Re: Is Email Marketing Dead?

From: Ryan Gibson <ryan_at_kbitraining.com>
Date: Thu 28 Feb 2002 09:31:53 -0600

I wanted to agree with Chris, but at the same time shed some light.

SPAM VS DIRECT MARKETING

A lot of firms are reusing lists from companies they have purchased or
become involved with. Several banner networks and firms that have
developed lists for "one" optin topic have used their lists to promote
almost anything.

Recently I received SPAM from Shaw.ca, our local cable DSL provider.
Their list was provided by Real Player. No apparent opt-in connection to
receive information on Shaw. So this brings us to define what does
opt-in mean? Does opt-in mean when I ask for information on Real Player
that I will be faced with emails on any firm they sell my address to
forever?

And in this case, what is the difference between a firm such as Real
Player who sells the list openly and a SPAM list agent if I did not want
to be on either list? As a consumer and a "tech snob" I would say they
are both spam but I am wrong and so are those who believe it...we want
to believe it's spam because they are bothering us. I expect that like a
"contest entry form" to win a car, you are on a direct marketing list.
Thus, the difference between Spam and Direct Marketing is that the entry
of your email address into any "free information" or "contest" leaves
you vulnerable (now and in the future) to direct marketing. For how
long? In actual fact, it should be for the length of time the list
broker has licensed you to use their list, the exact same way it is
contracted in the Direct Mail Industry. (Appropriately 1 year) Using a
list for more than the allowed number of times or topic it was sold for
should be prosecutable by the list owners who have "licensed" it.
However, no such rules or regulations have been applied in the dotcom
world. Instead, we have chosen to call both spam.

Why is this important? Because when we compare $50-$30 CPM to $5 CPM, we
are comparing apples to oranges. $5 CPM or less are really general
direct marketing lists that have the effectiveness based on "quantity of
contacts" and occassionally "geography." $50-$30 CPM is often part of an
Ezine special announcement, a true advertisement, or an opt-in list 1-3
months old. The advertising cost is higher, as the topic is often
targetted and possess greater branding significance. Why is this
important? I can purchase advertising in an Ezine or in a true opt-in
list and offer the same offer several times, and benefit from branding
and association to the firm who sold me the list.

Direct Mail lists can seldom be used more than once if the quality is
poor because our message will quickly become a bother and has no
sustainable credibility associated to it because the relationship with
the reader or readers preferred "content provider" does not exist. It's
just a list!

SPAM THE REAL COST, NOT THE SOCIAL COST

So, what about spam. I know the technical costs of spam and why it has
been made illegal in several states, but what about the economics of
spamming from a Marketers point of view who has a "budget", not social
costs. This is worthy of a column in a Marketing Newsletter to fore warn
those considering it. Spam is expensive for marketers to!

With the growing and almost formidable world-wide push against spam, a
bullet proof server is useful for around 2 days to a week maximum. Then
you need to change servers, move files, set-up the list, the message,
the campaign has to begin again, the server may not be up to your spec
and you loose time! Thus, a spam campaign will cost $500+ in servers per
week, $2000 in technical support per week or $500 per week if you are
using out-of-North American IT firms, and several thousand dollars in
lost opportunity time for the moments your servers are down, the message
is blocked or the message was sent out with major errors in it deaming
it completely ineffective, and sales staff wages mount as the leads
"don't come in."

Thus, for $10,000 to $20,000 a month you could be an effective spammer,
and it would create money for you. (But don't be fooled by the need to
recreate the wheel.) The lists are general, your reputation is dirt, and
the clients you attract are fairly uneducated and time consuming. You
also pay in emotional tolls, as inconsistencies in emailing cause sales
staff to be demotivated with the lack and sudden bursts of leads, and
evangilists call you to personally harrass you for spamming them or
their clients.

For those of you who want to trully make money online, consider spending
$10,000 to $20,000 a month online effectively and you will get a lot
further than spamming or buying general direct marketing lists.


So does Email Marketing still work?

Who is your target market?
Who are your A clients, B clients, C clients in order of revenues
earned?
How much are you willing to invest to gain that client?
What stage of business growth or age is your target market in?
What message would appeal to them?
What is the competition like in your marketplace?
What has their success been in marketing with email?
Have they used your list providers list and are they still advertising
with them?
How frequently did they use the list and to what success if statistics
are available?

Once you have answered these questions, you will have a better idea of
whether it will work and then I would consistently test it to find-out.
Yes it works, but only when you find what works.

Sincerely,

Ryan A Gibson
Director of Marketing and Business Development
Ryan_at_kbitraining.com
Ph: 604-331-4471
Cell: 604-831-3400
Fax: 604-331-4478
www.kbitraining.com
 
Suite 410 938 Howe St.
Vancouver, BC
V6Z 1N9





Received on Thu Feb 28 2002 - 09:31:53 CST