"Buy Offline, Get Spammed Online"
The Direct Marketing Association released new guidelines that officially endorse a controversial practice that allows businesses to track down customers' e-mail addresses without explicitly asking for them.
The guidelines cover "e-mail appending," or "e-pending," whereby companies append e-mail addresses to conventional customer records. The addresses are often purchased from third-party data-collection agencies and matched to other information, like purchase records.
Companies argue that since the customers established a relationship with them through purchases, they have a right to build on that relationship by marketing to them through e-mail. But critics say the practice is akin to tracking down a customer's phone number and address after a single purchase -- a justification that would rile most people.
Proponents, however, argue that the practice is beneficial to businesses and consumers, because it makes it easier and cheaper for companies to keep their customers informed about current purchases and future deals.
Members of the DMA reiterated that argument last week and defended the guidelines as a sign that its member companies are taking steps to increase consumer privacy and reduce spam.
"We know that consumers feel strongly about online relationships," said Patricia Kachura, vice president of ethics and consumer affairs for the DMA. "We are very concerned about marketers who try to e-mail consumers in a way that causes those consumers to lose control of how they are contacted."
Kachura said the DMA decided to issue guidelines for e-mail appending after learning that some DMA member companies had been trying to guess customers' e-mail addresses. This puts many customers at risk of having sensitive information e-mailed to strangers with similar names.
Although the DMA's new guidelines don't explicitly prohibit guessing, they do require that DMA member companies make "reasonable efforts" to ensure the accuracy of the e-mail addresses that they append to their existing customer records.
This assurance is likely to come from third parties that sell lists of addresses to companies and that maintain records on how they obtained those addresses, said Kachura.
Additionally, members must ensure that when the addresses are first gathered, the customers are "provided notice and choice" about receiving e-mail offers and that they did not opt out.
The DMA believes rules like these -- along with the threat of ejection from the organization for any member that doesn't follow them -- will lay to rest some of the issues surrounding e-mail appending. But some antispam activists say they are not satisfied.
"As a general rule, 'e-mail append' has a reliability problem," said Richard Welty, founder of spamvertized.org, a site that tracks how politicians use e-mail marketing. "There could be cases where banks do an e-pending run and get customer addresses that they think are right, but aren't. Then they'd be sending out confidential information to the wrong person."
Welty noted that the question of reliability was made worse by the fact that some third parties that offer e-mail-appending services simply harvest e-mail addresses off the Web and then claim to have legitimate lists.
The DMA's Kachura acknowledged that this happens, but noted that companies could still be successful at e-mail appending if they seek out reputable list sellers.
As for why companies don't simply gather e-mail addresses directly from their customers by sending them postcards in the mail, Kachura noted the response rates for such campaigns tended to be quite low.
"Of course, it's a best practice to send a postcard when you want more information, but people tend not to be active about sending them back," said Kachura. "You get a small percentage responding.
"What we're hearing from members is that they're very successful in establishing relationships (using e-mail appending)," added Kachura. "It's very exciting for the customers."
That may be the case for some customers, but it doesn't happen every day, cautions Marcel Neinhuis, a senior analyst at the Radicati Group, a research firm specializing in e-mail communications.
"E-mail communication between customers and businesses can be a great experience for both parties, but these relationships are rare," said Neinhuis.
Neinhuis said the DMA guidelines are "too loose" and noted that it would be better for companies to let consumers initiate e-mail correspondence.
"In consumers' fight against spam and unwanted e-mail, this is a step in the wrong direction, because it is based on opt-out marketing," he said. "The correct way for businesses to approach consumers with e-mail correspondence is to ask consumers if they would like to opt in to a mailing list."
That is unlikely to happen, though, because many marketers think opt-in regulations are too restrictive.