E-mail marketing messages expected to total 30 bil in 2001, growing to 268 bil in 2005; marketers may have to start paying to send e-mails

E-mail marketing messages expected to total 30 bil in 2001, growing to 268 bil in 2005; marketers may have to start paying to send e-mails
From DIRECT, April 1st, 2001

ORIGINAL TITLE: Free No More?. FULLTEXT: GALENO, EDA Marketers may pay for e-mail delivery FREE PROMOTIONAL e-mail may be going the way of the 33-cent stamp, if a recent
Jupiter Research report on promotional e-mail delivery is correct. No, it
won't be the end of e-mail marketing–just an evolution in its delivery to a
system where online marketers will be charged for different levels of access
to their targets' inboxes. "There's no doubt consumers are receiving more spam than ever before and
they're becoming increasingly frustrated and demanding something that will
alleviate this," says Christopher Todd, a Jupiter analyst, who adds that
Jupiter Research anticipates 30 billion e-mail marketing messages will be
cyberspace-bound this year–a number projected to increase to 268 billion in
2005. Not surprisingly, marketers are seeing response rates dwindle through
increased inbox clutter, he points out. Those indicators of change are not the only ones fueling expected fees for
online marketers. Todd points out that gatekeepers, such as Internet service
providers and Web mail providers, have relied on online advertising as their
primary revenue model. "While we completely believe this is going to continue," Todd says, "Jupiter
also believes the gatekeepers will look to derive revenue from e-mail
channels," since online advertising revenue is decreasing. Additionally, he notes, legitimate marketers are looking for ways to have
their messages command inbox attention. "We believe the tiered-based
distribution system will provide them with that." The tiered system outlined
in Jupiter's report includes varying e-mail delivery scenarios. The
top-tier–profiled delivery–would offer targeted delivery to a user's primary
inbox using e-mail profile data to optimize response. The second
tier–enhanced delivery–would provide primary inbox delivery with enhanced
fonts and icons to increase visibility. The third tier–standard
delivery–would offer normal delivery to the primary inbox for marketers that
compensate gatekeepers for access. The bottom tier–bulk delivery–would send
e-mail to a bulk mailbox. "We're seeing signs it's already starting to happen," Todd says. "Yahoo and
Hotmail have established bulk mail folders for users to route marketing mail
into and we believe it will transform to a format in which the user will
either have to route e-mail from a specific domain into their primary inbox,
or marketers will pay for the right to reach consumers within their primary
inbox." What should marketers expect to pay for the privilege of tier-one
communications? Jupiter has yet to nail down a price on what gatekeepers can
expect to derive in revenues. But not everyone is so sure Jupiter's predictions will materialize. "Obviously
with the growth of commercial e-mail and permission-based e-mail, we will see
the need for advanced tools within the software programs to enable priority
mail versus information or commercial mail," says Ben Isaacson, executive
director of the Association of Interactive Media. "For the free e-mail
providers, there's a revenue model there. But for the paid service providers,
that would be a line that e-mail users wouldn't want crossed." Reps for MSN Hotmail and Yahoo declined to comment on the report. So will marketers pay for the privilege of tier one communications? "E-mail marketi
ng has been a good way for us to maintain contact with our
customers and build the relationship," says Ken Young, director of
communications at 1-800-Flowers. "If and when fees arrive, we'll debate that
just as we would the cost of any media." ISSN 1046-4174; Issue 5; Volume 13; Page 43 Copyright 2001 INTERTEC Publishing Corporation (c) 2001 Resp. DB Svcs. All rts. reserv.
$$DIRECT, 01st April 2001