New Revenue Opportunity For Portals, ISPs & Web Mail Providers.

Promotional e-mail delivery will emerge over the next two years as a new revenue stream for large portals, ISPs and Web-mail providers as they exert greater control over e-mail passed between marketers and consumers, according to a new report released by Jupiter Research. As e-mail marketing proliferates, Jupiter projects that ISPs and e-mail service providers will have approximately 5.6 billion e-mail messages cross their networks for each one million subscribers by 2005. Additionally, Jupiter predicts that advertisers will send 268 billion e-mail messages in 2005 – 22 times the number of promotional marketing e-mails sent in 2000.

“Internet e-mail service providers control a crucial chokepoint between marketers and the millions of consumers they want to reach. As they restrict access to a user’s primary inbox and monetize the delivery of promotional e-mail, advertisers looking to reach consumers online must prepare to pay a premium,” said Christopher Todd, analyst at Jupiter Research. “Although shortsighted marketers will view this as extortion, savvy marketers will recognize it as an opportunity to distance their messages from existing inbox clutter. Large portals, ISPs and other organizations that have a sizable e-mail subscriber base will see it as a significant opportunity to generate additional revenue.”

Expect Delivery Tiers to Emerge for Marketing-Related E-mail

Jupiter believes that the current free delivery of promotional e-mail will evolve into a tier-based scenario that forces marketers to refine and focus their e-mail strategies:

Top Tier — Profiled delivery into the primary inbox based on individual usage behavior (i.e. time of day)

Second Tier — Enhanced delivery into the primary inbox with enhanced fonts and icons to break through clutter

Third Tier — Standard delivery direct to the primary inbox for marketers that compensate for access and for all personal or one-to-one e-mail messages

Bottom Tier — Bulk delivery into a promotional “bulk” e-mail inbox (no fee)

“On the consumer side, this may be end of SPAM as we know it,” Todd said. “Consumer e-mail users will adopt and accept new delivery tiers as they realize increased efficacy within their primary inbox.”

Advice for Marketers Looking to Reach Mass Online Audiences

For direct access to the user’s primary inbox, Jupiter advises marketers to take the following steps:

Factor costs of promotional e-mail delivery into future e-mail marketing budget planning.

Establish strategic partnerships with major Internet e-mail providers to secure enhanced delivery of promotional e-mails as the tier-based scenario evolves.

Include e-mail delivery as a primary component of anchor tenancy or exclusivity agreements with major portals and ISPs.