Exploring the Benefits of Opt-in Mailing Lists

14 March 2000
While a few politicians and like-minded cronies have been busily working to slow down online gambling's growth; you're working even harder to encourage visits by eager cyber bettors. Attracting new customers can be tricky. After all, there are more than 750 gaming sites barraging their message across the Web, in print advertisements, and even on billboards, all in hopes of attracting those same customers you want. Is it a war? Not quite, but it can be a battle to win over new customers while maintaining your current clientele. As always, IGN is looking for ways to help you win at least a few skirmishes in the battle for success.

In this article, we're going to review one of the most common and successful Internet marketing tools available. A handful of effective methods are available, but today's weapon of choice is the opt-in mailing list

What are opt-in mailing lists, anyway?

Opt-in mailing lists, also known as "permission marketing," consist of email recipients who have explicitly agreed to receive your information. Site operators can use the names they've collected from their customers or purchase a list from an outside source. The important thing to remember is that all recipients have given their permission for information to be sent to them.

"Opt-in lists are not spam, " explained David Garthe, vice president of client services for the River City Group. "They are, in fact, quite powerful marketing tools--much more powerful than a banner ad."

Garthe added, "You are targeting those people who are interested in your product and who are not angered by receiving information in their mail. I don't really recommend that people buy lists, but that they sponsor newsletters, like VirtualVegas.com. They are often sold out for months in advance, but it works."

Garthe points out, however, that using opt-in mailing lists does have its drawbacks. "Sending out just your email to an opt-in email list is often seen as spam," he explained. "That's why newsletter sponsorship is so powerful. It appears as if the newsletter owner, VirtualVegas.com, is recommending you to everyone--kind of like a celebrity endorsement."

In fact, the River City Group uses its own targeted newsletter to keep existing and potential clients updated about marketing services and advertising opportunities. The newsletter launched late last year and has proven to be an instant hit, with a 25 percent increase in new recipients during the last two months, said Garthe.

One Internet marketing company, WSi Interactive, (www.ws-i.com) recently launched a new proprietary opt-in and e-direct marketing tool called TargetPacks, which compiles email lists from subscribers who have either requested information on a particular topic or who have simply agreed to receive email on it.

"Opt-in emailing is gaining exposure to some degree," explained WSi's Craig Hartman, "because of the higher-than-average response rates. Traditional mailing brings a response rate of around two to three percent, Internet marketing in the form of opt-in email promotion brings a response closer to 18 percent.

"The reason is simply that the opt-in email promotion begins with a more qualified list of prospects," he added. "The other major benefit to this marketing method is that vast amounts of people may be contacted - up to 100,000 - instantaneously and cost-effectively."

Virtual Vegas has an opt-in mailing list reaching 1.3 million people, according to David Herschman, company president. Virtual Vegas is one of the more effective newsletters targeting online gaming clients.

Herschman says his company sends out around eight topically categorized emails every month. "There are three things we do to make it special," he said.

Herschman outlined them:

  • Virtual Vegas employs three people whose primary job is creating the newsletter, writing the text and making graphics.
  • They have a dedicated high capacity $25,000 server--plus proprietary newsletter sending software--used to send the emails.
  • They rewards to people for reading the newsletter in the form of 'tokens' which people use to redeem for prizes.

Herschman concluded, "As a result, we have a very low unsubscribe rate of about three percent of our list per month. The price on the newsletter, I believe, is $50 cpm (cost per thousand)."

By offering a high quality newsletter that gives readers an extra for receiving and using it, Virtual Vegas can send up to 75,000 unique clicks to a casino over a weekend.

Despite the success of email marketing programs, they are not without their detractors. Joel Lesser of AnteUp Gambling Links explains, "History shows most people hate receiving solicited email, even if they signed up for it."

Instead, Lesser suggests using reciprocal links within your niche or genre. "They cost nothing, and the more links a site has linking to it from high quality sites, the more traffic, simple math," he said.

Lesser says AnteUp has attempted email-marketing programs before with little success. "We tried it a couple of times, but it doesn't work very well because people get tired of 'spam' even if they have opted in," he explained. He maintains that success on the Net relies on "a quality website product, excellent content, a powerful domain name and honest and fair business practices ... especially in this industry."

He also pointed out that AnteUp's ISP has strict rules against email marketing and that it only takes one complaint (solicited or unsolicited) to shut a site down. "The little revenue we can generate from an email marketing program isn't worth the substantial risk of getting shut down," he said. "Some ISP's are more relaxed when it comes to email marketing, but ours is very strict and for good reason. Some big ISPs will shut you down if you market your website with email."

Regardless of whether you agree with Lesser's marketing philosophy, his advice in this case should be followed. Be sure to consult your ISP's terms of service before embarking on any email marketing programs.

Lesser makes some very good points, but the numbers don't lie. According to a new report from Forrester Research, "The Email Marketing Dialogue," email marketing programs are an important ingredient in your marketing mix. In fact, their research showed email is "the second most effective technique for driving traffic to a Web site." It's so successful that the marketers interviewed plan on tripling their email spending by 2004.

Among Forrester's findings:

  • Retention email generates 10 percent click-through rates.
  • Marketers rank the three most important elements for a successful email campaign as 1) list quality, 2) offer and 3) creativity. In fact, one marketer told them:
    People say that HTML will give you a two- to threefold improvement, which is massive. But what's going to move it is the offer. We want people to be amazed by an offer and then forward it, creating viral marketing energy.
  • Marketers will combat decreasing response rates with personalization.
  • Email economics tilt marketing toward retention, because
    • Acquiring customers is expensive,
    • Email lowers cultivation costs,
    • and makes retention marketing more affordable.

"In the future, when people get a lot more email, the difference will be offering value," according to one marketer Forrester interviewed. "Customization is a way to do that better -- you have to offer people something they want to receive."

Using good tools well will lead to success

Beyond the obvious, email marketing can provide some hidden benefits. One email outsourcing company told Forrester that nearly 30 percent of customer responses contain questions, suggestions, or complaints unrelated to the original marketing message.

It might not be the response you're looking for, but it's a sure sign that your email has generated a response. Of course, you'd rather get the clicks on your site. So, if you haven't used opt-in mailings, maybe it's time to try spreading the word about your site by using one.

Vicky Nolan joined the IGN staff in October 1999. She's best known for inventing fire, the wheel and swiss cheese. She can be reached at vicky@igamingnews.com.