E-Mail Fees Could Change E-Commerce Economies

The news that AOL and Yahoo are planning to roll out a certified e-mail delivery service based on partner company Goodmail Systems’ CertifiedEmail methodology is leading some e-mail marketers and related providers of e-commerce services to conclude that a sea-change — largely unwelcome — is underway in their industry.

Paying for premium access to e-mail recipients could have just as large an impact as the “net neutrality” issue, stated Peter Koeppel, founder and president of Koeppel Direct, which counts DirecTV and Premium Nutraceuticals as clients of its direct response television media buying service.

“Net neutrality” is the controversial idea that telecom providers should charge additional fees to companies that send large files — music or videos or consumer VoIP services — to their clients over the Internet. “These two movements could change the economies of Internet commerce, so it will be interesting to see how it all plays out,” Koeppel told the E-Commerce Times.

Adding Another Level

At face value, the new services planned by AOL and Yahoo do not appear to represent dramatic change to existing policies. AOL already offers two levels of service to e-mail marketers; this new service is merely an additional level, AOL spokesperson Nicholas Graham told the E-Commerce Times.

For an additional fee that will be set by Goodmail, he explained, marketers can request that their e-mail be handled in a manner that will result in a more trusted response from customers and a better return on investment for them.

That is because recipients will know that the distinctly packaged e-mail is not fraudulent — e.g., a phishing expedition. They will be assured that it is a legitimate message sent from a marketer with whom they have opted in to receive communications.

Since the news of this new program broke last week, several erroneous reports about this service have since circulated, Graham maintained, including scare stories about recipients receiving unwanted spam from vendors that have signed onto the service, and e-marketers finding their bulk e-mail deliberately shunted to a spam inbox.

“If you are a large bulk sender of e-mail that opted in and is following our unsolicited bulk e-mail policy, those e-mails will be delivered,” Graham insisted.

“Where those e-mails end up is subject to the actual recipient,” who can always unsubscribe, he noted.

Yahoo could not comment in time for this article.

Loud Protests

The outcry against the plan is not entirely unwarranted, at least from marketers’ perspectives.

For starters, a new fee structure by the major providers of e-mail could result in an increase of costs for e-mail campaigns, which Graham did not deny.

“I’ve seen reports that said this could double the costs of an e-mail market campaign,” Koeppel said, adding that such projections make sense. “The costs of delivery now are fairly minimal, so any new costs could increase the costs of delivery significantly.”

Other potential developments could be the rise of an assured delivery auction environment, he continued, much like the way bidding has intensified around certain Google keywords.

The companies most affected would be those that depend on high volume, low-cost targeted marketing, Sean Rollings, senior director of Product Marketing for NetSuite told the E-Commerce Times.

On the positive side, Rollings said, marketers might find that if a premium service fee structure moves beyond Yahoo and AOL — which target individual consumers — and into ISPs supporting larger businesses, it could actually open up more business-to-business targets for direct marketing. “Company SPAM filters would still likely weed out the onslaught,” he noted.

Changing Relationships

Providing premium access to some e-mail marketers could change the relationship ISPs have with their users, Des Cahill, CEO of Habeas, an e-mail reputation and accreditation service provider, told the E-Commerce Times.

ISPs like Yahoo and AOL form two sets of relationships — with companies that use them to advertise and with their customer base, he explained. The latter, he said, trusts the ISP to deliver the information it wants.

“If, as a consumer, you find out that the ISP is making money off of you by altering the way you get e-mails that you want, that could lead to a significant erosion of trust,” Cahill pointed out.

For instance, a consumer who opted in with a mortgage provider to receive new rate quotes or other products might find that Equifax’s e-mails would take precedence over the provider’s if it didn’t sign up for the service. Equifax is one of the companies that has signed up for its new service, AOL announced.

Habeas’ customers include Publisher’s Clearing House and E-Loan.

The service could alienate corporate users of AOL’s and Yahoo’s marketing services as well. “I believe retailers, especially those with a known brand, [are] refusing to play along,” Steven Blinn, president of Blinn PR, told the E-Commerce Time.

“Large companies like Costco, Home Depot, Wal-Mart, etc. — companies that send out e-mails by the millions to consumers — they are going to fight this,” he predicted, partly for financial reasons and partly because the issue is touching a nerve across the Internet. That is, some companies and service providers are maneuvering to establish themselves as financial gatekeepers to the Internet.