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Article 1

When Spam Burns You:
Why Bulk E-mail is Bad Business
by Linda Formichelli & W. Eric Martin

Erica Shames knew something was wrong when her latest advertising campaign resulted in ten new subscriptions for her regional lifestyle magazine, Susquehanna Life–and more than four hundred complaints.

"As a one-person operation I'm always looking for cost-effective ways to increase my readership, so I thought it was fortuitous when I received an e-mail from a company called IMC Marketing that said they could e-mail my ad to 250,000 people for only $199," Shames explains. "I put together an ad, and the company promised to send it out on the following Monday. I was so excited!"

That Monday, the complaints started trickling in. "Some asked how I got their e-mail address. Others wrote nasty letters and reported me to the FCC, the state District Attorney and my Internet Service Provider (ISP), who gave me a big reprimand," says Shames. "I felt like a little kid getting slapped in the face and not understanding why. I had never heard of spam until people started reacting to my ad." (IMC Marketing declined to be interviewed for this article.)

Spam is the popular term for unsolicited commercial e-mail that's sent in bulk. The name most likely comes from a Monty Python skit featuring a group of Vikings in a restaurant who repeatedly sing an annoying song consisting mostly of the word "spam." By the end of the skit the spam song, which started out as background noise, becomes so loud that it completely drowns out the other participants.

Shames isn't the first small business owner to be burned by spam. Short on funds and looking for ways to stretch their advertising dollars, many small business owners are duped by bulk e-mail companies into believing that spam is a low-cost, highly profitable and acceptable way to advertise their products and services.

Myth #1: Bulk E-mail is Low Cost
Well, it's not really a myth–bulk e-mail is incredibly inexpensive. It seems like a gift from the small business gods: Cash strapped entrepreneurs can send an e-mail ad to millions of potential prospects without buying an expensive direct-mail list and without the cost of printing, paper and stamps. But the reason e-mail mailing lists are so cheap–and the drawback for small business owners looking to reach a particular market–is that they're completely untargeted. Bulk e-mail companies use software to "harvest" the e-mail addresses of Internet users from personal Web pages, discussion forums and newsgroups–kind of like pulling random names from the phone book. No e-mail address is safe: Even non-U.S. e-mail addresses are harvested and sold on lists, as Erica Shames learned when recipients from as far away as France and Hong Kong asked to be removed from her mailing list.

How would your customers like to receive a direct mail ad from you–postage due? Another reason that spam is so inexpensive is that it shifts the cost from the advertiser to the recipient. Some e-mail users pay for the time they spend downloading e-mail, which means they're paying for an ad they didn't ask for. And the bulk of spam is so great that $ 2 to $ 3 of every e-mail user's monthly bill goes to spam-fighting efforts and equipment upgrades by ISPs.

Myth #2: Bulk E-mail is Profitable
"Earn Thousands!" trumpet the ads for bulk e-mail companies. That wasn't Erica Shames's experience. Out of the 250,000 people her message went to, Shames received only ten orders–a less-than-dismal .004% response rate. Since she paid $ 199 for her mailing list, it cost Shames $ 20 for each of the $ 15 subscription orders she received. "It could have cost her a lot more," says Kelly Thompson, founding member of the Forum for Responsible and Ethical E-mail (FREE), a spam prevention advocacy group. "If her ISP had had a policy of not allowing spam from its system, as many ISPs do, she could have lost her e-mail connection and Web site. The $ 500 to $ 1,000 it costs to build a Web site is no small expense for a small business owner."

Myth #3: Bulk E-mail is an Acceptable Way to Advertise
That spam is acceptable is a myth propagated by late-night infomercials, traveling conferences and, yes–commercial e-mail. In a survey of 1,036 Web users by the San Jose, CA-based firm World Research, 43% say they hate spam and 25% say it bothers them. Only 7% claim they "love to get spam." Bigger companies know that bulk e-mail is a good way to trash their reputations, which is why you'll never get an unsolicited ad from IBM or Wal-Mart in your mailbox. "I'd never buy anything from a company that sends me spam," says Craig Maher, an illustrator in Poughkeepsie, NY whose AOL account gets four to five spam e-mails per day. "Most of the spam I get is for porn Web sites or pyramid schemes, so even if a spam is from a legitimate company, the negative association is there."

You may think, "Even if only seven percent of Internet users 'love to get spam,' that's still a lot of potential customers," but take heed: Not only is spam annoying to the vast majority of your target audience–in some cases, it's illegal. "It's now illegal to send spam with forged sending information or a misleading subject line to Washington State residents," says Dan Zerkle, the legislative contact for FREE. (Even bulk e-mail companies know that spam is unacceptable, which is why they almost always falsify sending information so the e-mail can't be traced.) Similar laws in California require senders of bulk e-mail to include a valid e-mail address or toll-free number and specify damages of fifty dollars per message for violation of an ISP's acceptable use policy. A new Nevada law lets residents sue spammers for $ 10 per unsolicited message. Such laws target not only the people who actually hit the SEND button, but also those who "cause the e-mail to be sent"–so you can be looking at a business-destroying criminal lawsuit even if it's a bulk e-mail company that actually sends the message.

The fact that spam shifts the cost of advertising from the sender to the recipient, wreaks havoc on ISPs, and breaks several state laws is enough reason to reconsider using it. But for the small business owner, the most compelling fact is that the majority of Internet users–and your potential customers–loathe spam.

"There are no spamming success stories," says Zerkle. "I've never heard of a legitimate small business that spammed more than once because they find that the bad faith it creates is like a wrecking ball to their company." Asked if she has any advice for small business owners considering adding bulk e-mail to their marketing arsenal, Erica Shames has this to say: "Do not get involved in this at all."

Free Alternatives to Bulk E-mail
Here are three free ways to get the word out about your business–without getting in trouble.

Opt-In E-Mail Lists
Opt-in e-mail lists include only those people who have specifically asked to receive information. You can create your own opt-in list by adding a section to your Web site asking interested visitors to leave their e-mail address. "You won't get into trouble with opt-in mail," says Dan Zerkle. "But you have to set it up so that people who opt in are sent a confirmation e-mail that they have to reply to. This ensures that the people who are on your list really asked to be there, and weren't put there by someone else."

There are also services, such as Postmaster Direct, that will send your ad to a list of people who have opted-in to your category of advertisement.

Banner Exchange Programs
You display a banner on your Web site that brings up an ad from other banner exchange members every time someone visits your site. A banner is a small, banner-shaped ad (hence the name) with graphics and a link to your site. For every two people that visit your Web site, your own banner will appear once on another member's site. Banner exchanges are a popular (and free) way to get the word out–Link Exchange, for example, has more than 250,000 participants. Some banner exchange programs cater to certain types of businesses or demographic markets, and some will design a banner for you gratis.

A signature (or "sig") is like letterhead for your e-mail–a few lines at the end of your message that lists your business name, contact information and even a link to your site. This information automatically appears in every e-mail message you send out, so the visibility potential is great, especially if you participate in online discussion groups. Just be sure not to make the sig too long; four lines is considered the maximum. To find out how to create a signature for your e-mail, consult the manual for your e-mail software or browser.

Copyright 2001 Linda Formichelli & W. Eric Martin, used by permission.

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Linda Formichelli and W. Eric Martin are a writing couple who provide original articles, reprints, copywriting, and Web content to businesses and publications ranging from Woman's Day magazine to Bay State Gas. You can reach Linda and Eric at linda-eric@lserv.com or http://www.twowriters.net.

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