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DiStefano says traditional ISPs have become more important in e-mail marketing

Thomas L. DiStefano III, chairman-CEO of Perfect Web Technologies, a marketing technology company, says the e-mail landscape is changing. He predicts that consolidation will be a continuing trend and that traditional ISPs will take on a much larger role in the e-mail marketing sphere. BtoB spoke with DiStefano about his predictions, as well as the need for targeting and measurement.

BtoB: You recently predicted the cost of sending e-mail will approach parity with the cost of traditional direct mail by 2009. How is that possible?

Thomas L. DiStefano III: People still don't trust e-mail. They still feel there is something nefarious about the industry. For e-mail to flourish, we have to be able to verify the sender, prove that e-mail is desired by opt-in and guarantee delivery to the targeted recipient. To accomplish this—and to maintain the privacy, confidence and trust of businesses and consumers—each e-mail marketer will have to make considerable investments.

The level of investment and expertise necessary to create a truly secure, trusted and spam-free e-mail system will eliminate many of the small e-mail providers.

As a result, the industry will continue to consolidate over the next 18 to 24 months. The big guys will get bigger, and ISPs like Yahoo, AOL and MSN will swallow their pride and leverage the value inherent in their subscriber lists and databases. In three years, the e-mail market will resemble the overnight delivery market with three or four significant players.

That hasn't happened yet. You haven't seen the big money go there, because the highway is not paved well enough yet. When that happens, you'll see big money and big interest come in.

Right now, Yahoo [for example] has many business channels, but they are sitting on top of a mountain of assets: global e-mail addresses that they aren't harvesting yet.

The system will be secure and safe. When the marketer knows that when they send an e-mail to someone and it will be targeted and safe and secure, it will be more valuable to the marketer and the price of the asset will increase.

BtoB: What can marketers do to assure the best results from their e-mail programs?

DiStefano: They should only send to very specific targets, and they should measure the campaign and its results based on return on that investment. You need analytics to prove the marketing works. Some things just aren't going to work. I often see marketers say too much in their e-mail messaging. It should be short and concise, to the point, and present the offer to get the customer to respond. E-mail happens in real time, you get real time results, so you can't expect people to do any more work or reading than they have to. You need to give them the opportunity to easily go to the next step.

BtoB: What is keeping e-mail marketers up at night?

DiStefano: The biggest challenge for people who want to do e-mail marketing is spam compliance. I think it's a more of a challenge from the marketer standpoint rather than the provider standpoint. It puts a cloud over the whole industry. Every single ISP still has a myriad of filters, so even if you are compliant you still have a hard time doing your job because there is still too much mail not getting through. This has a negative lingering effect over the whole industry.