Opt-in E-mail Services: Why Mostly Ignored?

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By: Steve Outing The argument is deceptively simple. Web sites can't succeed if they rely on consumers/readers to come visit them; site operators must devise ways to deliver content to the consumer. A newspaper wouldn't survive if it weren't for home-delivery subscriptions, so why should a news Web site be any different? It, too, must deliver its editorial content and advertising to the consumer, not force them to remember to come visit.

That will sound familiar as the argument that many "push" technology providers espoused last year, when push was the buzzword du jour of the Internet world. (Today, it's undoubtably "portal.") Now push as a concept has cooled down dramatically, with push king PointCast even pulling back its plan for an initial public offering.

But wait. Push should not die an early death; it's got a lot of life left in it if you define push in terms of e-mail delivery services and discard the more technologically sophisticated (and thus less open and universal) forms of push. Many observers continue to say -- and I wholeheartedly agree -- that opt-in, personalized e-mail services will approach "killer app" status in the coming year. Yet, the majority of news publishers practically ignore e-mail delivered content services. They are overlooking a huge opportunity.

NCN fallout

In the newspaper Web site world, e-mail delivery services got pushed down (if you'll pardon the pun) with the demise of New Century Network (NCN), the nine-company newspaper cyber consortium. NCN had been in the process of developing an HTML e-mail service that was to be used by many of its members; the concept was gaining momentum just when NCN flopped. Vin Crosbie, president of the consulting firm Digital Deliverance, was the key player in developing NCN's HTML e-mail service, and after NCN shut down, Crosbie and some colleagues set out to try to sell a similar service to news Web publishers.

While Crosbie is having successful discussions with some publishers about the need to provide e-mail content delivery services, in large part the news industry is slow to take e-mail seriously. Newspapers are slower than other industries to embrace a lot of new media developments, and "I think they'll be slower getting into e-mail, too. It's a conservative industry," Crosbie says.

In Europe, e-mail delivered content services are more common than in the U.S., largely because most Europeans pay per-minute charges on local phone calls, which makes Internet access considerably more expensive than in The States. Europeans thus spend less time surfing Web sites, so delivering content to their e-mail boxes makes sense as a better business model than expecting them to visit your Web site.

Crosbie makes the point in his presentations to publishers that "e-mail is a medium in its own right," distinct from the Web. Most Web publishers today look at e-mail as a promotional vehicle to drive traffic to a Web site. (Indeed, my Stop The Presses! column, which appears on the Web three days a week, is promoted by an e-mail reminder service and is not available as full content delivered via e-mail by my publisher. I point that out not to criticize my publisher, but in the interests of disclosure.) But Crosbie thinks "that will change" and more e-mail services will send out full content with advertising attached.

And why not? The ideal news online service should offer its users delivery of whatever content they desire from its offerings. Rather than expect a reader to check the Web site each day for a favorite columnist, it's far better -- dare I say, it's a "no-brainer" -- to e-mail her the column in HTML format. The reader sees the column just as she would if visiting the Web site, and if the e-mail is opened then any banner ads contained with the column are pulled off the Web site and the ad gets its Web banner impressions. The e-mail delivered column is the reader's first contact with the Web site for the day, and after reading the column she's more likely to click other navigation links on the column page/e-mail to explore other content on the Web site.

HTML vs. ASCII

Of course, much of the Internet-using public still views mail in text (or ASCII) format. It's difficult to get accurate statistics, but estimates are that one-third of e-mail users have HTML-enabled mail client software, and that figure is growing rapidly. Most new Internet users will use e-mail software that can read HTML messages. Meanwhile, when operating an e-mail service you can't ignore those who trade in text e-mail.

The best solution is to offer both HTML and text versions of any content you offer via e-mail, selected when the consumer signs up. That approach is taken by Infobeat, the largest e-mail content provider. While Infobeat sends out full content in text format, for many news sites it makes more sense to offer full content only in HTML e-mail format, and teaser content in text. So the text-format recipient of an e-mailed column might get a headline, summary blurb and URL to the column on the Web, while the HTML e-mail recipient gets the actual column in toto.

The next question to ask is what content to offer as regular e-mail delivery. Crosbie says don't go too broad. It's narrow topics that consumers will care enough about to subscribe to an e-mail service -- a particular columnist's work; stories about a specific sports team; technology coverage from within a newspaper's business section; local weather forecasts; calendar listings for local concerts for the coming weekend; on down to truly local stuff like school lunch menus and little league team scores. Don't bother e-mailing out the home page of the site, Crosbie says, because consumers can get that kind of general news summary from many sources. Think about narrower topics.

Only with that kind of narrowness of scope can you mould a decent advertising vehicle with e-mail. Advertisers can be offered a medium for reaching Denver Bronco fans who subscribe to a newspaper's coverage of the team, for example.

The convert

E-mail services at most newspaper companies have not gotten high priority; many new media executives with multiple projects and strategies to occupy their minds have pushed e-mail down to their "B" lists. But a few executives are waking to the idea that e-mail is a killer app waiting to be tapped. Jack Stanley, vice president of operations for the Houston Chronicle, says he's been preaching e-mail to anyone who'll listen for about the last six months. Meanwhile, a good portion of the newspaper industry has gotten caught up in "portal" mania and focused their attention on that concept, which for newspapers companies is largely "a bunch of nonsense," Stanley says.

While most of us in the new media field spend our business hours connected to the Internet, the vast majority of people who use the Internet spend only a few hours a month online. That's not much time for surfing Web sites. Given that reality, says Stanley, delivering your content via e-mail services that consumers request is clearly the way to go. A piece of requested, regularly delivered e-mail from a news site is the best way to get a first-page impression for your Web site, he says. Without it, chances of your site getting included in the typical consumer's scarce time spent online each month are slim.

The Chronicle's e-mail delivery plans are currently under construction, and Stanley hopes to have an e-mail content service fully in place by this fall. Examples of content that will be offered as an e-mail stream to consumers include Web section fronts (top stories of the day in business, sports, etc.); special sections (like the Chronicle's coverage of the local space industry); and event listings (such as advance notice of upcoming music concerts).

Stanley says that over time e-mail delivered content could include truly local information like school lunch menus and little league sports scores. That information is likely to be produced by community organizations and groups themselves rather than newspaper staff, as part of a "community publishing" effort. Once you have the data stream in place to produce a Web page -- no matter what the content -- it's a simple matter to add an e-mail delivery link and start sending the page to interested consumers.

The Chronicle site offers three tiers of content. Some content is freely accessible to any site visitor (such as classified ads); another layer is available only to those site visitors who are willing to register (which is free) and provide some basic demographic information; and the final tier includes newspaper print subscribers who also register online, who receive free access to some services (such as the searchable newspaper archive). Stanley says that the Chronicle may offer e-mail content services as one of those free enticements to encourage print subscription and/or online registration.

Stanley expects to offer only HTML e-mail but not a text version. HTML e-mail is simple to pull off and inexpensive, because you've already created the content in HTML for the Web site; it's just a matter of mailing out what's already been produced and managing the list of recipient addresses. He'd like to offer text versions also, but the added cost of producing a second piece of reformatted information is the reason behind foregoing it.

Real money

Stanley is convinced that "we can actually make a business out of this." When you look at the entire media revenue pie, he says, about one-quarter of it today is the huge direct mail business, where e-mail delivery will likely draw its revenues. Combine the granularity of e-mail delivery with demographic information collected in the online registration process and you have a potentially large revenue producing business model.

Think about a sporting goods store that sponsors an e-mailed news feature about the Atlanta Braves, as an example. That store can offer e-mail recipients the opportunity to sign up for the store's own e-mail list, on which it occasionally sends out notices of special sales, electronic coupons offering discounts, or drawings for free Braves tickets. Those are opt-in lists -- as differentiated from "spam" or junk e-mail -- that consumers value, and that advertisers will pay premium rates to take part. Many people think that e-mail has modest money potential, but that's really not accurate.

Indeed, recent industry news coverage has focused on the idea that Web banner ads are not very effective. A new survey by Nikkei Multimedia finds that e-mail advertising is significantly more effective than Web ads. It's mostly a matter of the Internet publishing industry not yet taking e-mail delivery services seriously enough to give it a chance to shine.

Ken Doctor, vice president of editorial for Knight Ridder New Media and another proponent of newspaper Web site e-mail services, says the newspaper industry in particular has been slow to adopt e-mail models. "We've been slow to move beyond this first generation of newspaper Web sites," he says. In the next six months, he expects to see new models emerging that will take advantage of e-mail delivery's promise. Within Knight Ridder, new products for the newspaper chain's 30-plus Web sites will incorporate e-mail delivery models as they are introduced, Doctor says.

Contacts: Vin Crosbie, crosbie@well.com
Ken Doctor, kdoctor@realcities.com
Jack Stanley, jack.stanley@chron.com

The power of portals

A report released this week by Cyber Dialogue includes the interesting conclusion that most Internet users go to America Online, Yahoo! and Quicken online to access financial services on the Internet. What this indicates is that consumers are placing brand recognition of those "portal" Web sites over traditional, well known financial institution brand names. That piece of data is a profound endorsement of the portal strategy for Web sites, which news publishers might want to heed.

'Co-opetition'

The Internet in many ways has eliminated the traditional walls between competitors, who now are apt to cooperate at the same time they compete. Another example of that appeared this week, with news that newspaper-company-backed Classified Ventures and CitySearch have agreed to jointly develop online auto and real estate classified advertising products and services within CitySearch's online city guides.

This gets interesting when you consider that the owners of Classified Ventures, including newspaper chain Knight Ridder, operate online city guides and online classifieds services that compete in some markets with CitySearch sites. Go figure!

Steve

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This column is written by Steve Outing exclusively for Editor & Publisher Interactive three days a week. News, tips, and other communications may be sent to Mr. Outing at:steve@planetarynews.com

The views expressed in the above column do not necessarily represent the views of the Editor & Publisher company

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