E-Mail Appender Enters Change-of-Address Market

TowerData, a New York-based firm best known for its e-mail append
service, is branching out by launching an e-mail change of address (ECOA)
service dubbed “E-mail Update”.

With the move, TowerData, until recently known as Eppend Inc., joins the
small list of players in the space, such as Return Path and FreshAddress.
ECOA services are aimed at helping marketers overcome one of
the more frustrating aspects of e-mail marketing — undeliverable e-mail
addresses.

A study by NFO Worldgroup, which was commissioned by Return Path, found
that 32 percent of e-mail users change addresses every year.

“E-mail Update” requires marketers to send TowerData a list of their
undeliverable e-mail addresses, which the company then compares with a list
of changes compiled via its network of more than 20 Web sites. The company
says only the addresses of people who have agreed to receive messages from
third-party marketers are included in the comparison. When matches are
found, a message is sent to the new address, asking the recipient if it’s OK
to provide the new address to its client.

The methodology — which TowerData is trying to patent — differs from
other players, which instead request that Internet users go to a central
site to update their addresses.

“It takes a lot of money and a lot of effort to get people to go to a
central place,” says Tom Burke, president of TowerData. “We’ve been able to
get a lot more data more quickly. We’ve done a couple of beta customers so
far and we’re having a match rate of about 5 percent.”

E-mail change of address services, along with TowerData’s other line of
business called e-mail append, are not without controversy. Although
companies using these services have an existing relationship with the person
for whom they’re seeking current e-mail addresses, the individual hasn’t
specifically given that company authorization to use that e-mail address for
marketing.

TowerData argues that the e-mail addresses it appends and updates are those of people who have agreed to receive messages from third parties, so it doesn’t matter who the messages are from. Additionally, the recipients are given a chance to opt out.

The practices, however controversial, are becoming more popular, as more traditional
marketers — which already possess vast databases — migrate their direct
marketing practices online. The tough economic climate, in which businesses
are struggling to hang on to and strengthen relationships with existing
customers, adds to the interest in such services. Getting these e-mail
addresses, after all, allows marketers to reach people who have already
expressed an interest in their products, which, presumably, would result in
a better conversion rate.

“Given the current market climate it is necessary now more than ever for
e-mail marketers to stay in touch with their customers and cultivate
accurate customer lists that provide greater reach and increased ROI,” said
Burke.

Return Path, with investors such as online advertising giant DoubleClick
and clients that include the United States Postal Service, is seen as the
leader in the ECOA space. For rival TowerData, this represents the first of
the new lines of business it intends to develop. The company changed its
name from Eppend Inc. at the beginning of the year, in an effort to reflect
its expansion plans.

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