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Spam and Viral Marketing


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An older presentation for new senders; describes in broad terms the dangers of engaging in e-mail marketing with poor list hygiene practices or lack of permission from recipients.

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Spam and Viral Marketing

  1. 1. Spam and Viral Marketing When does “word of mouse” marketing cross the line?
  2. 2. What is Spam? <ul><li>Content-based metrics always fail, because it is subjective. </li></ul><ul><li>Users say, “Spam is the e-mail I didn’t want to receive.” </li></ul><ul><li>Marketers say, “It’s targeted, so it isn’t spam.” </li></ul><ul><li>The true metric of spam is an economic one. </li></ul>
  3. 3. What’s Wrong with Spam? <ul><li>The problem with spam is NOT that it’s: </li></ul><ul><ul><li>Annoying </li></ul></ul><ul><ul><li>Invasive </li></ul></ul><ul><ul><li>or Fraudulent </li></ul></ul><ul><ul><li>… even though it is sometimes all of these. </li></ul></ul>
  4. 4. The Real Problem With Spam <ul><li>Spam costs recipients in higher access fees. </li></ul><ul><li>This is true whether the e-mail is sent from a fly-by-nighter or a responsible marketer. </li></ul><ul><li>How can sending e-mail cost the recipient? </li></ul>
  5. 5. How Does Spam Cost? <ul><li>ISPs price their services by average use. </li></ul><ul><li>When ISPs get hit with high volumes of e-mail, they have 3 choices: </li></ul><ul><ul><li>let users live with worse performance; </li></ul></ul><ul><ul><li>buy more capacity & eat the cost; </li></ul></ul><ul><ul><li>buy more capacity & pass the cost on to the customer. </li></ul></ul>
  6. 6. Remember Superman III? <ul><li>Richard Pryor is a hacker who diverts all fractions of cents in the company payroll to his paycheck. </li></ul><ul><li>By capturing a huge number of tiny transactions, the hacker diverts huge sums, and almost no one notices. </li></ul>
  7. 7. Spam and Superman III <ul><li>Each e-mail consumes a tiny amount of server space and bandwidth that the ISP has to buy from a provider. </li></ul><ul><li>In large volumes, this adds up to significant sums very, very quickly. </li></ul><ul><li>Unlike most traditional advertising methods, senders can foist the cost of marketing onto the recipients. </li></ul>
  8. 8. The Cost of Spam (May, 1998) <ul><li>Netcom: $1 million a month, or 10 percent of each subscriber's bill. </li></ul><ul><li>ShoreNet: $2 per customer per month. </li></ul><ul><li>Mindspring: 25% of traffic is spam. </li></ul><ul><li>Erol’s: 15% of server disk space, plus 3 FTEs (now six). </li></ul><ul><li>AOL: 30% of all inbound messages are spam. </li></ul>
  9. 9. The Risks of E-mail Marketing <ul><li>Damage to your brand - recipients lump you in with the spammers. </li></ul><ul><li>Sixteen states now have laws on the books that regulate e-mail solicitations. </li></ul><ul><li>Federal spam legislation is close to passage (HR3113). </li></ul><ul><li>Loss of connectivity for violating your agreement with your ISP, or RBL. </li></ul>
  10. 10. The Benefits of E-mail <ul><li>Conversion cost: $20, vs. $50 for direct mail, and $100 for a banner ad. </li></ul><ul><li>The number of active e-mail users is expected to grow to 162-million by 2003. </li></ul><ul><li>Consumers prefer e-mail to toll-free numbers (42% vs 36%). </li></ul>
  11. 11. How Not to Get Burned <ul><li>Get permission. </li></ul><ul><li>If you have permission, then your offer is solicited, and is not spam. </li></ul><ul><li>Remember: The definitive attribute of spam is lack of permission, not content or targeting. </li></ul><ul><li>NONE of the laws can touch you if you have archived, confirmed permission. </li></ul>
  12. 12. Viral Marketing Programs <ul><li>Incentive programs are problematic, because marketers are purchasing e-mail addresses. </li></ul><ul><li>There is no functional difference between buying a CD of addresses from a bulker, or buying a few at a time from users with chances for prizes. </li></ul>
  13. 13. Viral Marketing Programs <ul><li>Customers cannot give you permission to send to others - it’s still spam. </li></ul><ul><li>Remember MCI’s Friends and Family program? </li></ul><ul><li>Viral marketing can work just as quickly against you, as news of spamming spreads across the Net. </li></ul>
  14. 14. Conclusions: <ul><li>E-mail generally is a poor acquisition tool, but an immensely powerful retention tool. </li></ul><ul><li>Incentive viral programs can damage your brand far too easily. </li></ul><ul><li>Offer useful and valuable services - NOT coupons or discounts - and word will spread with the speed of the Internet. </li></ul>