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Home arrow Email Optimization arrow The Impact of SPAM on Email Tested
The Impact of SPAM on Email Tested
Wednesday, 01 June 2005

Synopsis

Topic: The Impact of SPAM on Email — We investigate the new CAN-SPAM law and find how one major retailer risked a minimum $41,500 fine just by sending holiday emails to its customers.

We recently released the audio recording of our clinic on this topic. You can listen to a recording of this clinic here:

Windows Media Audio:
http://meclabs.com/cgi-bin/pl/pl.cgi?cvw

RealMedia:
http://meclabs.com/cgi-bin/pl/pl.cgi?cvr

This research brief will answer the following questions:

Findings

1. How much are you risking when you send a marketing email?

Not all SPAM comes from criminals in some abandoned warehouse. During the course of our research we came across a U.S. retailer who had unknowingly received more than 80 SPAM complaints in the past three months. They were simply sending periodic specials and updates to their past customers. As the performance of these emails started to diminish, we found that much of the email was not even reaching their customers, let alone being opened, read, and acted upon.

U.S. Retailer – Three-Month Email Study
Metrics Campaign A Campaign B Campaign C 3 Month Total
Messages Sent 17,042 20,734 20,944 58,720
Messages Returned 2,792 6,626 6,356 15,774
Percent Returned 16.38% 31.96% 30.35% 26.86%
Messages Opened 2,515 2,465 3,407 8,387
Percent Opened 14.76% 11.89% 16.27% 14.28%
Clicks 402 704 921 2,027
Click-Through Rate 2.36% 3.40% 4.40% 3.45%
Spam Complaints 20 21 42 83
Potential Fine $10,000 $10,500 $21,000 $41,500
Risk Per Click $24.87 $14.90 $22.80 $20.47

Check box What You Need to Understand: This U.S. retailer received over 80 SPAM complaints in the last three months.

The most alarming factor in these campaigns was the automatic $41,500 in state fines that could have been imposed by the State of Florida if these 83 SPAM complaints had all been pursued.

Most illegal unsolicited email still goes unpunished. While we wait for technology to catch up with legislation there will very likely still be a large amount of SPAM.

International SPAM coalition SpamHaus reports that 80% of all SPAM comes from just 200 sources. State and federal agencies are beginning to team up with ISPs to bring down these SPAM rings. Recent busts have resulted in many years in prison and millions of dollars in fines.

Your business may not be at risk of getting slapped with a million dollar lawsuit because of your latest email offer, but you could be breaking the law, and if prosecuted, you could be liable.

Each state has adopted its own legislation to handle SPAM. But to give an idea of the potential risk, imagine that you SPAM someone in Michigan and the font size of your unsubscribe instructions is smaller than the main body of your message.

Use our free SPAM fine calculator to see what your maximum fine could be:

http://www.marketplacesnapshot.com/spamfine.xls

2. How much does SPAM impact the productivity of businesses?

$20 Billion would provide food, shelter, clothing, and an education to each of the 83 million homeless children in India for the next 10 years.

$20 Billion is also the amount that the world spends each year in lost productivity and technology as a direct result of SPAM, or Unsolicited Commercial Email (UCE).

No one likes SPAM, with the exception of those few marketers who generate it. They thrive on a miniscule 0.0036% conversion rate because the majority of the real costs are incurred by the recipients of SPAM.

The amount of SPAM email that many people receive is overwhelming, prompting them to switch ISPs or email addresses or implement commercial SPAM-blockers that create yet another cost of doing business online. Each of us becomes increasingly aggravated by the amount of SPAM we receive.

We are especially concerned with the impact that SPAM has on the email newsletter publishing community. With over 50% of the world's email taking the form of UCE, legitimate newsletters are getting lost in a sea of junk.

We are also concerned about the amount of time and energy we spend processing junk email each day. We were curious about just how much SPAM costs the average U.S. company, so we sampled two groups of incoming emails. This is what we discovered:

SPAM vs. Legitimate Email
  SPAM Regular Email
Group A 67% 33%
Group B 70% 30%

Check box What You Need to Understand: On average 68% of all email our test groups received was SPAM.

A further analysis of the content of the SPAM revealed the following ratios:

Distribution of SPAM by Content Category (Group B)
Type of Message Percentage of Total Email
Good Email 30%
Product Offers 22%
Prescription Drugs 16%
Pornography 9%
Miscellaneous 8%
Personal Ads 4%
Travel Offers 4%
Credit Cards 4%
Money Laundering 3%

Check box What You Need to Understand: Illegal prescription drug offers, pornography, and product offers made up 47% of all of the SPAM our test groups received.

It's not hard to imagine that other companies are experiencing a similar loss in productivity due to junk email. With over 50% of the world's email being SPAM, it's probably costing each of us a lot more than we think.

3. What are the laws on SPAM and how can you be compliant?

The CAN-SPAM law refers specifically to Federal Senate Bill 877, which was signed into law by President Bush in December of 2003. This bill should be taken seriously and already it has resulted in hundreds of millions of dollars in lawsuits and even jail time for some spammers.

The primary purpose of the CAN-SPAM law is to put some regulations in place around email marketing. CAN-SPAM is not just designed to protect consumers from SPAM but also helps legitimate email marketers to get messages in front of their customers. If CAN-SPAM helps to curtail SPAM, then legitimate email marketing will receive more attention from recipients.

We offer a number of tips on complying with CAN-SPAM in the next section. The full legislation is available here:

http://www.spamlaws.com/federal/108s877.html

The FTC website also provides a number of resources for becoming CAN-SPAM compliant:

http://www.ftc.gov/bcp/conline/pubs/buspubs/canspam.htm

KEY POINT: The CAN-SPAM legislation has laid out some very clear guidelines for commercial email marketing. It is important to be CAN-SPAM compliant to improve email marketing effectiveness as well as to avoid significant financial penalties and even prison. In addition to federal law, most states have enacted their own legislation and automatic penalties for spammers.

4. How can you improve your email marketing and avoid sending SPAM to your customer base?

To answer this difficult question we enlisted the help of Tom Kulzer, CEO of email marketing firm AWeber Systems.

http://www.aweber.com/

Tom has certainly seen a lot of email in the seven years his company has been in the email marketing solutions business. He contributed significantly to the following advice:

  1. Be Aware of Filters

    SPAM filters have made it increasingly difficult to get your permission-based email delivered to your audience. O pen rates and click-through rates are affected by as much as 20-30% due to incorrect SPAM filter settings.

    The best thing you can do is attempt to educate your subscribers to put your domain on their "white list". Your best (and perhaps only) opportunity to do this is when they first subscribe or place their initial order with you. Otherwise they may never know they are blocking your email.

  2. Get Unambiguous Permission

    Make sure that the people who ask for your information have actually requested to be on your list. This is the number-one step in the battle for deliverability.

    For most email publishers and marketers, "confirmed" or "verified" opt-in is recommended. This means that a new list member is sent an email message when they are added; they must click a link or reply to this message to actually be added to your list. This guarantees that the email recipient was the individual who requested to be added to your list.

  3. Get Good Subscriber Addresses

    As your website visitors opt-in, ask for their "real" or "primary" email address instead of a free email address (like Yahoo or Hotmail). Free email addresses tend to be throw-away accounts and typically have a shorter lifetime than a primary ISP address.

  4. Maintain Your List

    Always promptly remove undeliverable addresses that bounce when sending email to them. An address that bounces with a permanent error two or three times in a 30 day period should be removed from your list.

    Some ISPs track what percentage of your messages bounce and may block you if you continually attempt to deliver messages to nonexistent mailboxes.

  5. Plan Your Message Format

    Using HTML messages to allow for text formatting, multiple columns, images, and brand recognition is growing in popularity and is widely supported by most email client software. However, most SPAM is also HTML-formatted as well; permission-based and SPAM HTML messages can often be difficult to differentiate in the mind of the recipient. If you do send HTML, it is important to always send a plain-text alternative message (also called text/HTML multi-part MIME format).

    In recent testing, we discovered that HTML emails actually bounced more often than text-based messages.

    Plain Text vs. HTML Email Deliverability
      HTML Text
    Bounce Rate 2.30% 1.15%
    Open Rate 2.03% 4.70%

    Check box What You Need to Understand: HTML email gets rejected by ISPs and SPAM filters twice as often as plain-text email.

    Bounce Rate Source: 2004 Study of over one million email messages by AWeber Systems, Inc.

    Open Rate Source: MarketingSherpa 2005.

  6. Send Legitimate Content

    Many ISPs filter email based on the content that appears within the message text. Therefore, you should be very careful when creating the copy for your email marketing messages. The following guidelines should be kept in mind:

    Website URLs: Research potential newsletter advertisers before allowing them to place ads in your newsletter issues. If they have used their website URL to send SPAM, just having their URL appear in your newsletter could cause the entire message to be blocked or filtered.

    Words/phrases: Choose your language carefully when crafting messages. Avoid topics often found in SPAM such as medication, mortgages, making money, and pornography. If you do need to use words that might be filtered, don't attempt to obfuscate words with extra characters or odd spelling; you'll just make your messages appear more like SPAM.

    Images: Avoid creating messages that are made up entirely of images. Use images sparingly, if at all. Much open-rate tracking technology uses images to calculate the number of opened messages. You may choose to disable this kind of tracking to avoid being filtered based on image content.

    Attachments: With viruses running rampant and spreading through the malicious email attachments, many users are wary of attached documents. It's usually better to use a website URL to link to files; this will eliminate fear of attachments on the part of recipients and also reduce the overall message size.

  7. Make Sure You Are CAN-SPAM Compliant

    The Federal CAN-SPAM law introduced a number of rules regarding the delivery of email. It's important you have your legal counsel review your practices and ensure you are in compliance.

    Anne Mitchell is CEO of the Institute for SPAM and Internet Public Policy <http:// www.isipp.com/>. Anne was kind enough to provide a quick outline for email marketers who want to make sure they are CAN-SPAM compliant:

    1. There must be a way for the recipient to opt-out permanently from your list. The key word here is "permanent", which goes beyond simply "unsubscribing". In other words, you will have to maintain some kind of "purge" file that will prevent these permanently opted-out users from being added back to your list.
    2. While a user does not specifically need to "opt in" to your list, you may not send email to lists you purchased, stole, or compiled unethically. In other words, only contact your customers or those who have specifically requested information.
    3. You must include a physical mailing address (street address) in every email message indicating who you are and how you can be contacted.
    4. If the email is an advertisement, it must be clearly marked as such, in either the subject line or the first lines of the body of the message (or both).
    5. Sexually orientated material must be clearly marked as such in the subject line.
    6. You may not mask where your email is being sent from. This regulation also precludes using fake names or illegal servers to send email.

    These six points cover most of the major regulations for email marketers. However, to be sure that you are fully compliant with CAN-SPAM, you should have your legal counsel review the full legislation here:

    http://www.spamlaws.com/federal/108s877.html

  8. Join a Reputation Service

    Reputation services are often used by large ISPs as a way to vet email senders regarding their email practices and policies.

    Businesses listed with these services are then given less stringent filtering or no filtering at all. Several reputation services are:

    http://www.isipp.com/iadb.php
    http://www.bondedsender.com
    http://www.habeas.com

  9. Get on the Whitelists

    It is essential to contact major ISPs and email providers about your permission-based email. Many large providers such as AOL and Yahoo! have specific whitelisting programs and postmaster website areas to ensure your email is delivered as long as you meet their opt-in list policies and procedures.

While no single tip will enable you to get 100% of your email delivered, each one can go a long way to reaching that goal. Email deliverability is about combating the effects of SPAM to ensure that legitimate, CAN-SPAM-compliant email is delivered to the intended recipient. The above techniques will help you do just that.

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SUPPLEMENTARY SOURCES::

Aweber Systems, Inc.

http://www.aweber.com/

Anne Mitchell, Esq.

http://www.isipp.com/ http://www.spamhaus.org

MEC Spam Research

http://meclabs.com/cgi-bin/pl/pl.cgi?srl

State Spam Laws

http://www.unspam.com/fight_spam/information/spam_laws.html

RELATED MEC REPORTS:

Linking Strategies Tested:

Long Copy vs. Short Copy Tested:

Comparison Search Engines Tested:

DealTime Tested:

Yahoo! Store Changes Tested:

eBay Basics:

Landing Pages Tested: 

Order Process Tested

Order Recovery Tested:

Transparent Marketing:

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Literature Review

As part of our research on this topic, we have prepared a review of the best Internet resources on this topic.

Rating System

These sites were rated for usefulness and clarity, but alas, the rating is purely subjective.

* = Decent | ** = Good | *** = Excellent | **** = Indispensable

The CAN-SPAM Act: Requirements for Commercial Emailers ****

http://www.ftc.gov/bcp/conline/pubs/buspubs/canspam.htm

CAN-SPAM Act of 2003 ****

http://www.spamlaws.com/federal/108s877.html

Spam Laws – U.S. Federal and State, International ****

http://www.spamlaws.com/

Accused Spammer Sues Individual Who Reported It ***

http://www.pcworld.com/news/article/0,aid,119368,00.asp

Inside the SPAM Cartel ***

http://www.amazon.com/exec/obidos/ASIN/1932266860/

SPAM Wars ***

http://www.amazon.com/exec/obidos/tg/detail/-/1590790634/

Anti-SPAM Toolkit ***

http://www.amazon.com/exec/obidos/tg/detail/-/007223167X/

Marketing with Email ***

http://www.amazon.com/exec/obidos/ASIN/1885068409/

Permission-Based Email Marketing ***

http://www.amazon.com/exec/obidos/tg/detail/-/0793142954/

Effective Email Marketing ***

http://www.amazon.com/exec/obidos/tg/detail/-/0814471471/

Advanced Email Marketing **

http://www.amazon.com/exec/obidos/tg/detail/-/0974439304/

Learning to Market Through SPAM **

http://www.imediaconnection.com/content/1177.asp

Email Marketing Articles **

http://www.emaillabs.com/resources_articles.html

About.com: Email Marketing **

http://email.about.com/od/emailmarketing/

About.com: Email Marketing Tips **

http://email.about.com/od/emailmarketingtips/

Email Marketing Ethics and SPAM Reporting **

http://meclabs.com/cgi-bin/pl/pl.cgi?ssr

About This Brief

Credits:

  1. Editor — Flint McGlaughlin
  2. Writer — Jalali Hartman
  3. Contributors — Brian Alt
    Tom Kulzer
    Anne Mitchell
    Sarah Baldwin
  4. HTML Designer — Cliff Rainer

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