What’s another term for prospecting via e-mail? Spam.

That’s the opinion of Don Lange, senior vice-president of Toronto-based list manager and broker Cornerstone Group of Companies. And it’s why Cornerstone, which is planning on introducing its first e-mail lists shortly, has some strict rules about how the addresses will be used.

The company, which manages 500 lists of snail-mail addresses and boasts many of Canada’s magazine subscription lists, plans to use opt-in measures to determine whether someone will be part of a particular list. So, not only will magazine subscribers be asked whether it’s OK to send them e-mails about third-party products or services but, if they agree, they’ll be sent an e-mail from the magazine that will point them to a specific URL. In other words, subscribers won’t receive advertising messages from the third party directly. They’ll be given a choice whether to visit the advertiser’s site.

"It may be a tad anal, but it’s almost like asking someone permission anytime you want to send them some information," says Lange.

If it appears that Cornerstone is tiptoeing its way into e-mail marketing, that’s only because it recognizes just how little is known about the business. While it’s obvious the Internet is changing the rules of marketing, no one’s certain to what extent they apply to the list rental side of the business.

In fact, it may be too early to make any guesses, says Linda Trauzzi, president of Watts List Brokerage in Toronto.

"It’s so new," she says. She estimates that there are about 20 business-to-business e-mail lists available for rental in Canada and only five that target consumers. That means, she says, that the audiences may be too broad for any one marketing endeavour. For while it’s easy to compile a bunch of e-mail addresses, it’s not that simple to break them down into finely honed target audiences..

Trauzzi says she thinks the Web will be used, in the beginning, more as a customer service device than a prospecting tool. "There’s a lot of things that have to be worked out yet."

One of the main obtacles to the growth of e-mail lists is consumer concern over privacy. Maybe it’s the speed of transmission or the fact that the advertising message ends up on one’s computer, but there’s something about e-mail that seems, for many people, so much more personal than snail mail.

"You don’t have the buffer of a mailbox," says David Lefkowich, director of lists and database products for ICOM. "Consumers are uncomfortable with that."

The issue is being addressed, at this time, with opt-in and opt-out choices for consumers, but opinion is mixed when it comes to what is both effective and fair. While some list marketers think that a negative option – whereby consumers must say they don’t want to receive advertising e-mails – is sufficient to add an address to a list, others (such as Cornerstone) insist that only an opt-in choice translates into permission because it erases any ambiguity.

"Everyone has a different opinion," says Watts’ Trauzzi.

Another barrier to growth is the fact that it’s next to impossible to judge an e-mail list’s integrity.

"Because it’s new, there are not any metrics or frames of reference," says ICOM’s Lefkowich. While everyone can see the great potential in e-mail lists, it’s hard to judge just how solid is any individual list. With e-mail, there’s no way of knowing if standard direct mail response rates are sufficient to label the program a success.

"Right now, we have no clue if a two per cent response rate is profitable," says Lefkowich, adding that the industry doesn’t even know how to determine what equals a proper response in an online environment. Is it how many clicks a URL receives? Or is it whether the e-mail is even opened?

Then there’s the whole issue of merge/purge. While there are generally very few duplicates among residential addresses on a list, the same can’t be said for e-mail addresses. If you’ve ever tried to sign up for a Hotmail account, you’re probably aware that there are lots of other bobsmiths, shagadelichicks and burlymans out there. Each with a different profile. And before they can be segmented into their various target markets, says Lefkowich, a system will have to be developed that addresses the problem of duplication.

But it won’t be easy. Janine Vosseler, vice-president of 21st Century Marketing in Farmingdale, N.Y., says that right now, it’s virtually impossible to do merge/purge with e-mail lists.

"We’re working on rectifying it," she says. There are some cases where a postal address can be attached to e-mail, thus allowing the system to purge duplicates. But that applies mainly to business-to-business lists.

Right now, in the U.S., there are about 600 e-mail lists available, with new ones coming out every day, says Vosseler.

When compared to the 25,000 conventional mailing lists that are available for rent, it’s easy to see that e-mail lists lack the selection criteria many clients crave.

"You can’t drill down and have a great selection," she says.

While e-mail has a few advantages over postal mail as a direct marketing tool – such as speed and cost savings – Vosseler says its importance shouldn’t be over-estimated.

And, just as the Internet opens up the very possibility of e-mail lists, it also opens up the opportunity for more traditional direct mail.

"Fortunately, a lot of the Internet companies are using direct mail to get people to their Web site," says Vosseler, citing America Online and EarthLink as two marketers who are particularly enamoured of snail mail to drive their Web-based businesses.

That’s one reason Cathy Preston, managing partner of the Mosaic Group in Toronto, says those who predict the death of traditional direct mail are off base. Not only do dot-coms themselves provide a new client base for the industry, but the low cost and high speed of e-mail makes it an attractive option for clients that would never have dreamed of adding direct response marketing to their mix before.

While e-mail marketing has a lot going for it, it does lack the visual impact of a mail piece, says Preston, who is taking over as chair of the Canadian Marketing Association’s database and lists council in June.

"There’s going to have to be tremendous creativity," she says. "It’s a writer’s paradise."

Just the subject line alone needs impact – and that will make work for talented copywriters.

But there’s also a huge amount of talent needed on the list management side. And young database specialists are being courted by a wide range of companies that want to strengthen their e-mail marketing capabilities.

Since many U.S. dot-coms are adopting a direct marketing model for their business, they’re poaching talent directly from the list management firms, according to 21st Century’s Vosseler. This is the first time anything like this has ever happened, she says. These companies are rich with venture capital and are often willing to put up stock options and the like, she says. "We can’t compete with that kind of money."

Jay Aber, president of online database service bureau 24/7 Canada, just hired a list broker from Cornerstone and, earlier this year, hired the general manager of Canadian operations for Val-Pak as its Canadian director.

"What it says to me is that some of the smartest and most talented direct marketers in Canada are seeing electronic media as the growing place to be," he says. The whole issue of list burnout and clutter that goes hand-in-hand with postal mail databases isn’t an issue in such a new area.

"There are only 30 million Canadians – it’s kind of tough to keep finding fresh ways to get at them."

Online educational store SmarterKids.com has used both traditional and e-mail lists to get at its customers, according to Al Noyes, executive vice-president of sales and marketing for the Needham, Mass.-based company.

While e-mail lists, with their inability to do merge/purge, are certainly less targeted than conventional postal lists, he says their speed and cost make them attractive. But he doesn’t think marketers should use traditional direct mail to drive people to a company’s Web-based marketing messages.

"In any direct marketing effort, you want it to be super-easy and super-compelling to respond," he says. Using conventional mail to drive Web traffic is, in Noyes’ opinion, asking too much of a potential customer. Marketers can’t expect someone to read their mail, then sit down at their computer, log on, find the site, and so on. And there’s no guarantee that a prospect on a conventional mail list will even have access to the Internet, he adds.

"No matter how good quality your list, if they’re not an online shopper, it’s an uphill battle," he says.

The company has sent out five or six test runs of postcards, he says. But response to them hasn’t been as good as it has with the company’s many e-mail efforts, beginning about 18 months ago.

Noyes estimates that, in a peak month, SmarterKids sends out 15 to 20 million e-mail messages across North America. All of these are "double opt-in", with respondents initially signing up and then replying to a confirmation e-mail, he says. The response rates vary, depending on the offer, but Noyes says that, on average, 10% of prospects click on.

"And 10% of these curious surfers actually buy something," he adds.

Sidebar: What’s available now

They may not be as prevalent or as targeted as conventional mailing lists, but e-mail lists are becoming more widely available, as the following rundown of product would suggest.

Toronto-based Watts List Brokerage is managing or brokering more than 20 e-mail address lists. The majority are business-to-business files, but there are three consumer lists, including the 100,000-name Web3000 list.

Feature lists include "Midrange Professionals," numbering nearly 68,000 opt-in e-mail addresses. These are data management professionals in Canada involved in managing and operating IBM mid-range server systems. Selections include industry, province and job title.

The National Domain Register’s list contains more than 58,000 opt-in e-mail addresses. These are garnered from the information required by Internic, the international organization that registers domain names for the Internet.

Another comparatively sizable list is from Scott’s Directories. It numbers around 27,600 e-mail addresses, from a compiled file of companies and executives.

Additional lists include Associations in Canada (6,107 e-mail addresses), Financial Post 5000 (5,000 addresses) and a database of commissioned salespersons (5,869).

The largest list is the Web3000 standalone e-mail address file. Web3000 is the developer of the Netsonic Internet Accelerator, a Windows 95 application for Net surfers who want to reduce their wait time when logged on with 56K modems or slower. About 85% of the e-mail address owners are male and more than half have made a purchase on the Net.

Another is the 6,768-name "Parents" list. This is a list of parents with children currently attending a Canadian university. Parents have registered as members via a questionnaire used to match their children to the financial awards available.

They don’t have the field to themselves, of course. Cornerstone Group of Companies will be announcing its first e-mail lists very shortly.

"We are finalizing contracts with Internet service providers (ISPs) and list owners right now, and we’ll be making an announcement during the Canadian Marketing Association show," says senior vice-president Don Lange.

Joncas PostExperts in Montreal and JR Direct in Vancouver are among other companies who continue to offer traditional list management and brokerage services. – David Eggleston