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Put Up or Shut Up
Mar 1, 2006 12:00 PM
, BY KEN MAGILL
AOL and a little-known company called Goodmail caused a firestorm last month when they announced that AOL would implement Goodmail's certified e-mail service. Under the scheme, AOL will charge senders a fraction of a cent per e-mail to guarantee their e-mail will be delivered with graphics and links intact. Supporters say the arrangement will add much-needed economic discipline to commercial e-mail. But critics were quick to blast the deal as a “tax” on responsible marketers and antithetical to the spirit of the Internet. “I think it's a terrible idea,” says Jay Schwedelson, corporate vice president at list firm Worldata. “This is all to help really big marketers get their e-mail through. But for small and up-and-coming marketers, this is going to crush their ability to compete in the marketplace because they don't have the ability to absorb the costs.” AOL plans to add a “trust” symbol to Goodmail-certified e-mail that will appear in the display window so recipients know the message has been verified as coming from a sender with a good reputation. AOL and a little-known company called Goodmail caused a firestorm last month when they announced that AOL would implement Goodmail's certified e-mail service. Under the scheme, AOL will charge senders a fraction of a cent per e-mail to guarantee that their e-mail will be delivered with graphics and links intact. Supporters said the arrangement will add much-needed economic discipline to commercial e-mail. But critics were quick to blast the deal as a “tax” on responsible marketers and antithetical to the spirit of the Internet. “I think it's a terrible idea,” said Jay Schwedelson, corporate vice president at list firm Worldata. “This is all to help really big marketers get their e-mail through. But for small and up-and-coming marketers, this is going to crush their ability to compete in the marketplace because they don't have the ability to absorb the costs.” Schwedelson added that he believes the deal will do nothing to eliminate spam, and that it could become overly complicated to send e-mail if the various e-mailbox providers all implement their own systems. AOL addresses typically make up from 15% to 30% of consumer e-mail lists and from 5% to 15% of business-to-business files, he noted. AOL said it will add a “trust” symbol to Goodmail-certified e-mail that will appear in the display window so recipients know that the message has been verified as coming from a sender with a good reputation. Initially, AOL said it would phase out its enhanced whitelist — a list of senders whose e-mails are deemed safe because they meet certain unpublished criteria like low spam complaint rates — but it has since backed off that plan. Goodmail also has a deal with Yahoo!, but Yahoo! hasn't released details on how it plans to implement the service. Matthew Blumberg, president of Return Path, an e-mail service provider that also runs Goodmail's competitor Bonded Sender, denounced AOL's plan as a “delivery tax” on e-mailers who already use industry best practices. “It does seem like a cynical attempt to get money out of reputable companies that have worked hard to earn the permission of their consumers to send them mail,” said Blumberg. “Now they're being told ‘If you don't pay, that mail might or might not get there; it might or might not work when it does and it's not going to have a little mark next to it that says it's AOL-certified.’” E-mail marketing software maker L-Soft's founder and CEO Eric Thomas compared AOL to “the IT industry's version of ‘Goodfellas,’ selling senders protection against a destiny of junk folders for a fraction of a cent per message.” But not everyone is against the plan. Dave Lewis, vice president for market development at e-mail infrastructure provider StrongMail Systems, argued that charging marketers a fee will help them implement online the fiscal discipline and list hygiene they impose offline. “They're not putting a gun to anyone's head,” added Al DiGuido, CEO of e-mail services company Epsilon Interactive. “Every six months, the postal service is adding another 2 cents to postal rates. And [e-mail] is now $3 to $4 per thousand. These fees won't change the business dynamic.” He also said e-mail currently is too inexpensive. Goodmail CEO Richard Gingras noted that most e-mailers aren't getting nearly as much of their e-mail delivered as they think. Goodmail plans to charge $2.50 per thousand e-mails “in the short term” but the price could go up or down in the future “depending on how the value proves out.” Gingras conceded that AOL has a financial interest in Goodmail. But he claimed the return on investment for marketers that buy the service will be worth it. Goodmail is offering free tests. Detractors contend that with e-mail delivery rates reportedly as low as under $1 per thousand, the return on investment will have to be awfully high to justify the kind of cost hike Goodmail is proposing. But Gingras countered that charging bulk e-mailers will provide the economic incentive to mail more efficiently, as it does in direct postal mail. “Without economic friction, there is no incentive for mailers to clean up their lists,” he said. Why not charge all bulk mailers a fee? “We felt it was appropriate to give bulk mailers choice,” Gingras answered. “If you want to pursue plain delivery, then fine. But if you want assured delivery and the special privilege of having that icon shown next to your message that this is a certified e-mail, then that's a different story.” Ben Isaacson, privacy and compliance leader for e-mail service company CheetahMail, said Goodmail is the third e-mail vendor to charge marketers to have their e-mail certified as non-spam, and that more are on the way. On the plus side, he noted, Goodmail offers at least one service previously unavailable to e-mailers: delivery verification. Despite initial skepticism, Chip House, ExactTarget's vice president for privacy and deliverability, views the AOL-Goodmail deal as “a chance to provide new benefits to the sender and receiver that haven't existed before.” However, he warned: “As of yet, this is unproven. We haven't seen the ROI bump that people are hoping will exist there.” |
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