Hope I’m not too disruptive here, but I disagree with a lot of what was said. It is the responsibility of every business owner to make the most profit from whatever assets it has. For a company that does most of its business over the internet, e.g. a content provider, email can be its distribution means, its marketing means, and a revenue source since rental can provide more than half of its income. To not do this, simply for altruistic reasons, is an actionable legal issue for stockholders (obviously, if too much use causes reputation damage or fatigue, that’s different).
There is nothing wrong with advertising as long as the CANSPAM conditions are met. I never asked to have commercials as I watch television, but I know they pay the freight, I think most people are equally accepting with email as long as the source is clear and the option to unsub is presented (i.e. not spam). And I disagree that this kind of use of an email list presents a unique ethical issues, if there is an issue here then the issue is everywhere.
Marketing literature from that past fifty years advises that advertising must be interruptive in nature in order to be effective. Email is effective exactly because it is a one-to-one communications medium and it more difficult to ignore than broadcast mediums.
Every advertiser knows that only a small fraction of the people he advertises to will be a customer. Perhaps every customer for chewing gum is not a customer for teeth whitening. But logically that list will have a higher percentage of interest and therefore a better, more profitable response rate. But you don’t know who those customer are unless you interrupt everyone on the list. Its just like I have to see television commercials for feminine hygiene commercials, even though I’m never going to be a customer because there are a lot of potential customers in the audience.
I understand that spam is rampant and very annoying to email users. But that’s not us. Renting a list from a reputable provider should not be a problem or a philosophical issue, any more than buying time on radio or space in a magazine. Of course you have to consider the source, the reputation and past reponse, but lets not paint all list rental sources with the spam brush, its just not true. Yes there is risk, but business is all about risk.
And you can’t generalize about effectiveness or profitabily on any of these methods. I can name a dozen companies that do just great renting lists. And someone must be doing well with co-regs, otherwise there wouldn’t be an industry. The point is you have try it, you have to study it, you have to objectively see it if it fits into your strategy. If you aren’t, then you aren’t doing your job and your company will suffer.
Chris, by the way, while in theory spam traps are supposed to work that way, they are frequently used to sabotage legitimate lists (motive was political in our case…).
My two cents.
tk
5 08.11.09 at 8:08 am
Tim,
First, let me be clear that we’re discussing a fundamental difference in emailing strategy. I respect your response to our blog post and am glad this has triggered debate! It would seem, in my industry experience, that this has been a subject that people fall on one side or the other without really knowing the deeper reasons behind why there are different factions around whether list rental is a good idea or not. Let’s hope this continues the discussion and we’d love to hear the thoughts of other readers of this blog.
I posit that your assertion of list rental being a good source of revenue is only a small piece of a much larger picture. List rental as part of an email marketing strategy can make sense in some cases but in the vast majority, it doesn’t. The long-term damage that renting a list from some entity and taking it on faith that those email addresses are valid and have recipients sitting behind it that are accepting of the mail you’ll send them outweighs the monetary gain. If you have a clear channel setup to receive email addresses directly and set expectations with recipients correctly, then list rental could severely damage the effort you’ve put into creating a robust direct marketing relationship. The interruptive nature of marketing is abstracted a bit with email because I can check it when I’d like. And if I don’t like what I get whenever I do check it, I let the sender (via unsubscribe) or ISP (via spam button) know. Are there certain situations where a list swap or rental could result in me getting an email that I don’t throw away? Of course. 99% of the time, though, I see marketing entities and rental providers enter the situation and abuse the recipient by too broadly targeting or flat out not showing the relevance – if the email address is even valid and makes it that far.
You mention TV and commercials. I can turn a TV off or change the channel if a station is marketing too much or incorrectly to me. With email, we can’t expect recipients to recycle through email addresses every time they start getting a deluge of unwanted and incorrectly marketed email. That’s why ISPs take complaints so seriously.
We both know CAN-SPAM compliancy shouldn’t be the end game of whether an email meets the litmus test of possibly providing conversion. If we’re only worried about conversion and revenue, all we have to do is look at spam’s reason for existence. However, as part of a long term marketing relationship, email should go beyond CAN-SPAM compliancy – and list rental seems orthogonal to that.
Everything from targeting, cross promoting (the gum chewer and teeth whitener), and reengagement/win-back programs can be done without renting lists. If you have a well defined and sophisticated marketing program, the recipients you’ve acquired should be sufficient. I don’t understand how you can achieve these things only by bringing 3rd party lists in-house. Again, the risk of irrelevance and user reaction is too high.
Note, in my blurb, I didn’t say all list rental companies are bad nor is every person who rents a list bad. I, too, know of several companies out there that have decent list rental services. But, I think it’s also about the reputations of the folks who run them - the ones who want repeat business and a loyal customer base provide good lists to the best of their ability. Sometimes, though, that isn’t enough since an email address can’t be measured until something has been sent. There are a lot more companies that will collect email addresses in any way possible, slap a marketing spin on them to say they match criteria X, Y and Z (whatever the marketer is looking for), collect a check and then hand the list off. Their culpability ends there (especially if you’re in a different country).
So, I ask the blog audience, what can list rental do that an organically grown, directly acquired email list cannot? It’s one thing to serve up your content to another party to send on your behalf (like some of the list managers out there), but to assume the liability of those lists by sending from your system is dangerous.
To that end, Bronto has determined that rented lists are unacceptable to use with our platform. This is a deliberate decision that has been made with a lot of thought and consideration for different marketers’ needs. But, in the end, we believe that sending email to rented lists will cause brand reputation, deliverability, and conversion issues over time with recipients. If and when the market decides to have more good players with good technology in it, we’ll reevaluate this stance and will support those services that do have good practices. This is not altruism. This is good old fashioned business engineering for us – we grow our business by keeping existing clients sending to recipients who don’t adversely react to the mail sent to them (thereby ultimately finding it useful enough to engage) and by attracting prospects who also follow this tenet. Bronto is successful because we have proven time and again that by not having clients engage in list rentals, our value proposition increases.
Finally, I don’t think testing is required to determine whether list rental can have a negative impact on a marketing program. The statistics are already there for our clientele and from the ISPs and from recipients and…well..you get the picture. Preponderance of abusing list rental, alongside recipients, is too high to allow for the edge cases where it might wildly be successful.
Thanks for your input and the challenge of articulating these thoughts out.
Chris@Bronto
the main thrust of the post is that list rental is bad bad bad, but things heat up in the comments section (first salvo excerpted here). when I sign up for stuff, I am accustomed to seeing an opt-in "to receive emails from trusted partners." I always leave this unchecked, but for those who do, where's the harm?