Posted on: Tuesday, May 18, 2004
Anti-spam rules a boon for some e-mail firms
By J.K. Wall
Indianapolis Star
When Congress decided to crack down on spam e-mail last year, business for two Indianapolis e-mail marketing firms shot up.
The reason: Legitimate companies wanted to find legal ways to send e-mail solicitations that aren't considered spam.
And ExactTarget and Neighborhood Email are experts at constructing and communicating with lists of e-mail users who want to receive electronic ads.
Since Jan. 1, when the anti-spam law took effect, sales at ExactTarget have doubled. At Neighborhood Email, sales rose 133 percent in its first quarter.
"It really kind of exploded over the fourth quarter and hasn't let up since," said Scott Dorsey, president of ExactTarget.
The new federal law requires each commercial e-mail to include "opt-out" instructions, a legitimate return e-mail address and physical postal address, a clear indication that it's a solicitation, and the words "sexually explicit" if it contains pornography.
Neighborhood Email and ExactTarget help companies comply with these rules. ExactTarget's software makes sure those who unsubscribe are removed from e-mail lists promptly. Both companies forbid the harvesting of e-mail addresses from Web sites and Internet chat rooms.
Jupiter Research, a New York research firm, estimated that spending on e-mail marketing will nearly triple to $6 billion by 2008. The report found three key factors driving the growth: the effectiveness of e-mail in attracting and retaining customers, the widening challenge of spam and the all-important cost efficiencies.
"You can reach a lot more people for the buck electronically than you can with postal," said Duane Schau, vice president and chief information officer at the Indiana University Alumni Association. Schau and his team are responsible for sending roughly 2 million e-mails annually from IU's eight campuses and many departments.
The university hired ExactTarget to track and analyze all e-mail marketing messages from IU's schools. Schau said he wants to keep the university up to date or even ahead of legislation and industry-best practices, to avoid any spam-induced ire from IU alumni.
"There's oodles of communications going out on a daily basis," Schau said. "We figure that over the long run, we're going to get in trouble if we just send communications to people without thinking."
Indeed, spam has raised the threat that overwhelmed e-mail users will simply use e-mail less to avoid the hassle.
A March survey by the Pew Internet & American Life Project showed that 29 percent of Internet users nationally have reduced their use of e-mail because of spam. The problem has led 63 percent of e-mail users to become less trusting of e-mail.
Such attitudes augur ill for U.S. businesses.
ExactTarget and Neighborhood Email try to help companies protect themselves from any backlash over e-mail.
