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October 19, 2005
Pay for Delivery ...
I've been watching the efforts of several firms and industry groups as they attempt to build up the infrastructure around email. Of particular interest is the "pay for delivery" idea. Simply stated, you pay a third party or an ISP some premium fee and, voila! Your messages are guaranteed to get to the inbox. Bill Gates was a huge proponent of this idea (see this article) 21 months ago. Unfortunately his prediction that it would cure spam in two years seems pretty unlikely at this point.
One of the most visible and active players in the pay-for-delivery space is GoodMail. The company recently raised an impressive round of funding, which means that some smart people are taking the idea seriously. GoodMail has been working with several ISPs, and apparently will be able to offer its service commercially in the not-too-distant future. I look forward to sitting down with members of the company and learning more about its specific offering. (My colleagues have spoken to them but I've not yet had a chance.) Some of my questions would be:
- How much would marketers be willing to pay? For advertisements and promotions, I suspect the answer is zero. However, for e-bills and critical notices, I suspect it will be more. The real question is, how much more over its base delivery fees? I don't think GoodMail has pinned down its pricing, but I've heard discussions that it could be as much as 3-4 times a base delivery fee. This seems like a tough sell to me so I suspect it will come in lower.
- At what point would it be cheaper for, say a bank, to take its bounced or blocked messages and just resend them as postcards or direct mail? If a good mailer is sending transactional-type messages, getting 95-percent delivery isn't a stretch. Assuming many of the remaining 5 percent are due to inevitable email address changes (which GoodMail can't help), then you end up talking about a relatively small number of undeliverables.
- What's the ROI on the "insurance" or assurance that messages will get through? I think this is the real question. It's probably worth more money than pure-delivery improvements if marketers can just know, for sure, that their messages will be delivered. When someone comes up with an ROI model for this, I'd love to see it.
I expect some of our clients will want to give GoodMail a test drive in the next year or so. Hopefully, I'll have more to report on in the future.
Posted by Bill Nussey at October 19, 2005 08:28 AM
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