Email Marketing Update

If your program relies on affiliates, distributors or resellers for generating sales, then email could be one of the most effective channels for you to reach new customers. But email marketing is not what it used to be. Read on for an update of email marketing this fall.

The new email marketing landscape for affiliate managers

Have you noticed an increasing amount of spam in your inbox during the last 12-18 months?

You're not alone.

Two to three years ago, things were a lot easier. Spam was a problem but quite honestly a minor issue. Most of my clients had little or no real problems with spam.

What has happened since then? And why is down-to-earth, in the trenches know-how critical to your company's reputation and survival?

Spammers have discovered affiliate programs.

And spammers have become much more sophisticated in the way they appear and dress.

Let me share with you some trends that have made email marketing a challenge in online distribution channels.

• Opt-out co-registrations. Many companies build their lists with opt-out co-registrations. Basically, co-registrations are pre-checked when users sign up or register at many sites. Some sites have as many as 30 pre-checked co-registration boxes on their form.
  
  The buying and selling of opt-out co-registrations have boosted company's email lists. But the permission basis from the end user is weaker then ever.
  
  
• List selling. Your name and email address is being sold. Sometimes as many as 10-15 times after you sign up for something online. It's most likely covered in the privacy policy but when was the last time you read a privacy policy?
  
  
• Filtering. The other side of the coin is that much email that is being sent by legitimate companies, to their own customer lists sometimes does not get through.
  
  The war between Internet Service Providers and Bulk e-mailers generates innocent victims. If you send too much mail with a bad subject line that triggers a spam filter your mail might not reach your list. Filters are not human. They are just rules.

Spammers will find you. You don't need to find them.

Let's say that your offer performs above an effective $0.50 CPM then you don't need to find affiliates that use questionable mass email practices. They will find you.

They have a mailing cost of $0.20 and are happy with a profit of $0.30-0.50 CPM. Whenever a broad-based consumer email marketer makes $1 CPM or more it is a good day.

Meet the new spammer: A "serious" sales rep in suit and tie

Right now buying email on performance is really hard.

Very simplified: The only companies that do email on performance are in the freebie/entertainment and other broad online consumer sectors. And they all have the "same" 20 million consumer addresses that has been sold and brokered between them.

And if you have never done an email marketing campaign then you're fresh meat for the grinder. And the temptation is there all right.

When large list providers charge $30-$200 CPM for broad-based consumer lists (by the way...you deserve a place in the Direct Marketers Hall of Fame if you get an ROI on a $200 CPM email buy) you can get your message out for $0.50-1.50 CPM when running it through companies with junk consumer lists.

I recently met a sales rep from an email marketing company at a party in NY. It was an interesting cocktail conversation. If your perception of a spammer is a guy sitting at home mailing cable box descrambler offers and porn through a server in China or Russia then this guy is as far from that as can be.

He essentially approaches larger corporations in suit and tie and charges $2-5 CPM for mailing to his 20 million names list. He was especially proud of the technical sophistication his company has for getting through the spam filters. And that he got higher ad rates than most of his competitors. After bragging discount he probably gets $1 CPM, which makes him $16,000 per mailing in profit after the mailing cost.

Will the market regulate itself?

In the last 3-4 weeks many webmasters that have large opt-out email lists have had more and more problems getting their mail out. List-hosting services are getting more and more picky with whom they are dealing with and are more sensitive to complaints.

Affiliate revenues in many of the low-end CPA networks have decreased lately due to the increased difficulties for their affiliates to get their mail out.

Tougher filtering and increased awareness by ISP's seem to have somewhat of an effect. But there are always ways to get through the filters.

We are still yet to experience a big legal battle with a lawsuit that has an effect on most of the semi-serious companies. But it will come.

Also expect a double opt-in process to be the legal framework. The user not only has to fill out a form, but also needs to verify her request by clicking on a link in an auto-responder and revisit the site.

In the same way that affiliate marketing technology providers lend credibility to your program as an independent 3rd party tracking source, reputable and serious list hosting services that validates the quality of a list will be even more important in the future.

I am an affiliate manager and want to use email marketing. What can I do?

Let me first tell you that there is not a generic answer. It all depends on your special situation.

• You probably should not make email copy available to your mass affiliate base. Most of the major affiliate service providers don't facilitate email copy to be distributed to affiliates through their interface.
  
  
• Let all affiliates that want to do an email drop contact you about it first and deal with each request on a case-by-case basis.
  
  
• Even if you do get spam complaints they can be dealt with. Always show a no-tolerance with spam. Communicate that an affiliate will be terminated immediately and all commissions forfeited.
  
  
• Look into your affiliate agreement and check that unsolicited emails are not permitted.
  
  
• Make sure that when an affiliate signs up to your program that you communicate the basic rules both on the sign-up page and in the auto-responder after they sign up.
  
  
• If you are negotiating with a company that does mail on performance you should take references if possible. You need to take the reverse approach - you're the one doing the affiliate a favor. Compensate the affiliate for any extra hassle.
  

It's not a perfect solution, but it gives you a chance to keep better control of what's going on.

Control? I use the word control carefully. You can't really control your affiliates. But you do have to be on top of things and evaluate each and every campaign in detail.

I would also say that if your product is a smaller niche product that is not suitable for mass consumer lists, then your problems won't be the same as described in this article.

And you really need to have a decent offer and be a sought-after affiliate program to use many of these recommendations.

If you don't? Then you need to go back to the drawing board. If your offer does not perform, then why do you have an affiliate program in the first place?

Before I sign off...Despite the challenges described above, html email, together with interstitials, are still the two creative formats that generate results online. And you're losing out if you're not making email one of your top priorities.

You just have to be aware that it is a totally different landscape out there now and lots of landmines to step on.

Wishing you all the best,

Ola Edvardsson

P.S. If you would like to join my email list visit www.getperformance.com or send a blank email to getperformance@getresponse.com

As a way of saying thanks...I'll send you a PDF file automatically with some of my best back issues from the past three years.

About the author

Ola Edvardsson is one of the world's top experts on performance-based marketing.

Clients ranging from small Internet start-ups that survived "the dot-com era" to Fortune 100 corporations turn to Mr Edvardsson for successful strategies and hands-on advice and coaching.

He has trained hundreds of corporations and thousands of webmasters since 1999 on affiliate programs and performance-based marketing through his educational publications.

An internationally sought after speaker, he has addressed audiences in the United States, Europe and Asia. Mr Edvardsson's appearances range from large Internet marketing conferences such as Internet World to private exclusive seminars.