In 2003 a lot of people who had not previously been affected by the most prominent e-mail trends certainly noticed the evidence. New records of e-mail based spam and malicious code forced governments and businesses to take action. Several aggressive e-mail based viruses managed to down whole service sectors in some countries, and e-mail users all over the world seem to have had enough. During 2003 governments introduced new laws to slow the increasing trend of Internet misuse.
L-Soft has been closely monitoring trends in e-mail communication and actively promoting opt-in messaging in Europe and the United States. This article summarises last year's trends and provides some insights into the coming year.
Virus and spam records broken
The year 2003 has been a true nightmare, marked by vicious virus attacks and ever-increasing spam, crippling vulnerable users and networks. For the first time in history, spam counted for more than half of all e-mail traffic. According to MessageLabs, the spam to e-mail ratio exceeded 50 percent for the first time ever in May. Just over two years ago the same ratio was under 10 percent.
When viruses and spam converge, as they did in 2003 with the Sobig.F virus, the results are devastating. It brought down many networks, impacting governments, companies and organisations, sometimes for several days at a time. ATMs were put out of order, air traffic control systems were slowed down at some international airports, banks were suffering from system failures and whole rail networks were crippled by delays when their signalling systems were down. Sobig.F turned the computers of unknowing users into e-mail proxy servers. The spammers then used these proxies to redistribute spam. Networks were overwhelmed by the traffic and many users had their mailboxes shut down due to the sudden volume of mail.
Public awareness of the problems facing electronic communication was drastically increased last year. As e-mail became an increasingly essential tool for businesses, public service and governments, the politicians gained a better understanding of what damage e-mail misuse can cause. As a result, global efforts to fight spam have gained momentum.
New direction towards opt-in
History was made in 2003 by introducing legislation to fight spam both in the European Union and in the United States. Although the EU directive on privacy and electronic communication and the U.S. Can-Spam Act have been criticised for their ineffiency to combat spam, these laws should be seen as the first step in the right direction. Both the EU and the FTC will follow up, evaluate and report the impact of these new laws, and hopefully the U.S. will eventually modify its existing legislation, introducing opt-in as the only means of commercial e-mail communication.
The EU opt-in directive has established a minimum standard and starting point for the codes of conduct for marketers engaging in e-mail marketing. The year 2003 proved that those marketers who take permission-based e-mail marketing seriously get results that outperform direct mail, print ads and Web banners. Many studies have shown that successful businesses have achieved two digit open-up and click-through-rates for their permission based retention e-mail marketing.
1. Things will get worse before they get better
There is no guarantee that 2004 will be better than 2003. Despite the positive developments of 2003, the spam trend will not decline without further efforts. MessageLabs has predicted that by April 2004 70 percent of Internet e-mail traffic will be spam, whilst security specialist F-Secure has anticipated that the attacks against data systems will increase and become more professional. Still worst of all, virus designers and spammers will be working together, moving their activities to countries out of reach for the anti-spam laws where they can continue to fine-tune their techniques.
Presently, there are many inefficient technical solutions to the spam problem, such as simplistic filtering, port 25 blocks, challenge-response systems, blacklisting, and fee-based proposals. By end of next year, almost everyone will have some sort of spam and virus filtering protection for their central mail servers and for their e-mail clients. The technology of filtering protection is evolving, and filtering optimization will become a significant undertaking in 2004. The challenge, especially for businesses and public agencies, is to drastically reduce the amount of spam while still allowing wanted messages through. Two filtering techniques that look promising, effective and reliable are Bayesian filters and signature identification. Identification by signature is probably the safest way to identify spam, as the risk for false positives is almost non-existent. Self-learning Bayesian filters work best on an individual level.
As spam will still flourish in 2004, so will a variety of anti-spam solutions. Marketers will unfortunately face blacklisting and other anti-spam measures with their legitimate e-mail marketing campaigns. Therefore, deliverability considerations of e-mail campaigns and good ISP relations will be important to avoid this problem.
2. Impacts of the new legislation
The EU countries that did not manage to meet the transposition deadline of the EU directive 2002/58/EC, also called the opt-in directive, will do so in 2004, making the EU the largest opt-in zone in the world. From that point, the focus will shift from implementation to effective enforcement.
The immediate goal of 2002/58/EC is to cause the decline of spam originating from Europe. This will be accomplished by requiring commercial e-mail to be sent opt-in and by prosecuting European spammers. A long-term goal of the EU's opt-in stance should be to champion the gradual adoption of opt-in legislation in the rest of the world.
We are expecting to see litigation and penalties for spammers as spam becomes illegal in 2004. The opt-in rules are new and only apply within the EU, so they will have a marginal impact on our inboxes as the huge majority of spam originates from the United States. The newest U.S. Can-Spam legislation will have a minor impact on spam because it fails to incorporate any opt-in requirements. U.S. companies will continue to send unsolicited commercial e-mail as long as the recipient does not opt-out. On the bright side, there are many benefits of Can-Spam, including making people aware of the spam problem, forming a federal law instead of varying state laws, and a built-in mechanism for improving the law. The FTC will study and report on the effectiveness and enforcement of the law, as well as provide recommendations on improvements within 24 months.
3. Improved e-mail marketing standards
The need for education will remain strong in Europe throughout 2004. A recent UK Institute of Directors survey showed that more than a third of all UK businesses are unaware of the new legislation. In this matter the UK is by no means unique. The situation is likely to be similar in the other EU member states and especially in those countries that failed to implement the EC directive in time in their national legislation.
Eventually, knowledge of the new codes of conduct will increase and marketers will focus on delivering concrete value for each opt-in recipient. E-mail marketing's role as a part of the marketing mix of established companies will become stronger in 2004. E-mail marketing will also get a larger share of the total online marketing budget.
When the best practices are followed, the response rates and results for permission-based and relevant e-mail campaigns will continue to be good in 2004 despite the spam flow.
1. Build e-mail lists in-house
Build your list internally, even if it takes time, so that the quality of your recipient list remains high. You will own and control the permission and list usage. You can apply online and offline activities to attract subscriptions.
2. Ask for permission, use double opt-in
Always follow the golden rule of opt-in, even in B2B e-mail marketing. When e-mail messages are wanted and expected, the response and results will be better.
3. Provide relevancy and value in every message
The e-mail message content itself is the most important factor for the continued success of e-mail marketing. The key is to prove value to recipients in every distribution. When messages are wanted, relevant and interesting, the attention amongst recipients will remain high. Therefore you should plan and test your e-mail marketing campaigns carefully before they are executed. Measuring and evaluation afterwards will allow you to improve future campaigns.
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