fourth type of email media, third-party opt-in email lists, allow advertisers to create standalone messages that are sent to targeted lists of consumers. Opt-in email lists consist of addresses of consumers (and businesses) who have volunteered to receive messages from advertisers. The media buyer rents the addresses for anywhere between $100 and $500 CPM, and sends out a product announcement, trial offer or other message without seeing the email addresses. For example, when Mapquest.com users register for the site, they check off whether they are interested in receiving information in certain categories. YesMail.com gathers that information to create targeted profiles, and advertisers buy access to those addresses directly from YesMail.com. PostMasterDirect.com is one of the leaders in opt-in email marketing, and it has more than 3,000 topical lists and 10 million names to choose from.