There is a dirty little secret with email service providers (ESPs) and it’s about time it has been brought to the forefront of industry discussions. I learned about the intricacies of this secret while culling Gold Lasso customers that exceeded our spam complaint threshold. After politely showing a few of them the door, out of spite they revealed to me that they were simultaneously using the services of five other competitors unraveling a twisted web of ESP “switch-a-roonie” that promotes spam and hurts the industry. This dirty little secret is so obvious that I’m surprised it hasn’t been exposed by privacy and anti-spam advocates and used to smack the smug faces of ESP executives. Surprise! The dirty secret is that most ESPs have no economic incentive NOT to do business with customers who refuse to use good list practices. Let me say it this way: Email service providers make good money from bad customers who in some circles could be considered spammers.

You might be scratching your head thinking most ESPs have strict anti-spam policies and lobby hard to clean up the industry. For the most part this statement is correct; however, there are always a handful of bad customers that are tolerated because of the big checks they stroke. These customers come in the forms of traditional direct marketing agencies that have to blow their client’s budget, affiliate marketers, and idiots who have deep pockets but not a clue about how email marketing works. One thing these types of customers have in common is that they want or have to send large volumes of email and have either purchased an email list or have appended a purchased direct mail list.

Contrary to popular belief, most ESPs don’t give their high paying bad customers the boot. Most try to force them through a reformation process. However, if the customer continues to ignore best practices some ESPs will do one of the following: either isolate the customer on an IP block reserved for wrongdoers (a sort of purgatory) or mix their bad customer’s email across multiple IP addresses of customers with good sending practices increasing the bad customer’s chance of making it to the inbox.

In the first scenario, the ESP milks the customer as they are well aware their email will either wind up in an ISP black hole or get bounced faster than an Atari Breakout ball. The bad customer, fed up with bad deliverability, will feverishly switch to a new ESP as soon as their contract is up. In the second scenario, the ESP increases the deliverability risk of their good customers. The attitude is akin to “so what if some customers get 90% deliverability instead of 96%. What’s 6%?” Eventually this attitude catches up with reality and good customers start complaining. This is when the ESP gives the bad customer the boot as their foot is already in the door of another ESP. Contrary to what Ken Magill of Direct Magazine says—“a marketer can’t ride an ESP’s e-mail reputation, folks”—a marketer CAN ride the reputation of an ESP’s customers… for a while at least. In either case the ESP is doing a disservice to not only their customers (good and bad) but to the industry at large.

The time has come for ESPs to get together and create their own blacklist of customers who they have booted because they refused to clean up their act. This would prevent these bad customers from trying to hop ESPs causing headaches and silently undermining the industry. The secret is out! Let’s do something about it.

—Elie Ashery of Gold Lasso

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The mobile phone continues to rise in popularity as a primary communications device making email rendering on mobile devices a serious issue. According to data from MarketingSherpa, approximately 64% of “key decision makers” are reading messages on a BlackBerry or other mobile device. Let’s find out why this issue is finding its way to the top of many a priority list.

What is the problem?

Right now, mobile devices only display text emails. Basically, they make a mess of a finely crafted HTML message. They are fussy about font size and the user is often scanning, not reading, the text. Email marketers will also have a challenging time separating their mobile users in email databases from traditional computer receivers. The segmentation will be necessary, however, to ensure proper rendering of messages to non-HTML-friendly email clients. Another snag is that mobile devices also make it more difficult for email marketers to determine the true open rate of their campaigns. Metrics, we know, are key to evaluating success and implementing positive change.

How do email marketers solve this problem?

There is no simple answer to this question, yet. But, there are questions to start discussing with your email design and marketing teams. The first step is to make sure you’ve considered your audience demographics. Are they using BlackBerrys? Why? Many mobile-device devotees are checking email for urgent issues and will pass over anything that looks disposable. Another consideration that will play a key role as email marketers update their strategies for this new medium is the nature of the campaign. For example, if the information is time-sensitive, can the campaign be targeted to mobile users (and not computer receivers) with only text and short, concise messages?

Naturally, we must also consider how we are gathering information in data collection methods such as surveys, landing pages and other tools. Do your sign-up forms include a mobile phone perference? Do recipients have a way to tell you that they use their mobile device as a primary communications tool? Start by addressing these issues and keep mobile devices on your radar screen as the challenges and opportunities unfold.

—Elie Ashery of Gold Lasso

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Waking up Tuesday morning to CNBC’s Becky Quick telling me the Dow Jones Futures were down almost 600 points after a surprise three-quarter point Fed rate cut really put a damper on my day. As I watched the real-time chart tick lower, my stomach started to knot leaving me in a dizzying stupor. It’s times like these that bring me back to my days as a small cap equities analyst where I would question CFOs about where they planned to cut and by how much. The first answer out of their mouths was almost always “non-revenue generating jobs,” such as customer and administrative support. The second most common answer is “advertising and marketing.” The second answer always baffled me especially from companies that aren’t leveraged. In a time of a recession, companies with access to capital have an unusual opportunity to take market share as they are able to sustain or increase their marketing budgets. Whenever a CFO with a decent to strong cash position told me that he or she was going to slash their marketing budget going into an economic downturn, I eventually sold the company’s stock and bought a competitor’s that kept theirs intact. This strategy worked well—especially in the services sectors.

Although most people do suffer from a recession, winners do emerge and I’m confident that email marketing could get a gold medal. During the 2001-2002 recession, email marketing was just on the cusp of becoming widely adopted but had yet to make the necessary penetration to become a formidable part of the promotional mix. Most notably, the cost per email hovered around $0.05, way below the cost of a direct mail piece yet still prohibitive for most companies to implement two or three times a week on a large scale. Fast forward to 2008, email marketing is now one of the least expensive marketing channels, and according to the DMA, a very high performer. Today, most email marketers are paying under a penny per email, but email marketing only claims a small part of the average marketing budget. Even though email marketing has become widespread, email marketers, on a larger scale, are still not leveraging the medium’s true potential such as advanced personalization, delivery monitoring and management, and integration with third-party systems.

This gap, coupled with a potential economic downturn, presents a unique opportunity for email marketers to lobby their CEOs and CFOs for a larger slice of their marketing budget. Email marketers have already proven that email marketing works well. Now is their opportunity to reclaim it as the most relevant push channel available and the biggest bang for the buck.

—Elie Ashery of Gold Lasso

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Anyone who thinks the messaging systems in social networking sites will completely replace general consumer email is an idiot, plain and simple. Analysts, pseudo-journalists and bloggers have recently been spewing some cockamamie notion that consumers will dump their inboxes in favor of communicating through the likes of Facebook and MySpace precluding email marketers from reaching their customers. All these morons have to do is interview any 12-year-old to learn that the underpinnings of communicating through MySpace are driven by email. Want to open a Facebook account? Oh, wait! You need an email address. You might be thinking why I care so much about what this small spec in the blogosphere says? The answer is simple. I’m protecting your email marketing budget and your job. Sometimes the press likes to run with whacky predictions without doing adequate fact checking and the last thing I want is for your CEO to read some half-baked article written by a college intern about how the whole world is going to ditch their email accounts for social networking.

In fact, I predict just the opposite will happen in 2008. Social networking websites will open their networks to become the new inbox providers of choice for ages 25 and younger. Instead of trying to fight your way into the inboxes of Yahoo and Hotmail users, MySpace and Facebook will become the new gatekeepers of younger generations. The reason why I’m so confident in my prediction is the simple fact that email is a daily time consuming ritual that can’t be ignored by online advertisers. And as social networking sites gain a larger share of advertising budgets, they will need to guarantee visitor time. Therefore email will have to be included in social networking’s repertoire of services cannibalizing market share from AOL, Yahoo and the rest of the old guard.

The argument to counter my prediction is that younger and even some older generations are spending less time in their inbox and instead are using social networking sites and SMS to communicate with friends and family. While I agree with most of this sentiment, it’s a far cry from the doom and gloom coming from the anti-email establishment, especially since social networking message systems and general email will become synonymous as MySpace and Facebook race to increase ad revenue. Don’t get me wrong, eventually email marketers will have to contend with sharing some of their budget with similar mediums such as SMS. But don’t let your CEO become enamored by some pie in the sky notion of a digital fantasy land.

—Elie Ashery of Gold Lasso