Is The New Outlook a Threat to E-Mail Marketers?

When Microsoft releases the Office 11 suite in mid-2003, the company has said users can expect a variety of improvements to its popular Outlook e-mail application, including more protections against the growing menace of spam. But while e-mail users celebrate a new weapon to fight unwanted e-mail, legitimate e-mail marketers might lose out.

According to news reports, Outlook 11, which was released in beta in early October, has changed its approach to HTML e-mail. In Outlook’s default mode, it will only grab HTML from outside servers when mail is opened, instead of in the preview pane.

This feature is intended to squelch a popular method used by spammers to verify Web addresses. But by doing so, Microsoft could throw e-mail marketers a curve, driving down reported open rates by eliminating HTML viewings in the preview pane for most users. Outlook users could change the setting in their security preferences, but, by default, viewing something in the preview pane won’t register as an “open”.

“I think the biggest [concern] is that e-mail marketing is just now becoming mature in the way that online advertising is mature and the way we analyze the results,” said Eric Picard, co-founder and director of product management at Bluestreak, an online marketing company. “Much of that includes the ability to monitor open rates.”

As part of Microsoft’s ubiquitous Office suite, Outlook is by far the most popular e-mail program around. In May, Microsoft reported that Office XP garnered 60 million users in its first year.

Microsoft officials declined to outline the company’s plans for Outlook 11.

Jared Blank, an analyst with Jupiter Research (which is a division of parent company Jupitermedia), said eliminating preview-pane opens would benefit advertisers, which were paying for dubiously high open rates.

“I think the numbers have been artificially high because of Outlook,” he said. “I think this will make things better.”

E-mail, along with paid search, remains a bright spot in the sluggish online advertising industry. Jupiter Research predicts the e-mail marketing sector will grow from $1.4 billion in 2002 to $8.3 billion in 2007.

However, along with the growth in targeted e-mail marketing has come an explosion of unwanted e-mail messages. Jupiter predicts the average e-mail user will receive nearly 4,000 spam messages by 2007.

With spam rankling consumers, companies have rushed to attack spam. In one instance, Microsoft inked a deal with Brightmail in September to give users of Hotmail relief from the deluge of spam.

Open rates have remained an important metric in judging the success of an e-mail campaign in cutting through the clutter, according to Gary Black, Doubleclick’s director of product management in its e-mail unit. However, advertisers have begun to favor other metrics, such as message forwarding, click-throughs, and purchases.

Other than lowering open rates, said Black, eliminating preview-pane opens could have another, potentially worse, consequence.

“That technique can be used to determine whether to send a person a text or HTML message,” he explained. “If you see they opened the HTML message, then you know what to send them.”

“The recipient might end up getting a text message even though they could view HTML,” Black said.

HTML e-mail has grown in importance to e-mail marketers, boasting a 2-3 percent better response rate, according to Black. Jupiter Research predicts that next year HTML and rich media e-mail marketing will surpass text messages for the first time. By 2007, HTML will make up 59 percent of e-mail marketing, with rich media occupying an extra 15 percent.

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