Marketing’s Weekly Dose of the Truth

Ken Magill

About Us

Amazon Launches Stunningly Cheap Email Service

1/25/11

By Ken Magill

Amazon.com sent a ripple through the email-service-provider sector today by announcing it has launched a bulk and transactional commercial email-sending service and is charging an astoundingly low cost-per-thousand emails sent: 10 cents.

A 10-cent CPM is unheard of in email transmission services. Top-tier email service providers catering to medium- to large-sized enterprises generally charge in the $3 to $4 range.

For another comparison, Vertical Response—a service provider aimed at small businesses—charges $7.50 per thousand for mailing to lists of from 100,001 to 500,000 addresses, the firm’s lowest published price.

Dubbed Amazon Simple Email Service, the new offering is for “any business or developer that needs a reliable, scalable, and inexpensive way to deliver email—without having to build their own solution or license, install, and operate third-party software,” the company said in its frequently asked questions.

The news has many in the permission-based bulk email industry scratching their heads over its low CPM, but none wanted to go on the record to talk about it.

Some are speculating the service is a way for Amazon to take advantage of its bulk and transactional email expertise while making use of some excess server space.

“It’s probably a way to keep the lights on somewhere,” said one executive.

Of course, email service providers small and large offer much more than just message transmission, such as templates, easy-to-use campaign management and reporting tools, and marketing and technical expertise.

It doesn’t seem that Amazon offers click-through tracking and reporting. “There’s a lot that it doesn’t offer,” said one executive from a top-tier email service provider.

So how much of a threat Amazon Simple Email Service poses to ESPs is unclear.

Amazon claims its infrastructure, scalability and experience are an advantage.

“Building large-scale email solutions to send marketing and transactional messages is often a complex and costly challenge for businesses,” the company said in its announcement. “To optimize the percentage of emails that are successfully delivered, businesses must deal with hassles such as email server management, network configuration, and meeting rigorous Internet Service Provider (ISP) standards for email content. Additionally, many third-party email solutions require contract and price negotiations, as well as significant up-front costs.

“Amazon SES eliminates these challenges and enables businesses to benefit from the years of experience and sophisticated email infrastructure Amazon.com has built to serve its own large-scale customer base.”

Comments

Show: Newest | Oldest

Post a Comment
Your Name:
Subject:
Comments:
Verification:
Please type the letters in the image above

Terms: Feel free to be as big a jerk as you want, but don't attack anyone other than me personally. And don't criticize people or companies other than me anonymously. Got something crappy to say? Say it under your real name. Anonymous potshots and personal attacks aimed at me, however, are fine.

Posted by: Ruth Stevens
Date: 2011-01-25 17:35:13
Subject: versus Google?

This sounds more like a move that we'd expect from Google. I wonder if Amazon is planning other marketing services offerings.

Xverify