Services vie to handle direct e-mail pitches

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As e-mail becomes one of the hottest online marketing tools, the business of outsourcing it is becoming increasingly competitive.

Companies that want to ease the burden of handling the complex, yet critical, delivery of e-mail for direct marketing now have an array of e-mail management companies to tap.

This week, InfoBeat adds Forbes Digital Media and Wired Digital to a growing client roster that already includes MSNBC and American Express Co.

And InfoBeat rivals, including L-Soft International, Critical Path, the Electric Mail Co. and Revnet Systems, are busy signing up new corporate accounts. It's a market that Forrester Research predicts will grow to $1 billion by 2002.


E-mail, at first, would seem an unlikely candidate for outsourcing. Even the greenest Internet newcomers manage to zap mail out to friends and associates. But when companies need to send a large volume of mail, deliver timely information, or customize messages, e-mail can turn from a no-brainer into a migraine, quickly.

"It's incredibly difficult to send unique messages to unique people, simultaneously and in volume. You get all these complexities of volume with all the complexities of large groups of data," said David Williams, president-CEO of Tribune Media Services, an InfoBeat investor and customer.

The Tribune's Orlando Sentinel Online is using InfoBeat to send out Movies by Mail, a weekly movie listing individualized by ZIP code, to 5,000 Orlando-area residents. The Sentinel also has a Mid-day Update service, in which it sends daily news updates to subscribers via e-mail, which it manages in-house.


Even relatively simple e-mail marketing efforts can devour resources.

Merriam-Webster, which runs a Word of the Day e-mail list to build brand awareness for its dictionaries, now has 35,000 subscribers.

"We did it ourselves for a while, but it got too big," said Kara Noble, managing editor of electronic publishing for Merriam-Webster. "We've got limited bandwidth and server output. We wanted to put those resources into the Web."

Now, Merriam-Webster employs L-Soft International--makers of the widely used Listserv software--to mail out the Word of the Day. For an average cost of a penny to a dime per message (or an equivalent monthly fee), L-Soft and other e-mail service bureaus will do the following:

  • Quickly send out a company's messages from their servers.

  • Deliver customized messages to appropriate list segments.

  • Add and drop users as needed.

  • Weed out redundant or dead e-mail addresses.

  • Ensure that lists are free from unsolicited e-mail, or spam.

    Reliance on service bureaus, however, comes at a price and puts the corporate image in the hands of an outsider. If a media company has a daily news feed that doesn't get delivered, that can quickly erode customer perceptions of the brand. These problems are not unheard of.

    "I've had inconsistencies with some vendors, problems with day-to-day delivery, that cause some sleepless nights," said Andrew Bourland, publisher of the ClickZ Network. One vendor had no ability to moderate the HTML edition of the company's list, and some users sent out messages to the entire list, he said.


    Another vendor had incomplete deliveries, and no way of tracking who did or did not receive the message, Mr. Bourland added.

    But most marketers seem satisfied with their e-mail service bureaus.

    John Thomson, director of new media for Sony Music Canada, said before outsourcing, the company didn't have the resources to do big mailings.

    "We had no way of corresponding with or monitoring our fans. Revnet has made it simple for us to send out messages to 30,000 to 40,000 people quickly," he said. Now, Sony Music Canada has a mailing list for each of its domestic artists, with more than 150,000 fans who have subscribed.

    "It's analogous to catalogs," said David Goodtree, senior analyst at Forrester Research.

    For example, J. Crew doesn't mail, print or assemble its catalogues. Rather, it outsources the assembly, distribution, and merging and purging of mailing lists to experts in the field, he notes.

    Noah Shachtman is a free-lance writer based in New York.

    Copyright June 1998, Crain Communications Inc.

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