SherpaBlog: Underbelly of Email List Rental Biz: Part II

1. Lillian Vernon Gets 10X Email Response
2. Big Online Advertiser NextCard Takes a Dive
3. How to Win Best Online Ad Award
4. Spam Complaints Run 15:1 Rented vs. House Lists
5. eTrade's Email Audio Too Darn Loud
6. Online Shopping Plummets During Superbowl
7. Underbelly of Email List Rental Biz: Part II
8. What Marketers Really Want from CRM Tech


***** THIS WEEK'S BLOG

[02/11/02 2:26PM] LILLIAN VERNON GETS 10X EMAIL RESPONSE
Fr: Alexis Gutzman

Lillian Vernon (the company, not the woman) tells me they are
increasingly bullish on Web sales replacing catalog orders. After
September 11, Vernon's retail stores were able to mark down their
prices to reflect consumers' newfound reluctance to spend. But
since Vernon's holiday catalogs were all either being printed or
in the mail, they didn't have too much flexibility to change
prices.

So, LillianVernon.com did an email marketing campaign to their
opt-in list, offering 20% off retail on anything in the store.
The conversion rate was 10 times the usual for an e-mail
campaign. As the holidays drew nearer (and retail stores cut
prices further), they increased the offer to 25% off, with
similarly stunning results. In case you live in a cave without a
mailbox, Lillian Vernon has 8 catalogs with 24 million customers'
addresses.

They're not yet collecting e-mail addresses from their phone
order center -- the next obvious step. They told me that when
they did a three-day trial asking customers (to the phone center)
for their e-mail addresses, 30% of callers had e-mail addresses,
and 60% of those wanted to be contacted by e-mail (opt-in).
Lillian Vernon, famous for personalized coasters, and other stuff
you'd find at Grandma's house, would not seem to be a
particularly tech-savvy audience, so 30% sounds pretty good to
me.

[02/08/02 5:02PM] BIG ONLINE ADVERTISER NEXTCARD TAKES A DIVE
Fr: Anne Holland

Pesach Lattin, editor and publisher of the generally irreverent
AdBumb newsletter for online media buyers and brokers, just sent
out an emergency bulletin revealing that NextCard, one of the
Web's largest advertisers, has just been shut down by Federal
regulators for "unsafe and unsound practices." Please note: the
practices that were unsound were not their advertising methods,
but rather their financial practices.
http://www.adbumb.com

[02/06/02 10:13AM] HOW TO WIN BEST ONLINE AD AWARD
Fr: Anne Holland

What does it take to achieve online advertising greatness? (Or at
least get a big gold star on your report card.)

When the producers of yesterday's Online Advertising Summit in
NYC, announced their Top 10 Online Ads of 2001 contest winners, I
badgered the three judges to find out how they decided which
campaigns were the best.

Shawn Gold, President/CSO eUniverse:
"- Considerations of metrics/ROI
- Integrated media consideration, where applicable. How did it
make the total communications work harder.
- How it uses the medium in the creative. Is it interactive, is
it viral, does it initiate an ongoing relationship.
-I also looked at the qualitative issues around the creative
execution. Does it effect you emotionally, embody the brand
values, etc.

Edward Kim at Unilever:
"1) creativity
2) meeting brand goals/objectives
3) innovation
4) reaching the right audience in the right place"

Tim McHale of Tribal DDB:
"1. creative solution
2. sophistication of metrics/ROI
3. use of online in a rare business category
4. diversity of business application"

The winning ads, which you can see at the link below, along with
the other 100 nominees that didn't make the final cut were (in
alpha order):

A.I. Web-marketing Campaign
Budweiser and O'Doul's Advertising Campaign
IBM Innovations Campaign
Kellogg's Corn Pops - Strange Animation
Microsoft Campaign: Windows XP Launch
Nexium - The New Purple Pill
Pepsi: Britney Spears-Oscar Campaign
Playboy.com/Jack Daniel's Hef Mega Ad Campaign
Taco Bell / Xbox Campaign
Volvo "Road to the S60" Campaign
http://www.onlineadvertisingsummit.com/index_toptencampaigns.html

[02/05/02 10:09PM] SPAM COMPLAINTS RUN 15:1 RENTED VS HOUSE LISTS
Fr: Anne Holland

Freelance ad guy S. Tristan Hartley (who left the high life as
Bozell's Interactive Technology Director to return to the good
life in Omaha NE) emailed in his current experience on the bad-
names-in-b2c-"opt-in"-email-lists front:

"I've built several mail campaign management centers allowing my
clients to send/manage/track their email campaigns. I started
banning rented lists about 9 month ago. I have a similar policy
to Ben, shutting their accounts down, yet a couple clients still
try to sneak them by. Personally, other than my philosophical
beliefs completely 100% against spam being compromised by
association, I don't get burned by them doing it as I go the
extra step of putting each clients mail center behind its own
domain with them listed as all but the technical contact. Thus
resulting in them dealing with all the blacklist problems and
complaints.

But I can definitely tell when a rented list has been used.
Complaints easily run 15 - 1 versus an opt-in list (and the 15 -
1 ratio is conservative!!!)

To get around my shut down policy, I've seen clients hire temps
to transcribe rented list addresses into their web-based personal
address book or manually enter them through their opt-in sign-up
form and even having a new hires claim that it is "his/her
personal contact list" from a previous job. It is quite
interesting to give them a lesson in reading a log file or
showing them the date-stamps on each record in the database--you
had 60 sign-ups an hour for 8 hours a day the last 15 business
days straight...hahaha.

Also, The Story of Nadine [see link further below] also hit home.
I have one address on sh2.com that someone from the domain
sh3.com mistakenly entered (which has been confirmed). That was
about 3 years ago and today that address receives about 8 mails a
day, some of which are even from 'reputable' marketers."

[02/05/02 9:97AM] ETRADE'S EMAIL AD AUDIO TOO DARN LOUD
Fr: Anne Holland

How loud should your rich media email be? I've heard some
complaints this morning from folks who just received a new eTrade
campaign in their in-boxes sent via RadicalMail. My advice,
assume the recipient's speakers are set on high and their
office/cubicle is very quiet. Anything that would seem blaring is
too loud. It's not like TV or radio where there already was a
constant noise level. Do you really want recipients first (and
only) reaction to your lovely rich media campaign to be "Oh my
god, how do I turn this thing off?!"

[02/05/02 9:14AM] ONLINE SHOPPING PLUMMETS DURING SUPERBOWL
Fr: Anne Holland

According to new figures from ComScore, during the Superbowl
Internet visitors dropped by 23%, and online buying plummeted by
24%. That's not just representing people watching the game,
that's also people who were drinking too much to type properly.

[02/04/02 6:16PM] UNDERBELLY OF EMAIL LIST RENTAL BIZ: PART II
Fr: Anne Holland

Boy - my Blog of 1/30/02 about the ugly underbelly of the email
list rental business has generated a lot of positive feedback.
I'm feeling like the Fox News of Internet marketing. But, hey,
it's all true and people should know. Here's a letter you'll
enjoy from Sherpa reader Ben Chestnut of MailChimp:

"I run a product that helps small companies deliver HTML emails.
I've found that whenever a client uses a rented list (and not the
list they collected on their own site), spam complaints
skyrocket, and we get all kinds of warnings from the spamcops and
blackhole list sites. They end up getting so burned, that they
never go back to rental lists.

It got to the point where we now don't allow rented lists
anymore---our users have to check a box that verifies that "all
recipients specifically requested this email from me." Users in
violation of this rule get their accounts shut down. My advice to
all my clients is to stay the heck away from rented lists, and to
collect your own. It's the only way to get meaningful results,
and the only way to NOT offend a bunch of people, and taint your
brand."

Ben also forwarded a link to The Story of Nadine (see below),
which I swear you absolutely have to click on. This real story
starts when a woman mis-enters her email address into an opt-in
form on a sweepstakes site in March 2000.

The head of the ISP that the confirmation was sent to, noted that
it was a bad address and alerted the list owner. The name was
then sold on to be used by more than a dozen email marketers
including Harris Polls, OurHouse, SmarterKids, AT&T and Topica.
As of February 2, 2002 almost two years after the initial mis-
spelled opt-in, this email address has received 100s of messages
from marketers.

Worst of all, although the ISP has repeatedly requested various
list owners and list users to remove the name from their lists,
the mail keeps on coming. Plus some of the players involved - who
either rented the list or allowed their list host systems to be
used to send messages to that name-- include several supporters
of the new Truste anti-spam certificate: 24/7, Bigfoot
Interactive and Virtumundo.

My advice after reading the many letters readers sent in is,
check every single opt-in source yourself before renting a list.
I know if you have to get messages out to millions of names a
week to meet your goals, that's almost impossible. But it's the
only way to be safe.

Must-Click link to Nadine: http://www.honet.com/Nadine/

[02/04/02 4:15PM] WHAT MARKETERS REALLY WANT FROM CRM TECH
FR: Alexis Gutzman

On Friday, I interviewed Coremetrics, NetIQ/WebTrends, and
Responsys (which just acquired NetAcumen) about what they're
offering and what their clients are requesting with respect to
metrics. One message came through loud and clear: everyone is
looking for the benefits of CRM without the hassle of
implementation. All three are offering some kind of campaign
measurement that goes beyond Web site analytics. All three offer
implementation time measured in days, rather than months. Does
the availability of and demand for marketing campaign metrics
mean that the demand for CRM is dead?

Of course, CRM isn't dead anymore than the demand for the S-class
Mercedes is dead. It's just that in this economy, more people are
opting for the C-class. The metrics they are offering include
tying online marketing campaigns to sales, calculating ROI, and
calculating lifetime customer value. What's missing? 50+% failure
rate of CRM implementation, multi-million dollar up-front
investment cost, and multi-month implementation. Right now,
there's no multi-channel component, but all three systems will
let you export your data for integration into your existing
offline systems.

Interestingly, the key that most marketers are looking for from
CRM -- the ability to mail a subsequent campaign based on Web
site activity and responses to previous marketing campaigns -- is
available in this CRM-light that these three companies are
offering. CRM may provide a 360-degree view of the customer, but
marketers are satisfied getting the view of the customer that
relates to their ability to target the customer based on
previously expressed interests, and frankly, I can't blame them.

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