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Shocker: FreshAddress Goes Opt-In

1/31/12

By Ken Magill

In a significant about face, email append firm FreshAddress has switched its business model to opt-in based—or at least as opt-in based as its executives believe it can go and remain a viable company.

The move comes amid an increasing amount of scrutiny the practice of email-appending has been under in recent months.

Email appending—where a marketer gives a data vendor a postal list to which the data vendor matches as many email addresses to postal records as possible and charges a fee for each one—has always been controversial.

The Messaging Anti-Abuse Working Group officially condemned the practice in September.

“The practice of email appending is in direct violation of core MAAWG values,” the group of email service providers and ISPs said in a statement.

What is more, last week email service provider Experian CheetahMail, a long-time proponent of appending, renounced the practice. Experian CheetahMail is a MAAWG member.

However, it should be noted that in announcing CheetahMail’s policy shift in a blog post, Experian CheetahMail privacy and compliance leader Ben Isaacson used the term “opt-out appending,” leading some in email marketing circles to believe he left the firm some wiggle room.

“I can appreciate that many marketers have had success with email appending efforts, however, the opt-out appending process should be discontinued for the betterment of the entire email marketing community,” wrote Isaacson.

His wording begged the question: Well, what would opt-in appending look like?

Typically, email appending involves either the vendor or the client sending the matched addresses permission messages saying something along the lines of: “You are a customer of so-and-so and they want to add you to their email list. If you don’t want to hear from them, opt out.”

Then the marketer begins sending messages to all those who took did not opt out. Among the many problems with this practice is the addresses that showed no action could be old, abandoned addresses that have been turned into spam traps.

Moreover, as ISPs reportedly increasingly use engagement metrics, such as opens and clicks, to determine whether email is wanted by would-be recipients, sending email to inactive addresses becomes an increasingly risky proposition.

As a result, FreshAddress—one of the more well-known email appending firms—has switched its introductory messages to would-be appendees to opt-in based, according to Austin Bliss, president and co-founder of the company.

“We saw a lot of drama over opt-in versus opt-out, particularly in 2011,” said Bliss. “And we made a corporate decision that in 2012 we were going to switch to an opt-in model.”

Messages from FreshAddress to appended addresses starting two weeks ago and going forward say something along the lines of: “You are a customer of so-and-so and they want to add you to their email list. If you want to hear from them, click here to opt in.”

“We’re actively asking people to raise their hands and say: ‘Yes, I want to have an email relationship,’” said Bliss.

Significantly, however, FreshAddress’s clients will still receive all the addresses FreshAddress identified as that of their postal customers—those who opted out, those who did nothing and those who opted in, according to Bliss.

Then FreshAddress will consult with its clients on what to do with each group, he said.

By sending opt-in permission messages and segmenting the responders, Bliss said, FreshAddress is combating an industry perception that appended addresses don’t perform.

“This is helping identify the portion of the results that will really perform,” he said. “They’re the hand raisers.”

Also, unlike other appending firms, FreshAddress requires its clients to supply postal addresses of customers who have been active within at least the past 24 months, said Bliss.

“That’s by contract and it’s much stricter than anyone else,” he said.

He added that FreshAddress’s database of 835 million email addresses is permission based.

“These addresses aren’t scraped off the Internet. … So when we match an address, these are your customers who have raised their hands and said: ‘Yes, we want third party offers,’” said Bliss. “They checked a box that said: ‘Yes, and I want to hear from other people.’”

Previously, FreshAddress’s executives believed those safeguards were enough to justify sending opt-out based permission messages.

“Now, we’re flipping that,” said Bliss. “All of the messages we send are 100 percent opt in.”

Under current plans, FreshAddress will send one permission message to would-be appendees on clients’ behalves.

“Then we’ll have three buckets,” said Bliss. “We’ll have the recipients who said: ‘I don’t want to waste another second. I want in.’ We’ll have this bucket in the middle of people who took no action, and we’ll have this bucket on the side of people who actively opted out.

“We’re going to return all three of those buckets to our clients, because our clients are in the best position to send that second message or whatever they want to do with that no-action bucket,” said Bliss. “And our client is in the best position to immediately monetize those who opted in.”

He added: “What a lot of our customers will do is take that no-action list and they’re going to continue to hit it with maybe a second or third opt-in message.”

Bliss conceded that some email experts will be critical of FreshAddress delivering the non-responders to clients.

But, he said: “We have to do that. Otherwise we couldn’t compete in this business. All of our competitors are handing over those addresses. What we’re doing is handing them over to our clients and saying: ‘These people took no action. This is our recommendation about what you do about that.’

“This concept [held by some in the industry] that if they didn’t take an action, I can never ask them another thing is a little extreme,” Bliss said. “It is totally legal to mail these people. They’re customers, and they’re customers within the last 24 months. It’s perfectly acceptable to mail them and say: ‘Hey, did you miss it [the first permission message]?’”

When asked if he was concerned about Canada’s new permission-based anti-spam law scheduled to go into effect sometime this year, Bliss said FreshAddress doesn’t offer appending outside the U.S.

“That’s not what keeps me up at night,” he said.

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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: Tim Roe
Date: 2012-02-01 07:36:52
Subject: Quality not Quantity

At least this is an attempt to clean up the email append process. The sad fact is that this is ultimately driven by money and admitting that delivering the non responders to clients is driven by competitive pressures is the heart of the matter. Let’s face it, if a clients primary focus was response, they would only be interested in paying for emails that had responded, not those that didn’t. But I guess in many instances, response isn’t the KPI that really floats the boat, it’s the volume of emails appended to the database that matters, regardless of whether they want to be there, or if they ever respond to email. I’ve seen too many append projects deliver poor response to be a fan of the process and while it remains a quantity over quality business model, commoditisation will prevail.
Posted by: James Hoddinott
Date: 2012-02-01 03:54:36
Subject: Ticked off?

Given how many sites operate, it is more likely that most of those millions of customers have actually *failed* to raise their hands and untick the third party offers box - at some point in the life cycle there is still opt-out.
Posted by: Dave Smith
Date: 2012-01-31 19:17:18
Subject: Yes!...not

835 million email addresses that have clicked a box saying "Yes, we want 3rd party offers"....I think not.
Posted by: Al Iverson
Date: 2012-01-31 17:44:12
Subject: opt-out email append

Can't wait to see if somebody from Infogroup follows up with the same HERP DERP EVERYBODY ELSE IS DUMB, OPT-OUT IS GREAT that they did last time. The world, she is changing. Of course, the real proof here is in FreshAddress's execution. The quotes imply some potential ambiguity in whether or not this is truly an opt-in model. Time, and probably Spamhaus, will tell.
Posted by: Matt - @emailkarma
Date: 2012-01-31 17:00:23
Subject: CASL

Whether they offer appending outside the US or not is irrelevant to CASL, it's about the recipients location not the senders. Lots of Canadians are on US mailing lists where they have no idea of the recipients geo-location - I find it hard to believe that the 887 Million recipients in the match file doesn't contain at least a few Canadian recipients (maybe even some that have a US Winter residence, or have a US based friend that collect packages and forward them on - to take advantage of US only deals or free shipping in the US).

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