Face the truth: It's time to charge for email

In 1968, Garrett Hardin wrote an article called "The Tragedy of the Commons." Hardin argued assets that are shared in common, the individual benefit of utilizing that asset always outweighs the more remote, long-term harm in destroying the asset as a whole. As an example, Hardin wrote about an agrarian community that shared a field for grazing livestock. He could just as well have been talking about email.

Spam is out of control. Three-fourths of email is useless. Consumers are pulling their hair out, ISPs are choking, companies are wasting dollars on software and bandwidth, and marketers wonder why email response rates are dismal. The reason: The cost of using the asset is zero, and individual benefits seem to outweigh the incremental destruction to the asset as a whole. Call it "The Tragedy of Email."

The CAN-SPAM Act won't fix things. Reducing spam is not about outlawing deceptive subject lines and false headers, proper labelling of emails, and better opt-out instructions. Such policies will hardly deter unscrupulous, sophisticated marketers. The Act also puts the burden of cost completely on the receivers of email -- ISPs, corporations, and all of us, in the form of our tax dollars to government agencies.

Instead, to fix email, we have to think like economists. Forrester is calling for the industry -- companies and regulators -- to create a system for charging for email. Heresy, you say? Hardly. Putting an economic cost on the use of the asset is the only way to preserve the system. Email spam will decline (as it has already in Korea with such a fee system), ISPs will get some cost relief, email marketers will get smarter, and companies will save some money (see the figure).

Implementation won't be quick or easy, but it is feasible. We advocate the formation of a member-owned entity -- akin to Visa in the payment space -- to handle tracking and billing. A cost of as little as one-quarter of $0.01 per message, along with an identity validation system, would discourage most batch 'n' blast emailers. Given the huge public cost, it's time we all realized that email is not -- and should not be -- free.

Marketing to a diverse America? One size doesn't fit all.

In Jed Kolko's recently published report about marketing to minorities, we examine how America's ethnic groups purchase devices, consume media, and respond to marketing. The insights are fascinating. Two examples: 1) Income doesn't always determine device ownership. In spite of lower incomes, Blacks are more likely to own home security devices and Hispanics are more likely to own DVD players and game consoles. 2) When shopping for technology, personal interactions matter most for Blacks, past experience with a brand most influences Asians, and Hispanics are big fans of comparison-shopping Web sites.

Marketing execs may also be surprised to find out who's tuning into -- and out of -- TV, print, and Internet ads. Blacks are almost twice as likely as Whites and Hispanics to find TV, billboard, and magazine ads entertaining and trustworthy. Fifty-four percent of Blacks and 42% of Hispanics say that they watch TV ads, compared with only 32% of Whites. If you want custom cuts of this data for your company or brand, please let me know.

As we wind up 2003, let me thank all of you for your interest in our research. I'm looking forward to an exciting 2004, as consumer devices like PVRs, portable players, and mobile phones continue to gain adoption and create new opportunities for advertisers and content companies.

Best wishes for a pleasant and peaceful holiday season.


Chris Charron
Devices, Media, & Marketing Group Director

P.S. If you'd like to suggest research for us to write, or if there are data points you are looking to track down, feel free to drop me a line anytime at chrischarron@forrester.com.

Research Referenced In This Issue If you printed this email, get links to the research featured in this week's issue by going to www.forrester.com/go and entering the five-digit number of the report you'd like to read. 2005: Europe's Online Display Ads Top €1 Billion (33206) Market Landscape: Consumer Marketing Platforms (33339) Media & Marketing December 2003 Data Overview: Marketing To America's Ethnic Minorities (32910) Scorecard Summary: DoubleClick's Ensemble 6.5 (32992) Scorecard Summary: E.piphany's E.6 (32993) Scorecard Summary: Teradata's CRM 5.0 (32994) Scorecard Summary: Unica's Affinium (33006) The Digital Music Consumer: 2003 (33251) The Real Answer To The Spam Problem (33324) The State Of Mobile Adoption: 2003 (33346)

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