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The cost of adding 'rich e-mail'

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Publishers looking to extend their brand online might find e-mail to be a simple, cost-effective way of reaching new subscribers.

So-called rich e-mail, a way of delivering a Web page-like document via e-mail, is increasing in popularity as a means of offering more compelling content than plain text. Advertisers find the medium a good way to communicate with their customers.

In this month's Web Price Index, NetMarketing found a median price of $28,200 for adding a rich e-mail service for an existing publication. The prices ranged from a low of $8,000 to a high of $150,000, and included software and training for the publication's staff, as well as several Web pages promoting the new service on the publication's existing Web site.

Increased ad revenue from marketers trying to reach a specific audience can quickly offset these costs. E-mail newsletters generally are well-targeted, and many companies find them a good way to reach qualified consumers.

The daily advantage

"Our demographics are wicked," said Jason McCabe Calacanis, editor and publisher of the Silicon Alley Reporter. After founding the monthly print magazine, he began a daily news service via e-mail, and later an HTML e-mail version.

"It's incredibly targeted," he said. "If it's daily, you know it's a commitment. You have to be interested in these companies if you're subscribing to this."

Mr. Calacanis finds the daily components help increase the value of the Silicon Alley Reporter brand, especially the HTML version.

"People love it. It's much more effective and it gives us the ability to do things that are more compelling."

Everything has its down side though. The HTML newsletter is "more work as a publisher -- it adds at least an hour to your day," Mr. Calacanis said. "And it costs more money to produce.

"Daily news will be the better business to be in. It's more easily scalable. For every 10,000 new subscribers to the print version, I have to kill another tree and spend more on postage."

Promotional hurdles

Users aren't won over immediately. Mr. Calacanis cites promoting the HTML version to existing subscribers as one of the hurdles for this side of the business.

Currently about 35% of the Silicon Alley Reporter subscribers receive the HTML version, but 80% of new subscribers take advantage of the HTML option.

For advertisers, the ability to reach the targeted base of an e-mail list with a media-rich message is a boon.

"It's great for branding campaigns especially," said Mr. Calacanis. "If someone wants to take action, they just click on it."

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