AOL TAKES ON BULK E-MAILERS;MOVES MAY DAMAGE ONLINE DIRECT MARKETING EFFORTS

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The Internet's status as a direct mail medium took a hit last week as America Online began deflecting unsolicited messages from the electronic mailboxes of its 6 million subscribers.

AOL responded to a deluge of user complaints about junk e-mail by blocking commercial messages from five bulk-mail distributors with a history of targeting the service's users.

RESTRAINING ORDER

But on Sept. 5, the U.S. District Court in Philadelphia issued a temporary restraining order against AOL after an appeal by bulk e-mailer Cyber Promotions.

"The order temporarily restrains AOL from blocking e-mail from Cyber Promotions to our subscribers who want to receive it," said David W. Phillips, associate general counsel for AOL.

Mr. Phillips said AOL may appeal that decision. The same day it was handed down, AOL began offering what Mr. Phillips called "e-mail empowerment tools," allowing subscribers to block all e-mail, e-mail with attachments or e-mail from specific addresses.

Cyber Promotions offers two core services: an e-mail address-harvesting program called Floodgate and an in-house "autosender" program for mass mailings.

"They're using this as a ploy," Cyber President Sanford A. Wallace said. "We feel AOL sees us as a competitive marketing threat."

While the Direct Marketing Association can help consumers block regular unwanted mail, it doesn't have a service to remove names from e-mail lists. But, working with the major online service providers and the Interactive Services Association, the DMA has drafted principles for appropriate use of e-mail in marketing.

`UNIQUE CHALLENGES'

Online marketing "has unique challenges in a way print mail doesn't. Anybody can be a marketer on the Web," said Connie Heatley, DMA senior VP-communications and public relations.

While an e-mail campaign might be attractive to marketers because it's less expensive than a direct mailing, agency executives believe mass e-mailings defeat the purpose of true target marketing. They also run more risk of alienating consumers, who pay for the time spent online reading e-mail.

"I don't think it's effective. You don't evaluate this on cost, you evaluate this on return," said Mike Troiano, CEO of Ogilvy & Mather Interactive, New York, agency for IBM Corp. and American Express Co.

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