Page 224 - Electronic Commerce

Marketing on the Web

Unsolicited Commercial E-Mail (UCE, Spam)
Spam, also known as unsolicited commercial e-mail (UCE) or bulk mail, is electronic
junk mail and can include solicitations, advertisements, or e-mail chain letters. The origin
of the term spam is generally believed to have come from a song performed by the British
comedy troupe, Monty Python, about Hormel’s canned meat product, SPAM. In the song,
an increasing number of people join in repeating the song’s chorus: “Spam spam spam 199
spam, spam spam spam spam, lovely spam, wonderful spam…” Just as in the song, e-mail
spam is a tiresome repetition of meaningless text that eventually drowns out any other
attempt at communication.
Spam wastes time and storage space on servers and individuals’ computers and it
consumes bandwidth on the Internet. A considerable number of spam messages include
content that can be offensive to recipients. Some employers worry that their employees
might sue them, arguing that the offensive spam they receive while working contributes to
a hostile work environment, which can be grounds for harassment allegations. Industry
analysts estimate that spam costs businesses more than $20 billion per year in the direct
costs of dealing with it and in lost productivity of employees who are subjected to it. You
will learn about the legal issues surrounding spam in Chapter 7, and you will learn about
the technical issues related to spam and some strategies for battling it in Chapter 8.
Sending e-mail messages to Web site visitors who expressly request the e-mail
messages is a completely different story. A key element in any e-mail marketing strategy
is to obtain customers’ approvals before sending them any e-mail that includes a
marketing or promotional message. By obtaining these approvals, as you will learn in the
next section, companies can avoid being accused of engaging in spam.

Permission Marketing
Many businesses are finding that they can maintain an effective dialog with their
customers by using automated e-mail communications. Sending one e-mail message to
a customer can cost less than 1 cent if the company already has the customer’s e-mail
address. Purchasing the e-mail addresses of people who ask to receive specific kinds of
e-mail messages adds between a few cents and a dollar to the cost of each message sent.
Another factor to consider is the conversion rate. The conversion rate of an advertising
method is the percentage of recipients who respond to an ad or promotion. Conversion
rates on requested e-mail messages range from 10 percent to more than 30 percent.
These are much higher than the click-through rates on banner ads, which are currently
under one-half of one percent and decreasing.
The practice of sending e-mail messages to people who request information on a
particular topic or about a specific product is called opt-in e-mail and is part of a marketing
strategy called permission marketing. Most marketing efforts that traditional businesses use
to promote their products or services depend on potential customers having enough time to
listen to sales pitches and pay attention to the best ones. As time becomes more precious to
everyone, people no longer wish to hear and evaluate advertising and promotional appeals
for products and services in which they have no interest. ConstantContact and Yesmail are
two companies that offer permission-based e-mail and related services.
Thus, a marketing strategy that sends specific information only to people who have
indicated an interest in receiving information about the product or service being promoted

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