Capturing Email Addresses: The Quest For Cost-Effective Methods

Circulation Management, July 1, 2002

Byline: BARBARA LOVE

Circulators have spent the last several years trying to develop a critical mass of email addresses so that they can effectively tap this promising new source, and many have made considerable progress.

Along with other direct marketers, circulators are gradually building email address databases, linking or appending these to house files, and, in many cases, seeing some real cost benefits from employing them as added or replacement acquisition and renewal efforts. (See results of a recent Direct Marketing Association email usage survey, page 62.)

Still, particularly for consumer titles, developing this source is proving to be more difficult and costly than many had imagined.

"The secret to selling online is not selling, but collecting email addresses," says one supplier. "Once you get that email address and get permission to mail to it, you can, at least in theory, mail as often as you want to." That said, the challenge is figuring out how to secure email addresses at a price that works. Although email rental CPM's have come down from about $400 to $500 a couple of years ago to $200 to $300 currently, many circulators say that response has also declined somewhat.

Nor is price the only challenge. Circulators report that too few email lists offer corresponding direct mail lists for follow-ups, and that many email lists aren't as clean as they should be because they're not properly maintained. (According to David Dwek, president of Breakthrough Advertising, email addresses churn at a rate of about 3 percent per month, on average.) Targeted, permission-based lists of significant size are often tough to find, and are prone to fatigue. And some consumer circulators still fear potential brand backlash.

Joan Adamo, direct mail director, Hachette Filipacchi Media USA, says that she's currently "exploring" email list purchases. "We're not doing email subscription promotion yet, but we're gathering email addresses. It's in the works," she reports. "Pricing on email is tough. You need to be very, very careful with the cost. I've heard of companies putting money into email and losing their shirts."

"We're still investigating outside lists, but haven't bought any because they are too expensive," concurs Laurie Mellon, direct mail manager for Consumer Reports. Mellon maintains that email lists should be more negotiable. "We come close and then we back away. There are also all the privacy issues, so we want to be very careful."

Chris Purcell, director of new business, Business Week, says he's also found renting email names too pricey. "In the past, we've found that the response you get in relation to the cost of the list is out of proportion," he says, particularly when CPM's were at the higher levels. He adds that compiled lists, which were the first to come on the market, were especially problematic because of their lack of targeting.

List vendors, however, maintain that marketers need to look harder at the big picture. "An overall direct mail campaign can cost anywhere between $600 and $1,200 per thousand, whereas an email campaign starts at $400 per thousand," says IDG List Services president Deb Goldstein. "From an overall CPM standpoint, campaigns to email rentals can actually represent a very good value."

EMAIL LIST FATIGUE

Naturally, clean, targeted email lists are in great demand. "It might be a great list, but it's being used so much that people are just tired of receiving emails," Purcell adds. "Top management is the hottest select, and it gets emailed to over and over again." This is true, he maintains, even though marketers are trying hard to manage "customer touches" (how many times a person receives some sort of email message). "How many is too many depends on what kind of touches they are," he notes.

For the time being, at least, BW is relying mainly on its in-house, permission-based email address file. "These people are pre-qualified because of their interest in the product and the time they took to agree to be allowed to receive offers," says Purcell.

Email list fatigue is also on the mind of Shannon Aronson, group circulation director, Technology Solutions Group, CMP Media LLC. "I think what's going on first and foremost - internally as well as externally - is email fatigue," she says. "There are a limited number of opt-in names. Everybody in-house wants to use the email names, but you're also trying to make money off them. Within our group, we handle all of the emails that go out. For instance, in many cases, we make sure that no one is sending more than one email for renewals a day before, the day of, or two days after we send out another email. If it's a show promotion, we may just block out one day. It depends on the type of promotion and how many names are being emailed."

As for churn or changes of address, "People do change their email addresses regularly," notes Jacqueline Serra, VP, director of circulation for business publisher Adams Business Media. "They change their service providers regularly. That's true even in the business world. And a lot of people work from home, where they also change their email addresses." Serra reports seeing a 50 to 60 percent turnover on her own email address files each year.