May 10, 1997

Federal Trade Commission
Room H-159
Sixth Street and Pennsylvania Ave., N.W.
Washington DC 20580

Re: Consumer Privacy 1997 ­ Comment, P954807 - Commenter 009

To the Secretary:

Thank you for requesting additional comments to supplement the comments that we submitted on April 11, 1997!

2.17 What are the risks and benefits, to both consumers and commercial entities, of unsolicited commercial e-mail? What are consumers' perceptions, knowledge, and expectations regarding the risks and benefits of unsolicited commercial e-mail?

The risks of unsolicited email are many; the benefits are very few. That is why we strongly disagree with The Direct Marketing Association’s opt-out position on unsolicited commercial email. Unlike the DMA, we do not believe that unsolicited email offers consumers the opportunity to shop for products and services of interest or that it offers businesses an effective way of reaching their target market. Because harvesting email addresses is easy and sending email messages is cheap, Internet users are being bombarded by dozens – sometimes hundreds – of unwanted offers a day for multi-level marketing schemes, pornographic material, and other dubious products and services. The reality is that junk email wastes consumers’ time and money, destroys marketers’ credibility with the very markets they are attempting to reach, and jeopardizes the potential of the Internet to become a true one-to-one marketing medium. To expect consumers to opt out of this electronic onslaught is absurd. The Electronic Mail Preference Service proposed by the DMA will never deter the hundreds of "spammers" who mail out millions of email messages a day with little regard for their recipients’ rights or privacy.

The answer, as we see it, is opt-in email marketing. Though the DMA and much of the traditional direct marketing community view opt-in marketing as a pipe dream that would sharply limit the number of potential prospects to be targeted, our experience suggests just the opposite. Our PostMaster Direct Response email marketing service currently has more than 3 million email addresses under management in over 3,000 topical categories. Not only have hundreds of thousands of people opted in to receive commercial messages on topics of interest but many of the marketers who have used our service have achieved double or triple the response rates that they typically generate through direct postal mail. Clearly, consensual marketing can work on the Internet – if the traditional direct marketing community will only give it a try!

Here’s how our PostMaster Direct Response system operates:

1. Interested consumers and business owners visit our site and voluntarily request to receive news of new products, services, and special offers from the direct marketers who rent our lists. To see our signup form, go to http://www.postmasterdirect.com/subscriptions.mhtml and click on Subscribe to Lists. Our List Member Guarantee (http://www.postmasterdirect.com/pledge.mhtml) assures our list members that their privacy will be protected, that they will not be spammed by unsolicited email, and that they will be able to remove themselves from our lists at any time for any reason. The reason that we get so many signups is because 1) our company’s Web site provides useful information and software for Web developers and Internet marketers and 2) our successful grassroots marketing campaign has resulted in over 10,000 other Web sites linking to us and pointing traffic our way. In addition, we have entered into list management agreements with other high-traffic Web sites and publishing companies such as Scholastic, Macmillan Computer Publishing, Newslinx and Starting Point to generate additional opt-in names and email addresses.
2. Once an individual subscribes to one of our PostMaster Direct lists, he receives an automated message from our computer confirming that he is on our list and giving him the opportunity to get off our list before he receives any commercial messages. If the list member wishes to remain on the list and receive commercial email, he does nothing. If he wants to remove himself from the list, he can forward the message to a special deletion address on our server and be removed automatically. Once the list member begins receiving commercial messages from the marketers who rent our lists, he can remove himself from a particular list or from all of our lists at any time. Every PostMaster Direct message that we send out includes a header containing deletion instructions and a footer containing a special code unique to that recipient. To see a sample message, go to http://www.postmasterdirect.com/mailinglook.mhtml
3. Marketers interested in renting our lists visit our site at http://www.postmasterdirect.com/ and select the list they wish to mail to. Our software allows marketers to search for lists by keyword, category or list owner. Once the marketer has selected the list or lists that he wishes to rent, he is prompted to copy and paste an email offer letter to the order form on our Web site. Each marketer’s message is reviewed by our staff for appropriateness and relevance to the selected list or lists; marketers who submit off-topic or inappropriate messages are contacted by our staff and asked to reword their message or select a different list. Once the list selection and direct email copy has been approved, we distribute the marketer’s message to our list through our high-speed server and T-1 line. The reason we handle the mailing ourselves is to ensure our list members’ privacy; at no time are our list members’ names, email addresses, or other information released to the marketers who rent our lists.
4. Once the mailing goes out, a list member who wishes to respond to the marketer’s offer can click on the Reply button of his email software to contact the marketer directly or click on the hyperlink in the email message and visit the marketer’s Web site. A list member who does not wish to respond can ignore the offer or remove himself from the list.

Our experience to date indicates that opt-in email marketing offers an effective way for marketers to reach prospective customers on the Internet. Major publishers such as Ziff-Davis, IDG, and CMP have used our lists with great success to offer free trial subscriptions to their magazines. One of our clients, Internet Billing Co. (http://www.ibill.com/) used our lists to increase its sales by 1,000 percent in 12 months. The Tamarac, Fla., company has also expanded its client base to over 3,000 accounts, seen its 900-number transactions increase five fold, and watched its credit-card transactions multiply by a factor of 10. Another client, ichat (http://www.ichat.com/), a developer of real-time chat software for the Web, closed $50,000 in sales in five hours by mailing to our list of Web developers and Internet professionals. To read more about our success stories, please visit our site at http://www.postmasterdirect.com/success-stories.mhtml and http://www.postmasterdirect.com/success-ichat.mhtml We have also received positive feedback from our list members. Not only do they often respond to our marketers’ offers with high 7 to 10 percent response rates but they contact us when changing email addresses to make sure that they don’t miss any offers!

Traditional direct marketers waste millions of dollars a year pitching offers to consumers who, for the most part, are not interested in what they have to sell. The Internet, because of its unique interactive nature, offers marketers the ability to target their market more precisely and to establish true one-to-one relationships with consumers. This is why mass marketing techniques such as blitzing millions of people with unsolicited marketing messages are not only wasteful – they simply miss the point of what this new medium is all about. Despite what the DMA and many marketers believe, consumers do not need to be tricked, bribed or coerced into receiving commercial offers. Consumers – especially Internet consumers -- will allow themselves to be marketed to voluntarily provided that marketers respect their privacy and send them only information that they want.

While it is true that an opt-in system will not result in the creation of a database containing tens of millions of email addresses overnight, we do not believe that such a database is necessary in one-to-one medium like the Internet. With the overwhelming amount of information coming onto the Internet every day in the form of email messages and Web pages, online consumers are in no danger of information deprivation. Likewise, Internet marketers have many ways to reach Internet consumers other than bombarding them with electronic junk mail. Millions of consumers have demonstrated a willingness to opt in to Internet newsgroups and discussion lists to receive information about topics of interest. We believe that consumers will also opt in to marketing mailing lists given the chance. Rather than attempt to superimpose the opt-out principles of the postal world, direct marketers should open their eyes to the possibilities of this new interactive medium and give opt-in email marketing a try.

Sincerely,

Rosalind Resnick
President
NetCreations, Inc.
Rosalind@netcreations.com