Confusion Reigns as Permission-Based Email Marketers Comply with Some Requirements of CAN-SPAM Law but Not Others, EmailLabs Benchmark Audit Reveals.

Business Editors/High-Tech Writers

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Jan. 27, 2004

Informal Survey of 100 Major Email Marketers Shows Administrative Complexities Slowing Compliance as Legitimate Marketers Weigh New Best

Practices

In the wake of the new federal CAN-SPAM law, EmailLabs, a leading provider of email marketing automation solutions, today reported that a majority of permission marketers are exceeding most requirements of the Act, but remain confused over administrative aspects of the law.

In a new benchmark audit of 100+ major email marketers, 95 percent include an unsubscribe process, as mandated by the law. At the same time, just 56 percent were in compliance with one of the simplest aspects of CAN-SPAM -- the new requirement to add a postal mailing address. The informal survey will be replicated later in Q1, to determine changes in compliance patterns.

"The bare majority complying with the postal address requirement appears to indicate that many legitimate email marketers are confused by CAN-SPAM, don't understand the requirement and/or simply haven't gotten around to it," said Loren McDonald, Vice President of Marketing, EmailLabs. "Most major permission-based email marketers do already adhere to best practices, and have long been doing what the law now requires, but many are clearly confused by the nuances and gray areas of the law.

"From a broader perspective, one potential benefit of CAN-SPAM and the intense focus on unsolicited email is that 'unintentional spammers' -- those legitimate companies who have not followed email marketing best practices -- may begin adopting permission practices and go well beyond just complying with CAN-SPAM," McDonald said. "Even if the Act doesn't stop fraudulent and annoying spam, it may raise the standards of what is considered good permission email practices."

The federal CAN-SPAM law took effect on January 1, and is intended to curb the proliferation of unsolicited emails. CAN-SPAM contains requirements that must be met by all mailers whether an email message is unsolicited or permission based. Companies sending unsolicited emails must include a clear notice that the message being sent is an advertisement or solicitation, among other requirements.

Conducted from Jan. 1-Jan. 15, the EmailLabs audit evaluated 104 emails from some of the nation's largest online retailers, media and publishing companies, along with Fortune 500 enterprises. Fifty-seven percent of the sample consisted of newsletters and 29 percent of appeals from online retailers; another 18 percent of emails were classified as "corporate" in nature. Emails were obtained randomly from employees who had opted-in to receive these emails.

In terms of strict CAN-SPAM compliance, 56 percent of the sample included postal addresses and more than 95 percent provided an unsubscribe mechanism. None of the emails reviewed appeared to contain misleading subject lines or other fraudulent practices employed by spammers. Among the multiple methods to unsubscribe, 87 percent offered a link, 22 percent an email reply and 11 percent notification by phone or mail.

Although not mandated by CAN-SPAM, 54 percent enabled recipients to update their preferences, 40 percent each explained why the email was received and supplied complete contact information (address, phone, email), and 37.5 percent referenced a privacy policy.

The EmailLabs audit is not intended to represent a statistically valid sample of all permission-based emails sent in the U.S., but is instead an analysis of a random sample of opt-in emails to which consumers and businesspeople might subscribe.

The audit of permission emails is in sharp contrast to other findings on initial CAN-SPAM compliance of unsolicited commercial email. Email security firm MX Logic found that among a random sample of more than 1,000 unsolicited commercial emails received during the first week of the year, just three complied with the CAN-SPAM law. Audiotrieve, a Boxborough, Mass. maker of anti-spam filtering tools, found in its recent analysis of 1,000 "junk" emails that only 102 met all the CAN-SPAM Act requirements.

EmailLabs Offers Compliance Assistance

"CAN-SPAM -- and the surrounding buzz around permission email marketing -- has clearly helped distinguish the difference between trusted/legitimate permission emails, emails that are not fraudulent but are unsolicited or sent by companies with poor permission practices, and plainly fraudulent, pornographic or offensive unsolicited spam emails," McDonald said.

To help ensure that clients are in compliance with the law, EmailLabs has added a new Mailing Address Footer feature to its core hosted software. The mailing address footer is automatically included at the bottom of all email messages sent to any of the customer's mailing lists. The EmailLabs application already enables compliance with many of the Act's other requirements, including ensuring that the unsubscribe mechanism adheres precisely to a recipient's subscription preferences. The company has also made available a CAN-SPAM legal brief from the law firm of Dow, Lohnes & Alberston PLLC, at http://www.emaillabs.com/resources_tools.html.

"Unsolicited email has been legalized by CAN-SPAM, and regardless of whether the law increases or decreases spam, for legitimate email marketers there is only one choice -- taking the permission high road," said McDonald. "Doing anything else will damage your brand and bottom line."

About EmailLabs

EmailLabs is a leading provider of advanced email technology solutions to agencies, publishers and marketing, sales and customer service departments of middle-market and Global 2000 companies. The EmailLabs email-marketing platform is provided as an ASP (Web-based) service, and is easily customized and integrated with a company's Web site, sales force automation and CRM technologies. The company provides email-marketing solutions to more than 275 companies, including Nokia, Agilent, AON, Jupitermedia and Silicon Valley Bank. Headquartered in Redwood City, Calif., EmailLabs is a service of Uptilt, Inc. Uptilt is privately held and profitable. For more information, visit www.EmailLabs.com.