The Death Of E-Mail Marketing?

Straight Talk - An Open Letter To You

The Death Of E-Mail Marketing?

by John Glube, © 2003, all rights reserved of
Head's Up - A Copywriter's Journal

What? The killer marketing application, e-mail being declared dead. Well, recently there has been lots of talk online in this vein.

To paraphrase Shakespeare, "I think some protest too much."

It is true the marketing environment has changed. ISP filters have altered the way many publishers now deliver their e-zines.

Reverse marketing strategies through the use of FFA and Classified Ad boards are under attack.

Consumers are upset about the volume of "junk e-mail" and "unsolicited commercial e-mail."

Internet service providers are concerned about the increased strain on infrastructure due to the ever increasing volume of unsolicited commercial e-mail.

Spammers are becoming ever more aggressive in their tactics, consumer complaints have skyrocketed and politicians are being called upon to act.

In the European Union, due to a directive on the issue having been proclaimed over a year ago and coming into force on October 31, 2003, the various member states are now passing laws in an attempt to deal with the problem of unsolicited commercial e-mail. The United Kingdom recently introduced regulations [1] concerning UCE which come into force on December 11, 2003.

A majority of American states have also passed legislation to address the problem.

And the Federal Government of Australia after wide public consultation recently tabled legislation to deal with the problem.[2] At the time of writing, the bill has passed the House of Representatives and is before the Senate.

But, of greatest import was the signing into law by the former Governor of California earlier this fall of an act dealing with "Unsolicited Commercial E-Mail Advertising" which has been heralded by some as the toughest anti-spam legislation on the books.[3]

(This Act actually amends certain provisions of the California Business and Professions Code, by adding a new article to regulate unsolicited commercial e-mail and repealing an existing article dealing with privacy.)

If the amount of online chatter has any bearing, certainly this new law has caused some concern.

Why? California is one of the core hubs within the Internet community. Some have estimated as much as 20% of the world’s server capacity is located within California.

The new law regulates those who send what the law defines as an "unsolicited commercial email advertisement" within, from and to California and those who use this medium for advertising.

It allows the Courts to impose penal awards of up to $1,000 for each offending e-mail and a total of $1,000,000 US per incident in addition to actual damages and reasonable attorney's fees. And the new law allows individuals to invoke the Court’s aid in imposing the penal sanctions.

(See section 17529.2[4])

What does all this mean? Does it mean, as some have suggested, the death of e-mail marketing?

In my view, the short answer is no. But, this law does pose some challenges for online marketers who believe in permission based e-marketing.

Let's take a look at this law and see if we can make heads or tails of its meaning, while developing some meaningful solutions.

Just before you and I go any further, one word of caution.

Although I have a law degree, I am not a lawyer, but rather a writer, copywriter and publisher. The comments made in this article are for your information. If you have any questions, you should contact competent legal counsel.

Why this law?

According to the findings made in the legislation, the vast majority of Californians don't like spam.

Some suggest the former Governor, in the midst of a hotly contested recall vote, by signing the law, was trying to curry favor with a certain segment of the California population. Apparently, it was believed more voters were upset with spam then were concerned about the impact this legislation would have on e-commerce within California.

What ever the reasoning, it is important to review the new law with care. The requirement of obtaining prior consent or showing a prior existing business relationship is the approach being used in the European Union and the intended approach in Australia.

When does the law come into force?

According to my understanding, from communications with State of California officials, this legislation comes into force on January 1, 2004.

Will the law be pre-empted by Federal legislation?

In the United States, the Federal Government regulates interstate commerce. In the absence of Federal legislation regulating unsolicited commercial e-mail advertisements, the States can pass legislation, as long as the law is reasonably necessary. There are a number of bills before Congress regulating unsolicited commercial e-mail advertisements. It is hard to know whether Congress will pass any applicable legislation in this session.[5]

(To gain insight into the ultimate form of Federal legislation, it is useful to review comments made by the United States Federal Trade Commission, the Federal civil agency dealing with the spam problem.[6])

Will the law withstand a Court challenge?

The law is potentially vulnerable on a number of fronts. However, mounting a Court challenge takes time and it is unlikely the Courts will be able to hear a challenge before January 1, 2004.

What does the law state?

You can find a copy of the legislation here

Whom does the law regulate?

The law regulates those who send and those who advertise using what the law defines as "unsolicited commercial email advertisements" from within, from or to California.

(See generally the new legislation.)

What does the law try and do?

The legislature is attempting to address the problem of what it defines as "unsolicited commercial email advertisements" sent within, from, or to California (California spam or CS).

The legislation prohibits:

* People sending or advertising in CS;

(See section 17529.2)

* The collection of email addresses and the setting up of email accounts to be used in sending CS;

(See section 17529.4 [7])

* Using third party domain names without consent in CS;

(See sub-section 17529.5 (a)[8])

* Using forged headers in CS; and,

(See sub-section 17529.5 (b)[9])

* Using deceptive headlines in CS.

(See sub-section 17529.5 (c)[10])

The legislation grants a private right of action to recipients of CS to bring an action for damages and invoke the penal awards of the Statute.

(See section 17529.8[11])

It also allows service providers to prevent the improper use of their services and grants service providers with a private right of action.

(See generally section 17538.45)

What is California spam?

The cliché, the devil is in the details, is quite appropriate.

In essence, if you have "direct consent" or a "preexisting or current business relationship" with the recipient of your "commercial e-mail advertisement" you are ok.

But, don’t get too excited. The legislature has given very specific meanings to the phrases "direct consent," "preexisting or current business relationship" and "commercial e-mail advertisement."

(As an aside, remember, you and I are speaking about a "commercial e-mail advertisement" sent within, from, or to California.)

What is meant by "direct consent?"

The law defines "direct consent:"

"Direct consent" means that the recipient has expressly consented to receive e-mail advertisements from the advertiser, either in response to a clear and conspicuous request for the consent or at the recipient's own initiative.

(paragraph 17529.1 (c))

This definition uses two defined terms, "advertiser" and "e-mail." The important definition is "advertiser:"

"Advertiser" means a person or entity that advertises through the use of commercial e-mail advertisements.

(paragraph 17529.1 (a))

And, of course, this definition uses another defined term, "commercial e-mail advertisement:"

"Commercial e-mail advertisement" means any electronic mail message initiated for the purpose of advertising or promoting the lease, sale, rental, gift offer, or other disposition of any property, goods, services, or extension of credit.

(paragraph 17529.1 (c))

How does this bear upon your marketing activities to your mailing list?

Now, you may be saying, if someone signs up to my mailing list, don’t I have "direct consent?"

Maybe.

It depends upon what people understand when subscribing to your mailing list, e-zine, or contact list.

If you merely state:

"Sign up here to receive John’s ‘free’ e-zine:"

Is this sufficient, so that people understand when signing up for John’s ‘free’ e-zine, as a subscriber you will be receiving advertisements.

Even, if this understanding is correct, the problem is the requirement for "direct consent."

The definition of "direct consent" requires your subscriber to expressly consent to receiving commercial e-mail advertisements from a specific advertiser.

So, when someone signs up for your e-zine, even if this person is consenting to receive commercial advertisements from you, here are three potential issues:

* You market a variety of third party products. You run promotions for these products in your e-zine. Has your subscriber given direct consent to you to advertise third party products?

* You enter into a joint venture. You run a promotion for the joint venture product in your e-zine. Has your subscriber given direct consent to you to promote the joint venture product?

The definition of advertiser does not require the advertiser market his, her or its own products through commercial e-mail advertisements. In my view, on these two issues you are ok.

* You run ad swaps with third parties in your e-zine, sell advertising space in your e-zine to third parties, run third party articles containing resource boxes and run solo advertisements.

You could argue an e-zine is not a commercial e-mail advertisement. You might say the purpose of the law is to regulate the sending of an e-mail message containing an advertisement and not an e-mail message which contains informative articles, along with advertising, or directs the reader to a web page containing the published e-zine.

However, it is worth looking again at the broad language used in the definition of "commercial e-mail advertisement:"

What is your purpose in running a mailing list? You are running an e-zine to market goods, products or services. True, you provide informative articles to your subscribers in your e-zine. But when you send out your e-zine or even a simple notice of your e-zine being posted on your web site, your purpose is to advertise or promote:

"the lease, sale, rental, gift offer, or other disposition of any property, goods, services, or extension of credit"

Either:

* Directly by running an ad for one of the products you market, by making a product recommendation, or providing a product review, or

* Indirectly through the sale of advertising space, by running ad swaps, or by running third party articles with resource boxes.

For these reasons, given the broad definition of "commercial e-mail advertisement," if the purpose of your e-zine is to market goods, products, or services, when you run ad swaps with third parties, sell advertising space to third parties, or run third party articles containing resource boxes, your e-zine falls within the meaning of a "commercial e-mail advertisement."

And clearly, sending out a solo ad is a "commercial advertisement" which requires "direct consent."

Subject to developing another approach, you will need "direct consent" as defined, or be able to establish a "preexisting or current business relationship" to carry out these sorts of marketing activities to your mailing list.

What about marketing to rented e-mail marketing lists?

If you rent access to an e-mail mailing list to run your own solo ad, or run an advertisement in the top sponsor ad position in a "free" auto-responder service, for example, do you require "direct consent?"

The answer is yes, based on the definition of "direct consent."

As an aside, each of my answers to the preceding three points needs to be qualified. At best, without a binding decision by the California courts, you are left with having to consult with competent counsel and seeking an opinion on the application of the statute to your specific situation.

Are there any possible solutions?

* Let’s look at the "free" e-zine model.

You have a mailing list. You publish your e-zine on a regular basis. You market products yourself and also sell advertising space for classified ads, sponsor ads and solo ads. You publish third party articles containing resource boxes and you run ad swaps.

One potential approach is to make it clear when a person subscribes, in subscribing he or she is giving express consent to receive commercial e-mail advertisements from you and from other advertisers who may buy advertising space in your e-zine in the form of sponsor ads, classified ads, solo ads, ad swaps and resource boxes contained in articles written by other authors.

How can you do this? The best way is to include appropriate language in your web sites terms and conditions and require a subscriber to acknowledge having read and agreed to these terms and conditions upon subscribing.

However, you are not out of the woods yet. Why? Because of how the phrase "direct consent" is defined. It is worth reading the definition again:

"Direct consent means that the recipient has expressly consented to receive e-mail advertisements from the advertiser, either in response to a clear and conspicuous request for the consent or at the recipient's own initiative."

(paragraph 17529.1 (c))

This definition requires your subscriber to expressly consent to receiving commercial e-mail advertisements from a specific advertiser, meaning a blanket consent is not sufficient.

Though a blanket consent will protect you as the publisher, to properly run paid third party solo advertising, you will have to either:

* Step into the shoes of the advertiser, by becoming the advertiser's agent and placing the appropriate statement and disclaimer on the bottom of the ad; or,

* Send out a teaser ad, being notice of the solo ad, with a link to the solo ad, along with the appropriate disclaimer, using contests or other forms of inducements to get your subscribers to read the solo ad.

Now, the law does contain another exception, called the "preexisting or current business relationship."

The law defines "preexisting or current business relationship:"

"Preexisting or current business relationship," as used in connection with the sending of a commercial e-mail advertisement, means that the recipient has made an inquiry and has provided his or her e-mail address, or has made an application, purchase, or transaction, with or without consideration, regarding products or services offered by the advertiser.

Commercial e-mail advertisements sent pursuant to the exemption provided for a preexisting or current business relationship shall provide the recipient of the commercial e-mail advertisement with the ability to "opt-out" from receiving further commercial e-mail advertisements by calling a toll-free telephone number or by sending an "unsubscribe" e-mail to the advertiser offering the products or services in the commercial e-mail advertisement. This opt-out provision does not apply to recipients who are receiving free e-mail service with regard to commercial e-mail advertisements sent by the provider of the e-mail service.

(paragraph 1729.1 (l))

To show a "preexisting or current business relationship" either you can show:

The person has made an inquiry regarding products or services offered by the advertiser and has provided his or her e-mail address; or,

The person has made an application, purchase, or transaction, with or without consideration, regarding products or services offered by the advertiser.

Based on this exemption, a better way to resolve the problem is to adjust your subscription form, by having people apply to receive your "free" e-zine. You can then make it clear on the application form what the person will be receiving. You could tie this into a double opt-in process, so that when the person confirms his or her subscription, the person is also confirming the request to receive the specified services.

(As an aside, the Working Group on Electronic Contracting Parties, comprised of members of the Electronic-Commerce Subcommittee and the Cyberspace Law Committee of the Business Law Section of the American Bar Association has published a short note in PDF called "Click Through Agreements, Strategies for Avoiding Disputes on Validity of Assent," which you may wish to read, if you are interested in pursuing this solution.)

One difficult with relying upon the "preexisting or current business relationship exemption" is the statutory requirement of maintaining a 1-800 number or providing an "unsubscribe" e-mail address for "opt-outs."

If you use an auto responder/list management service, the script will automatically put an unsubscribe link in your message. Strictly speaking this is not in compliance with the legal opt out requirements as set out above. To avoid any issues, given the potentially severe penalties for non-compliance, you will want to ensure your messages meet the statutory "opt-out" requirements.

I appreciate neither solution is inviting. Why? The concern is people are less likely to subscribe to your mailing list if you tell the potential subscriber up front, in essence, subscribe to my e-zine and agree to receive advertising both from myself and from others.

However, since people understand the value of e-zine advertising, you can overcome this issue. How? By properly framing the benefit of being a subscriber and ensuring you run quality advertising in your e-zine.

Another possible solution is to take the position an e-zine is not a "commercial e-mail advertisement" as defined.

Personally, I do not recommend this approach, without obtaining a valid legal opinion. Even then, as the law creates an absolute liability offense, the obtaining of a legal opinion will merely go to mitigating the penalty. Ah, such fun and games.

Besides, what about solo advertisements? Clearly this is a "commercial e-mail advertisement."

Well, you could run the solo advertisement for the advertiser under your name and this may skate around the problem.

I write skate around the problem because the advertisement will refer the subscriber to a third party site and this is where you end up getting stuck.

Also, by taking this approach, your subscribers may presume you are endorsing the product, good or service, as opposed to merely running a paid advertisement. Of course, if you accept the view publishers bear a responsibility to vet the advertising submitted by their advertisers, this may not be a bad thing.

* Converting your "free" e-zine to a personal journal in which you recommend products and services and endorse other people’s products to your mailing list, but you do not run third party advertisements.

This model has been very successful for a number of people. By establishing a personal relationship with your subscribers, you break down the buyer’s resistance and turn yourself into a trusted resource for your subscribers.

(As an aside for more information on how to run your e-zine based on this approach, you may wish to look at subscribing to the "Hypnotic Blueprint" offered by Frank Garon and Lee Benson. Frank Garon has been very successful in using this approach, obtaining unheard of per subscriber revenues. Frank teaches this approach as part of the training material in the "Hypnotic Blueprint."[12])

* Converting your "free" e-zine to a paid model

Instead of giving away "stuff" to attract subscribers, you convert your "free" e-zine to a paid model and as part of the transaction, set out in the terms and conditions by subscribing the person is consenting to receive third party advertisements and so forth.

I can here some of you laughing. Well, don’t kid yourself. As the online marketing environment continues to change, publishers are looking for solutions. Clearly, if a subscriber pays to receive your product, this will dramatically reduce the likelihood of a California spam complaint.

* Moving away from sending out your e-zine via e-mail, setting up a "blog," converting your mailing list to an announcement list and distribute your product using services like "newsmon"[13]) and "real simple syndication."[14])

In my view, if you want to continue with the "free" e-zine model and run third party advertisements, in the near term, you are going to want to look at converting to this model.

Why? It avoids many of the problems which presently plague e-mail marketing from ISP filters to draconian anti-spam laws.

Also, you have the flexibility of selling advertising space in each issue of your e-zine as it is posted online, or taking advantage of Google’s Adsense advertising program.[15]

(As an aside, for those who are interested in this approach, Site Build It now includes a blogging module and comes highly recommended as the business solution for the small business entrepreneur.[16])

The real problem with this law ...

In essence, requiring consent, or proof of an existing business relationship simply makes good sense in managing your mailing list.

True the law is awkwardly worded. And as written, it will have unforeseen consequences.

For, example:

* Cold calling on people with "California e-mail addresses" by sending e-mails proposing joint ventures for your product or service without prior consent or an existing business relationship may, depending on how you word the e-mail message, constitute a violation of the law.

(Of course, it is only good business sense to call someone first and discuss the possibility of doing a joint venture rather than sending an e-mail out of the blue.)

* It may prevent people from running ad swaps to aid in growing their mailing lists, or renting true opt-in targeted mailing lists, even through the use of safe-lists.

But of underlying concern is the ability of individuals to press claims for damages using a penal statute and invoke claims for significant penal damage awards.

The law creates an absolute liability offense. What do I mean?

If you send out an "unsolicited commercial e-mail advertisement" or advertise in an "unsolicited commercial e-mail advertisement" as this term is defined, you are liable to significant penalties.

To make out the claim, an individual must show he or she is the holder of a "California e-mail address," he or she received a "commercial e-mail advertisement" through a "California e-mail address" and did not give "direct consent" to the advertiser and does not have a "preexisting or current business relationship" with the advertiser.

(For ease of reference, I have put quotation marks around the defined terms.)

How will you prove a claim?

It is simple. Prove you are holder of the "California e-mail address" which received the "commercial e-mail advertisement" and state, I did not give "direct consent" and I do not have a "preexisting or current business relationship."

(As an aside, a Court might decide based on the statutory wording, the onus is higher and a bald statement of I did not give "direct consent" and I do not have a "preexisting or current business relationship" is not sufficient. Rather the claimant has to bring before the Court the advertiser’s records and establish from these records the lack of "direct consent" and the non existence of a "preexisting or current business relationship." However, this gets into proving a negative, so, I feel this is not likely.)

The "advertiser" then has the onus of proving either "direct consent" or a "preexisting or current business relationship," through production of the relevant business records in accordance with the established evidentiary procedures under California law.

The law does not allow the advertiser to establish a defense of due diligence.

It is not a defense to say, "I honestly believed I was acting within the requirements of the law, after making reasonable inquiries and exercising due diligence," although this may go to mitigate the penalties the court can impose. How lovely.

This exposes honest marketers to all kinds of potential problems. Three examples:

* False claims. You sent me a commercial e-mail advertisement without my consent and we did not have a preexisting or current business relationship. I am going to take you to Court and seek a $1,000 in damages. But, if you pay me $250.00 now, you can make the problem go away.

* Competitors setting you up. You have a mailing list. A competitor wants to destroy your business. Anyone sophisticated with playing games can figure out ways to manipulate the situation.

* Liability for actions of your affiliates. You run an affiliate program. An affiliate rents a mailing list and sends out a solo ad promoting your product. A number of people on the mailing list have "California e-mail addresses" as defined. People complain to the State Attorney-General who decides to make an example out of you. Since the affiliate is acting as your agent in marketing your products, arguably you can be considered the advertiser and so found liable.

Perhaps of greatest concern for most of us is the problem of false claims, were the claimant can seek a significant damage award for each incident.

One of the best protections a citizen has is an independent police force trained to impartially investigate crimes and independent career civil servant public prosecutors who prosecute the charges as presented by the police, being mindful of the duty to ensure justice is both done and seen to be done.

By allowing individuals to invoke the aid of the legal system without appropriate checks and balances, you unleash revenge and greed, which can be true recipes for disaster.

Don’t get me wrong. It is not unusual for the state, when regulating behavior to also create a private statutory right of action. And this can in the appropriate circumstances be a legitimate exercise of state authority which can benefit the individual.

However, by giving carte blanche, while taking away the normal probative requirements in a statutory tort action and establishing a regime of penal awards, opens up the real possibility of the legislative remedy being abused.

How to protect yourself, while running a mailing list?

* Keep accurate records. You will want the records to include the Internet Provider address of the subscriber, along with the date and time of subscribing.

It may be wise to use a third party auto-responder/list management service, as opposed to hosting your own auto responder/list management on your web site.

Why? A good third party service will have to maintain accurate records to protect its own interests along with yours. This includes adequate data security, through the use of off site storage facilities and the like, to allow for disaster recovery.

(As an aside, one third party service which I can recommend for this purpose is Ultimate Marketers Resource.[17])

* In managing your business, you want to create an opt-in process which can provide verification of the required consent and allow you to quickly deal with the risk of false claims.

* Also, use a service which deletes the subscriber’s information from your list management system, so people truly do opt out, while maintaining file records in case there are future problems.

What to do if you receive a claim?

* Make a note of the time, date and general contents of the "claim."

If you can prove "direct consent" or a "preexisting or current business relationship," my suggestion is to:

* Send an e-mail to the person, politely pointing out your proof and requesting the person withdraw the claim; and,

* If the person persists, after consulting with your lawyer, contact the California state police, provide your "proof" and request an investigation.

As to the individual, subject to the guidance of your lawyer as to how to respond further, you can simply write back and tell the individual you have turned the matter over to authorities and decline any further contact.

Should you express your views on proposed Federal legislation?

Barring a Court challenge, or a radical change in California politics, (which may have happened with the recall of Governor Davis and the election of Governor Schwarzenegger), the new California law is a done deal. However, it is likely to be replaced with Federal legislation at some time in the future.

Where a number of stake holders are involved, Politicians by the very nature of the beast do listen to their constituents.

For example, in the California law, one of the more interesting aspects is the bulk mail exemption created for providers of free e-mail addresses like Hotmail and Yahoo. Some have dubbed this the Microsoft exemption.

This particular exemption allows providers of free email boxes to send "commercial advertisements" without the requirement of a "preexisting or current business relationship." This of course gives providers of free e-mail boxes a statutory monopoly on this form of advertising.

(See paragraph 17529.1 (l)[18]). I add if this exemption holds and flows through in Federal legislation which adopts an opt-in model, it is one way for e-zine publishers to avoid many of the issues surrounding the new California law.)

For those who are interested in how the legislative process works, watching the influence of the Direct Marketers Association and other groups in shaping the proposed Federal legislation on spam is fascinating.

(One group you will want to consider joining which can allow your voice to be heard on these and other issues is an organization known as the International Coalition of Online Professionals or I-cop.[19])

Yet, Legislative aides for Congressman and Senators do read the mail. So, why not have a bit of fun, put pen to paper and write a letter? Express yourself, even if you live outside of the United States. And apparently, an actual letter counts for far more than an e-mail message.

A glimpse into the future

At present, the thrust of the draft legislation before Congress is to regulate spam by requiring a valid method allowing people to opt-out, while allowing regulators to pursue advertisers in a limited fashion.

In responding to the issue of UCE, it is important to remember there are two types of e-mail to gripe about, what is commonly called junk mail and spam.

Unfortunately, the distinction between the two is becoming blurred and this is part of the problem with the various legislative remedies.

* Junk mail is unwanted commercial e-mail, being any commercial e-mail you requested, but no longer wish to receive, as a result of signing up for a "free service;" and,

* Spam or unsolicited commercial e-mail is any commercial e-mail message, usually in bulk, sent without your prior request or consent.

(The second part of the definition comes from the approved comments of Commissioner Thompson in testimony before the Senate Committee on Commerce, Science and Transportation on May 21, 2003[20])

In fashioning any legislative remedy, it is important to remember there are a number of forces at play:

* Junk mail and spam which as noted above are different animals.

* Consumers who are frustrated in dealing with the volume of unwanted commercial e-mail messages being either junk mail or spam.

* Anti-spam advocates or zealots depending on your perspective.

* Advertisers, online e-zine publishers, bulk mailers and other online service providers both big and small who provide channels of distribution for advertisers. Some of the service providers are advocating solutions which would create service monopolies (although understandable from a business perspective, will not be in the best interests of the Internet community in the long run.)

* Internet Service Providers and Portal Providers who are dealing with the infrastructure cost due to the dramatic increase in the use of bulk mail, either solicited (permission based opt in e-mail marketing of one form or another), or unsolicited.

All of these groups (or stake holders) have differing interests.

Some make the point that as the online marketing community was originally a hot bed of spammers (I am now speaking of marketing practices carried out between 1994 and 1997) a plague on your house.

Others indicate the need for a technical solution. It is now pointed out that the online marketing community is by and large opposed to the use of unsolicited commercial email and in continuing to castigate, this serves no purpose and will end up hurting the honest business person.

In my view a legal framework is ultimately necessary for dealing with those who don't give two hoots.

But, creating this framework without a technical solution and based on biases of the past, which are no longer valid, can only end up hurting the honest small business person who simply wants to build a "good" business.

In the end, given the stance taken by the European Union and other nations, including Australia, in choosing the opt in model, it will be interesting to see how Congress balances the various competing interests, while fashioning a solution.

The United States has been the engine of growth in the transition from a paper based economy to a digital economy. Dealing properly with the issue of spam is of great import for the future growth of the online community.

Congress has an opportunity to protect the continued economic leadership of the United States.[21] But, if Congress goes with a model which is overly generous to one group's interests, by default, this may make the legislative solution redundant and result in a shift in the center of influence, as online marketers either find themselves turning to marketers in the European Union and Australia for guidance, or as advertisers relying upon those who simply don't care.

Threading the eye of the needle

What does a camel have to do with spam? Perception.

You have a mailing list. A person is told upon subscribing to your e-zine, you will be sending out solo ads.

Yet, when a solo ad is sent out, some people yell spam.

You run a private site. You do not charge a fee for access. Rather, a person must agree to be placed on your mailing list and receive commercial e-mail advertisements from you promoting products and services you market.

You send out a glossy html e-mail advertising message to your list and because you have "direct consent," you don't include a simple opt out mechanism, but rather require people to confirm the request by going to your site and canceling their membership as well.

Some of your members/subscribers complain and yell spam.

The law in regulating behavior uses objective standards to make assessments. Otherwise, we run the risk of justice being "as long as the chancellor's foot."

But our customers, in judging marketing behavior impose subjective standards.

How would you feel if you could not easily remove yourself from a mailing list and stop receiving e-mail messages which you perceive are simply cluttering up your e-mail box?

Remember, even if the customer is wrong, the customer is right. As the clamor for action on junk mail and spam increases, the risk is politicians may seize the opportunity to "do something." And in acting to send a message, as opposed to passing a reasoned legislative response, "the cure may be worse than the disease."

The result?

Small businesses being burdened with substantially increased administrative costs in carrying out their e-marketing activities, stifling the creative engine of economic growth.

The small e-business marketing community in wearing the laudable mantle of being a creator of economic growth bears a responsibility.

In carrying out our marketing efforts, it is essential to meet the perceived needs of our subscribers by delivering a quality product in the proper fashion.

Be up front in telling people the product or service people will receive in subscribing to your mailing list. In carrying out your marketing efforts, listen and remember to apply pre-selling concepts, while working to break down your customer's natural resistance against buying as you create a bond of trust.

Provide useful information. Move away from simply sending out essentially commercial e-mail advertisements. Were appropriate segregate your lists and allow people to easily opt out.

Why? Because if we do not deliver a quality product meeting the perceived needs of our list, our customers will feel we are simply abusing the relationship.

This will result in greater hostility and at day's end, significantly increase the risk of truly draconian regulatory demands being imposed in attempting to control what is perceived as an avalanche of unwanted e-mail.

The end game? Exposing the small business e-marketing community to even greater burdens and to quote from Grimms Fairy Tales "kill the goose which laid the golden egg."[22]

Additional resources and End Notes

[1]back The UK recently passed regulations dealing with unsolicited commercial e-mail. These regulations come into force on December 11, 2003.

UK Regulations Prohibiting Unsolicited Commercial E-mail

The relevant sections of the regulations are sections 22 and 23.

You will also want to read sub-section 43.4 (c) of The British Code of Advertising, Sales Promotion and Direct Marketing. This is commonly called The CAP Code. The CAP Code is administered by the UK Advertising Standards Authority.

This sub-section reads:

"43.4 The explicit consent of consumers is required before:

...

c) marketing by e-mail or SMS text transmission, save that marketers may market their similar products to their existing customers without explicit consent so long as an opportunity to object to further such marketing is given on each occasion."

There are two recent adjudications by the UK Advertising Standards Authority concerning sub-section 43.4 (c) of The CAP Code.

The first adjudication concerns e-mail marketing carried out by an entity known as The Training Guild. The decision was rendered on September 10, 2003.

The Guild purchased a targeted opt-in e-mail marketing list and sent its e-mail message to this list. One of the individuals on the list complained. The complaint dealt with two parts. Whether the subject line was in breach of the relevant code provision and whether in mailing to the list the Guild had violated the code provision concerning explicit consent.

The ASA ruled the subject line was in compliance. However, the second complaint was upheld. Even though the Guild exercised due diligence, explicit consent was required from those on the list before sending out its marketing message by e-mail and the Guild was advised to obtain explicit consent in the future.

In coming to this conclusion, the ASA stated:

"The Authority acknowledged that the advertisers had bought a list of e-mail addresses of people who had opted to receive information about business development topics by e-mail in good faith. The Authority nevertheless considered that it was the advertisers' responsibility to ensure that recipients on the list had given their explicit consent to receive such e-mails. The Authority considered that the advertisers had not got explicit consent to send the e-mail to the complainant."

The second adjudication concerns two complaints concerning text messaging sent by The Carphone Warehouse Ltd. This adjudication was rendered on October 22, 2003.

The first complaint concerned the content of the message and whether it was misleading. The text message stated:

"For fantastic free handsets, inc up to 6 months free line rental or a free dvd player, call Carphone Warehouse on ... t&c's [sic] apply ...".

The ASA upheld this complaint because the text message did not make it clear recipients would have to take out a new mobile phone contract to claim the "free DVD player."

The second complaint resolved around the issue of consent. This complaint was also upheld.

An external list provider had sent out the messages on behalf of Carphone Warehouse. The list provider compiled the list from information gathered while conducting a shoppers’ survey, with participants being asked to give permission for their contact information to be used by third parties for marketing purposes. The survey offered respondents the opportunity to opt out of receiving marketing communications from third parties.

The ASA held even though the survey offered respondents the chance to opt out of receiving marketing communications from third parties, the Code required marketers to have the explicit consent of consumers before sending them a promotional text message. The promoters were advised to ensure future commercial text messages sent on their behalf were sent only to consumers who had given explicit consent to receive text messages.

You can find a copy of these adjudications on the ASA Web Site

Sub-section 43.4 (c) of The CAP Code expresses in succinct terms the concepts of "consent" as found in the UK regulations and "affirmative consent" in the Can Spam Act as recently passed by the Senate.[21a]

The point? When purchasing e-mail marketing leads, it is not sufficient that people have "opted-in" or agreed to receive "direct marketing" or "commercial e-mail messages" from third parties. You want to make sure the people you are going to market too have expressly consented to receiving your message. If not, you have to ask for express consent before sending out your "direct marketing email message" under the EU rules, or your "commercial e-mail message" under the Can Spam Bill, otherwise you will be sending out UCE.

However, you should only consider the ASA adjudications as a guide to best practices. To fully understand the United Kingdom rules read:

* The Privacy and Electronic Communications (EC Directive) Regulations 2003;

* the materials found on a Resource Site established by the Department Of Trade And Information; and,

* the Information Commissioner's Guidance to the Privacy and Electronic Communications (EC Directive) Regulations 2003.

(All references are to the relevant UK regulations or regulatory authorities.)

[2]back The Federal Government of Australia has recently introduced a piece of legislation called Spam Bill 2003 to the Federal House of Representatives:

Spam Bill 2003

Along with the proposed legislation, the Australian Government has published an explanatory memorandum, setting out the reasons why the Government decided to proceed with legislation, which makes for an interesting read:

The Explanatory Memorandum For Spam Bill 2003

With Spam Bill 2003, the Government of Australia has also introduced a piece of legislation called the Spam (Consequential Amendments) Bill 2003:

Spam (Consequential Amendments) Bill 2003

And the Australian Government has published an explanatory memorandum for the Spam (Consequential Amendments) Bill 2003 to aid you in understanding why the need for these amendments to existing legislation.

Explanatory Memorandum For Spam (Consequential Amendments) Bill 2003

(As an aside, the Australian Direct Marketers Association supports this new legislation. For those who watch this stuff, the position of the Australian Direct Marketers Association in supporting the 'opt-in' model is directly opposite to the position of the American Direct Marketers Association, which supports the 'opt-out' model.)

In essence, the United Kingdom based on an earlier European Union directive and Australia after reviewing the competing approaches have moved in the direction of banning unsolicited commercial e-mail.

(I note the UK regulations based on the CAP code only ban unsolicited commercial e-mail sent to an individual’s e-mail address, but not to an e-mail address of a non-living entity. Some have suggested this means corporations will see a dramatic increase in spam. This remains to be seen.)

[3]back On September 23, California's Governor signed California's Anti-Spam Law

[4]back"17529.2. Notwithstanding any other provision of law, a person or entity may not do any of the following:

(a) Initiate or advertise in an unsolicited commercial e-mail advertisement from California or advertise in an unsolicited commercial e-mail advertisement sent from California.

(b) Initiate or advertise in an unsolicited commercial e-mail advertisement to a California electronic mail address, or advertise in an unsolicited commercial e-mail advertisement sent to a California electronic mail address.

(c) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect any other provision or application that can be given effect without the invalid provision or application."

[5]back On October 22, 2003, the Senate passed what is commonly called the Can Spam Act (the Can Spam Bill).[21a]

There were different positions circulating in the House and until very recently no compromise had been reached.

The competing positions reflected in part the differing views of the various trade associations and the representations made to Congress by the FTC.

In essence, one position favored the EU model. The other position favored the approach advocated by the American Direct Marketers Association.

The "minimalist approach" of the Direct Marketers Association is reflected in its white paper called The DMA's Guide For Tackling Spam.

This approach was followed in a press release issued by the American Association of Advertising Agencies, the Association of National Advertisers, and the (American) Direct Marketing Association on October 14, 2003, setting out what are called the "Nine Guidelines of Legitimate E-mail Marketing".

The problem with these guidelines is the 6th statement:

"Marketers should not acquire e-mail addresses surreptitiously through automated mechanisms (such as robots or spiders) without the consumer/customer’s informed consent. This includes a prohibition on dictionary attacks or other mechanisms for fabricating e-mail addresses without providing notice and choice to the consumer."

In response, on October 22, 2003 a separate trade group called the E-mail Service Provider Coalition issued a press release calling for adoption of the E-mail Marketing Pledge. This pledge reflects existing permission based e-mail marketing practices and calls for an outright ban of unsolicited commercial e-mail.

In the testimony of Howard Beales III, Director of the FTC's Bureau of Consumer Protection given on July 9, 2003 before the House Energy and Commerce Committee's Subcommittees on Commerce, Trade and Consumer Protection and Telecommunications and the Internet, the FTC clearly favored a tougher stance than the minimalist approach advocated by the DMA.

Except for section 109, dealing with the proposed "Do Not E-Mail Registry," the Can Spam Bill as passed by the Senate is close to the FTC's position. The testimony of Mr. Beales is outlined in the FTC's July 9, 2003 press release titled No Simple Solution to The Spam Problem, FTC Tells Congress.

Will the log jam in Congress be broken before year’s end?

There was press speculation the House Speaker might force the House of Representatives to have an anti-spam vote in early November.

This did not happen.

But, on Friday, November 21, 2003, in a formal press release, House Energy and Commerce Committee Chairman Billy Tauzin announced:

"For the first time during the Internet-era, American consumers will have the ability to say no to SPAM. What´s more, parents will be able to breath easier knowing that they have the ability to prevent pornographic SPAM from reaching defenseless, unsuspecting children," said Chairman Tauzin. "Although the Internet has given us abilities beyond our wildest dreams, it has also produced endless headaches with all of the crippling congestion SPAM causes to computers every day throughout this country. Today´s agreement could end all of that nonsense and bring peace of mind back to everyone who sends and receives e-mail."

Specifically, the anti-SPAM agreement:

* Empowers American consumers with the right to opt-out of all unwanted and unsolicited commercial e-mail or SPAM.

* Provides the FTC with the authority to set up a "Do-Not-SPAM" registry based on Chairman Tauzin´s work on the "Do-Not-Call" registry for unwanted and unsolicited telemarketing telephone calls.

* Grants the strongest available protection for parents and consumers to say "no" to the receipt of pornographic SPAM.

* Makes it a crime, subject to five years in prison, to send fraudulent SPAM.

* Allows the FTC and state attorneys general the ability to vigorously enforce the laws contained in the anti-SPAM legislation.

* Enforces statutory damages of $2 million for violations, tripled to $6 million for intentional violations, and unlimited damages for fraud and abuse.

To read a full copy of the press release Use This.

You may be asking, why did Congressional leaders decide to go with strengthened "opt-out" legislation as opposed to the path chosen by the European Union? One reason:

* Because from recent surveys it appears the American consumer continues to rely most heavily on the delete button and the strongest desire is for a secure way to opt out from receiving unwanted e-mail. To gain more insight on this point you will want to read the summarized results of the Spam Survey conducted by Bigfoot Interactive in April, 2003 and the detailed report titled "Spam - How it is hurting email and degrading life on the Internet," [22] published on October 22, 2003 by the Pew Internet & American Life Project.

Further to this agreement, the House voted on and passed an amended CAN Spam Act of 2003 on November 22, 2003

To read an engrossed copy of the amendments as agreed to by the House Use This .

The House then sent its amendments to the Senate. In reviewing the House amendments, it was observed there were some technical errors.

These technical errors were discussed between the Senate and the House. On November 25, 2003, the Senate amended the House amendments. To review these amendments Use This.

The Senate then sent the Bill, with the amendments, back to the House. Representatives will return to Congress on December 8, 2003, after the Thanksgiving Holiday Weekend break. The House will likely pass the Senate amendments and then send the final version of the Bill on to the President for signing. Again, from press comments, it is understood the President will sign the Bill into law.

You will want to use the "Senate amendments" version for analysis purposes, being This Copy.

With these developments, marketers running permission based mailing lists will also want to read the article titled "The Federal Regulators Are Coming To Town", an in depth review of the pending American legislation.

[6]back The United States Federal Trade Commission has done a lot of work in the area of spam. To gain more insight into the legislative views of the FTC, you will also want to read a speech given by the FTC Chairman to a business conference in Aspen Colorado on August 19, 2003:

FTC Chairman Calls Spam "One of the Most Daunting Consumer Protection Problems FTC Has Ever Faced"

Also, read the recent testimony of Howard Beales III, Director of the FTC's Bureau of Consumer Protection given on October 30, 2003 before the House Small Business Comittee's Subcomittee on Regulatory Reform and Oversight:

Single Solution Won't Solve the Problem of Spam

[7]back"17529.4. (a) It is unlawful for any person or entity to collect electronic mail addresses posted on the Internet if the purpose of the collection is for the electronic mail addresses to be used to do either of the following:

(1) Initiate or advertise in an unsolicited commercial e-mail advertisement from California, or advertise in an unsolicited commercial e-mail advertisement sent from California.

(2) Initiate or advertise in an unsolicited commercial e-mail advertisement to a California electronic mail address, or advertise in an unsolicited commercial e-mail advertisement sent to California electronic mail address.

(b) It is unlawful for any person or entity to use an electronic mail address obtained by using automated means based on a combination of names, letters, or numbers to do either of the following:

(1) Initiate or advertise in an unsolicited commercial e-mail advertisement from California, or advertise in an unsolicited commercial e-mail advertisement sent from California.

(c) It is unlawful for any person to use scripts or other automated means to register for multiple electronic mail accounts from which to do, or to enable another person to do, either of the following:

(1) Initiate or advertise in an unsolicited commercial e-mail advertisement from California, or advertise in an unsolicited commercial e-mail advertisement sent from California.

[8]back "17529.5. It is unlawful for any person or entity to advertise using a commercial e-mail advertisement either sent from California or sent to a California electronic mail address under any of the following circumstances:

(a) The commercial e-mail advertisement contains or is accompanied by a third party's domain name without the permission of the third party."

[9]back "(b) The commercial e-mail advertisement contains or is accompanied by falsified, misrepresented, obscured, or forged header information. This paragraph does not apply to truthful information used by a third party who has been lawfully authorized by the advertiser to use that information."

[10]back "(c) The commercial e-mail advertisement has a subject line that a person knows would be likely to mislead a recipient, acting reasonably under the circumstances, about a material fact regarding the contents or subject matter of the message."

[11]back "17529.8. (a) (1) In addition to any other remedies provided by this article or by any other provisions of law, a recipient of an unsolicited commercial e-mail advertisement transmitted in violation of this article, an electronic mail service provider, or the Attorney General may bring an action against an entity that violates any provision of this article to recover either or both of the following:

(A) Actual damages.

(B) Liquidated damages of one thousand dollars ($1,000) for each unsolicited commercial e-mail advertisement transmitted in violation of Section 17529.2, up to one million dollars ($1,000,000) per incident.

(2) The recipient, an electronic mail service provider, or the Attorney General, if the prevailing plaintiff, may also recover reasonable attorney's fees and costs.

(3) However, there shall not be a cause of action against an electronic mail service provider that is only involved in the routine transmission of the unsolicited commercial e-mail advertisement over its computer network.

(b) If the court finds that the defendant established and implemented, with due care, practices and procedures reasonably designed to effectively prevent unsolicited commercial e-mail advertisements that are in violation of this article, the court shall reduce the liquidated damages recoverable under subdivision (a) to a maximum of one hundred dollars ($100) for each unsolicited commercial e-mail advertisement, or a maximum of one hundred thousand dollars ($100,000) per incident."

[12]back The Hypnotic Blueprint

For the details on this training program Go Here

[13]back Newsmon

For information on Newsmon, a free service for publishers and subscribers Use This

[14]back Real Simple Syndication or RSS:

For a general overview of RSS

What is RSS?

Resources on RSS

An RSS Workshop

Explanation of RSS, How You Can Use it, and Finding RSS Feeds

Search Engine For RSS Feeds

O'Reilly Network: RSS Dev Center

RSS Frequently Asked Questions