Spam Burns You:
Why Bulk E-mail is Bad Business
Linda Formichelli & W. Eric Martin
Shames knew something was wrong when her latest advertising
campaign resulted in ten new subscriptions for her regional
lifestyle magazine, Susquehanna Lifeand more than four
a one-person operation I'm always looking for cost-effective
ways to increase my readership, so I thought it was fortuitous
when I received an e-mail from a company called IMC Marketing
that said they could e-mail my ad to 250,000 people for only
$199," Shames explains. "I put together an ad, and the company
promised to send it out on the following Monday. I was so
Monday, the complaints started trickling in. "Some asked how
I got their e-mail address. Others wrote nasty letters and
reported me to the FCC, the state District Attorney and my
Internet Service Provider (ISP), who gave me a big reprimand,"
says Shames. "I felt like a little kid getting slapped in
the face and not understanding why. I had never heard of spam
until people started reacting to my ad." (IMC Marketing declined
to be interviewed for this article.)
is the popular term for unsolicited commercial e-mail that's
sent in bulk. The name most likely comes from a Monty Python
skit featuring a group of Vikings in a restaurant who repeatedly
sing an annoying song consisting mostly of the word "spam."
By the end of the skit the spam song, which started out as
background noise, becomes so loud that it completely drowns
out the other participants.
isn't the first small business owner to be burned by spam.
Short on funds and looking for ways to stretch their advertising
dollars, many small business owners are duped by bulk e-mail
companies into believing that spam is a low-cost, highly profitable
and acceptable way to advertise their products and services.
#1: Bulk E-mail is Low Cost
Well, it's not really a mythbulk e-mail is incredibly
inexpensive. It seems like a gift from the small business
gods: Cash strapped entrepreneurs can send an e-mail ad to
millions of potential prospects without buying an expensive
direct-mail list and without the cost of printing, paper and
stamps. But the reason e-mail mailing lists are so cheapand
the drawback for small business owners looking to reach a
particular marketis that they're completely untargeted.
Bulk e-mail companies use software to "harvest" the e-mail
addresses of Internet users from personal Web pages, discussion
forums and newsgroupskind of like pulling random names
from the phone book. No e-mail address is safe: Even non-U.S.
e-mail addresses are harvested and sold on lists, as Erica
Shames learned when recipients from as far away as France
and Hong Kong asked to be removed from her mailing list.
would your customers like to receive a direct mail ad from
youpostage due? Another reason that spam is so inexpensive
is that it shifts the cost from the advertiser to the recipient.
Some e-mail users pay for the time they spend downloading
e-mail, which means they're paying for an ad they didn't ask
for. And the bulk of spam is so great that $ 2 to $ 3 of every
e-mail user's monthly bill goes to spam-fighting efforts and
equipment upgrades by ISPs.
#2: Bulk E-mail is Profitable
"Earn Thousands!" trumpet the ads for bulk e-mail companies.
That wasn't Erica Shames's experience. Out of the 250,000
people her message went to, Shames received only ten ordersa
less-than-dismal .004% response rate. Since she paid $ 199
for her mailing list, it cost Shames $ 20 for each of the
$ 15 subscription orders she received. "It could have cost
her a lot more," says Kelly Thompson, founding member of the
Forum for Responsible and Ethical E-mail (FREE), a spam prevention
advocacy group. "If her ISP had had a policy of not allowing
spam from its system, as many ISPs do, she could have lost
her e-mail connection and Web site. The $ 500 to $ 1,000 it
costs to build a Web site is no small expense for a small
#3: Bulk E-mail is an Acceptable Way to Advertise
That spam is acceptable is a myth propagated by late-night
infomercials, traveling conferences and, yescommercial
e-mail. In a survey of 1,036 Web users by the San Jose, CA-based
firm World Research, 43% say they hate spam and 25% say it
bothers them. Only 7% claim they "love to get spam." Bigger
companies know that bulk e-mail is a good way to trash their
reputations, which is why you'll never get an unsolicited
ad from IBM or Wal-Mart in your mailbox. "I'd never buy anything
from a company that sends me spam," says Craig Maher, an illustrator
in Poughkeepsie, NY whose AOL account gets four to five spam
e-mails per day. "Most of the spam I get is for porn Web sites
or pyramid schemes, so even if a spam is from a legitimate
company, the negative association is there."
may think, "Even if only seven percent of Internet users 'love
to get spam,' that's still a lot of potential customers,"
but take heed: Not only is spam annoying to the vast majority
of your target audiencein some cases, it's illegal.
"It's now illegal to send spam with forged sending information
or a misleading subject line to Washington State residents,"
says Dan Zerkle, the legislative contact for FREE. (Even bulk
e-mail companies know that spam is unacceptable, which is
why they almost always falsify sending information so the
e-mail can't be traced.) Similar laws in California require
senders of bulk e-mail to include a valid e-mail address or
toll-free number and specify damages of fifty dollars per
message for violation of an ISP's acceptable use policy. A
new Nevada law lets residents sue spammers for $ 10 per unsolicited
message. Such laws target not only the people who actually
hit the SEND button, but also those who "cause the e-mail
to be sent"so you can be looking at a business-destroying
criminal lawsuit even if it's a bulk e-mail company that actually
sends the message.
fact that spam shifts the cost of advertising from the sender
to the recipient, wreaks havoc on ISPs, and breaks several
state laws is enough reason to reconsider using it. But for
the small business owner, the most compelling fact is that
the majority of Internet usersand your potential customersloathe
are no spamming success stories," says Zerkle. "I've never
heard of a legitimate small business that spammed more than
once because they find that the bad faith it creates is like
a wrecking ball to their company." Asked if she has any advice
for small business owners considering adding bulk e-mail to
their marketing arsenal, Erica Shames has this to say: "Do
not get involved in this at all."
Alternatives to Bulk E-mail
Here are three free ways to get the word out about your businesswithout
getting in trouble.
Opt-in e-mail lists include only those people who have specifically
asked to receive information. You can create your own opt-in
list by adding a section to your Web site asking interested
visitors to leave their e-mail address. "You won't get into
trouble with opt-in mail," says Dan Zerkle. "But you have
to set it up so that people who opt in are sent a confirmation
e-mail that they have to reply to. This ensures that the people
who are on your list really asked to be there, and weren't
put there by someone else."
are also services, such as Postmaster
Direct, that will send your ad to a list of people who
have opted-in to your category of advertisement.
You display a banner on your Web site that brings up an ad
from other banner exchange members every time someone visits
your site. A banner is a small, banner-shaped ad (hence the
name) with graphics and a link to your site. For every two
people that visit your Web site, your own banner will appear
once on another member's site. Banner exchanges are a popular
(and free) way to get the word outLink Exchange, for
example, has more than 250,000 participants. Some banner exchange
programs cater to certain types of businesses or demographic
markets, and some will design a banner for you gratis.
A signature (or "sig") is like letterhead for your e-maila
few lines at the end of your message that lists your business
name, contact information and even a link to your site. This
information automatically appears in every e-mail message
you send out, so the visibility potential is great, especially
if you participate in online discussion groups. Just be sure
not to make the sig too long; four lines is considered the
maximum. To find out how to create a signature for your e-mail,
consult the manual for your e-mail software or browser.
2001 Linda Formichelli & W. Eric Martin, used by permission.
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Formichelli and W. Eric Martin are a writing couple who provide
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