THE CATALOG MARKETER

Banners Still Wave

Originally, the banner ad was touted to be the next generation of the outer envelope of a direct mail piece or catalog cover. However, marketers' initial expectations of this medium have gone somewhat unrealized. Poor click-through and conversion rates may make you want to rule out banner ads as a part of your marketing mix. But don't do it just yet. There are still some extremely effective avenues to explore in the banner advertising arena.

Keyword banner advertising is one of these avenues. Search engines derive a great deal of their revenue from selling words. Buying a keyword from a search engine allows marketers' banner advertisements to appear above search results only when a particular word is searched for.

Keyword marketing allows catalogers to reach individuals at the point of interest. As an individual searches for the word "sweater," for example, the result page features an advertisement from a clothing cataloger. With costs ranging from $50 to $75 per thousand impressions (ad views) and yielding strong click-through rates and even more impressive conversion rates, keyword marketing has emerged as a cost-effective medium for catalog marketers.

Beware the Purchased Name

Perhaps the most controversial use of keyword marketing is the purchasing of a competitor's name. When an individual does a search on, say, AltaVista looking for information about one company, an advertisement may appear for another company altogether because it purchased its competitor's name for keyword advertising. Although many court cases have come and gone focusing on this issue, no precedent has been established that finds fault with the purchasing of a competitor's trademarked name. This would be the off-line equivalent of allowing a competitor access to your house file for marketing purposes. But while purchasing competitors' names is not looked upon as the most ethical practice in interactive marketing, it should alert you to quickly purchase your own company and product names to ward off any such efforts from would-be rivals! E-mail Rules

While the banner ad continues to play a role in the online media mix, e-mail is online marketers' current vehicle of choice for attracting new and repeat customers. For a cataloger, e-mail is a dream medium. It is measurable, reasonably priced and can be used in a variety of ways throughout the marketing process. However, there are some critical rules to employing e-mail successfully that a cataloger should heed.

Many old cataloger truisms and techniques are frowned upon in the virtual/electronic channel. But with every e-mail message we send, marketers take another step closer to understanding the most effective use of e-mail as a marketing medium and the most appropriate way to use it to communicate with prospective and current customers via e-mail.

Can Spam

Just as we avoided any association with junk mail, we now hope to avoid being labeled a "spammer." The term "spam" has made an unlikely journey into the direct marketing community. The term is borrowed from a Monty Python skit in which every menu item contains Spam luncheon meat, and the word was repeated over and over again, becoming increasingly annoying. It was originally used in the early chat rooms to label people who continually posted commercial information. In the early '90s, the term took on new meaning as bulk e-mailers harvested available e-mail addresses and began sending a barrage of unsolicited offers to those addressees.

As the amount of spam has grown, so, too, has the ability to block or filter out these unwanted messages. Individuals and Internet service providers (ISPs) are increasingly utilizing e-mail filtering tools. As marketers try to increase their return on investment in this new medium, it is essential to understand how and why e-mail messages are blocked from ever being read. Your customers may not be getting your message!

ISPs can control what e-mail an individual receives. To do so, they utilize a router to analyze all incoming e-mail. When e-mail comes in from a certain e-mail address or range of IP addresses (i.e., all e-mails emanating from IP addresses starting with 140.000.00), or if the message contains specific words in the subject line, the router blocks those e-mails from getting into the network. Then the addresses of the senders are added to a filter table that is continually updated.

ISPs are not alone in the attempt to block unwanted e-mail messages from being read. Most e-mail clients now provide tools for individuals to set up their own filters for their e-mail systems. By creating spam folders, users can automatically have messages either archived or deleted without ever seeing them in their inbox.

Know How to Say It

Catalogers who market by e-mail and want to avoid having messages to their customers filtered out need to understand the particulars behind the blocking of an e-mail message. Most of the filters examine the information typed into the subject line, which is often referred to as the "outer envelope" of any e-mail campaign. This is the vehicle that ultimately decides whether your message will be read.

Therefore, while e-mail represents the most effective new-media direct marketing tool, some traditional direct marketing tactics do not apply to it. Phrases like "free," "50 percent off" and "You're a winner!" have caused more envelopes sent by conventional postal mail to be opened than perhaps anything else. Most marketers would then assume that these successful phrases should be included in any subject line for a prospective e-mail campaign. However, these are the very types of messages that ISPs and filters look for to identify the sender as a spammer. Messages including these terms and others like them are automatically deleted or sent to a folder that exists only to house spam. Writing your subject line in all capital letters or using quotation marks or exclamation points will also set off the ISP's blocking mechanisms.

The best way, of course, to avoid problems with e-mail advertising is to send e-mail messages only to your current customers who want to receive them. Permission marketing is gaining increasing importance among marketers who want to be taken seriously. Asking individuals if they would like to receive communications via their e-mail address establishes credibility while saving marketing dollars that would otherwise be spent on uninterested recipients. The Internet is about interaction, and seeking and obtaining permission for an interaction confirms that the recipient is willing to hear your message and establishes that e-mail is the proper marketing channel the potential customer wants to use to interact with you. Bounced Messages and the Retry Effect.

Just because an e-mail message is sent does not mean it is received. An often-overlooked aspect of e-mail marketing is a campaign's bounce rate. The bounce rate refers to the number of e-mail messages that were sent but, for whatever reason, were undeliverable. Examining the messages that bounce back to the sender can reveal some important information about the e-mail address data that have been collected.

Most catalogers are accustomed to working with National Change of Address (NCOA) to update their mailing lists. But with no e-mail change-of-address procedures presently in existence, marketers must make it a priority to examine any problems with message delivery. It is essential to know that the messages you send are also being received. Assuming that e-mail messages are being delivered can result in poor customer service when they are not. So whether e-mail messages are sent from in-house or the mailing is outsourced, bounce-rate information should be collected and analyzed on a continuous basis.

Undeliverable e-mail exists in two forms: hard bounces and soft bounces. When the domain portion of the e-mail address-the part after the "@"- is misspelled or incorrect, the e-mail is bounced back to the sender as undeliverable. This is called a hard bounce, and most closely resembles the traditional "nixie" we are used to from the brick-and-mortar world. The most common cause for hard bounces is the guessing of domain names. Making the assumption that company names are also domain names creates a significantly higher hard-bounce rate.

In analyzing e-mail messages that resulted in a hard bounce, the domain portion of the address will often turn out to be correct. The recipient's e-mail server could be down, or a myriad of other technical problems might occur that could prevent the original e-mail transmission from being successful. Therefore, implementing a retry program is critical in every e-mail campaign. Resending all bounced e-mail messages will result in a portion of those messages getting through, which will allow for a more effective use of the data - your list of e-mail addresses - on hand. Soft. Soft bounces are the other type of undeliverable e-mail. Many times, e-mail messages are sent to the proper domain, but the name of the person is not accurate. Examining soft bounces can reveal a simple misspelling or, more importantly, the departure of the person associated with that e-mail address from the domain. The sooner a marketer understands that a customer or contact is no longer accessible through that e-mail address, the sooner they can attempt to communicate with the individual who has replaced them. This is especially important for business-to-business catalog marketers.

The No. 1 Rule: Respect Privacy
In every marketing message you send, respecting the recipient's privacy is essential. In other words, including unsubscribe or removal instructions within every e-mail has become fundamental. Affording the customer or prospect the opportunity to no longer receive your communications will give you a stronger credibility with that person as well as convey your respect for their privacy.

Most e-mail marketers think that they only need to provide one means of unsubscribing from their list, which is usually by allowing the recipients to reply to the message with the word "unsubscribe" in the subject line. While this is an important removal mechanism and should be included in every message, a second option must also be offered that takes into account the possibility that an e-mail address has been forwarded. If a user has forwarded their e-mail to a new address and then chooses to reply and unsubscribe from an e-mail list, the list's proprietors will not be able to recognize the user. The removal reply will come from a new address that is not currently in the database, and the e-mail's senders will not be able to unsubscribe that individual.

Having a link in each e-mail to an unsubscribe page that asks for previous e-mail address information will allow users to properly remove themselves from any future messages. And Be Quick About It

Offering recipients the opportunity to unsubscribe is a terrific gesture, but unless the suppression of that address actually goes into effect, it is meaningless. Turn-around time for removing unsubscribes from an e-mail list is a critical step in ongoing communications with any individual. No further messages should be sent until the previous message's unsubscribes have been removed from your list. If someone has taken the time to inform you that this is not how they wish you to communicate with them, it is important to respect their request as well as their privacy and implement that change as soon as possible.

In Closing
New media has raised the bar for respecting customers' privacy and for the new customers' ability to have a say in the marketing practices of the businesses they patronize. Catalogers who choose to expand into this new world must learn the rules of electronic marketing and respect them. The consequences of not doing so may hurt their entire enterprise. The Internet has become a storefront, and the traditional catalog has become an e-commerce destination. Understanding the means by which to get buyers to these destinations has become the marketer's goal. E-mail and banner advertising represent two new channels for communication to potential and existing customers. Gaining a deeper understanding of these mediums will allow catalog marketers to achieve a greater return on their interactive marketing investment.

Jay Schwedelson is corporate vice president of Worldata, where he oversees strategic direction and new business development. Under his leadership, Worldata has become the industry leader in permission e-mail marketing services and interactive advertising solutions.

Schwedelson is active in the Direct Marketing Association, where he serves as a member of the Internet Advisory Board Committee, Catalog Council and List & Database Council, and Marketing Technology and Internet Council. Jay also serves as an advisory board member for the Association of Interactive Media and sits on the Council for Responsible E-Mail. He continues his position as the subcommittee chairman for The DMA's List Leaders E-Mail Committee.