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    Perl Archive : TLC : Business : When Spam Burns You: Why Bulk E-Mail is Bad Business
    Guide Search entire directory 

    Date Published: 2000-08-01

    Written by Linda Formichelli

    Erica Shames knew something was wrong when her latest advertising campaign resulted in ten new subscriptions for her regional lifestyle magazine, Susquehanna Life--and more than four hundred complaints.

    "As a one-person operation I'm always looking for cost-effective ways to increase my readership," Shames explains. "So I thought it was fortuitous when I received an e-mail from a company called IMC Marketing that said they could e-mail my ad to 250,000 people for only $ 199. I put together an ad and the company promised to send it out on the following Monday. I was so excited!"

    That Monday, the complaints started trickling in. "Some asked how I got their e-mail address. Others wrote nasty letters and reported me to the FCC, the state District Attorney and my Internet Service Provider, who gave me a big reprimand," says Shames. "I felt like a little kid getting slapped in the face and not understanding why. I had never heard of spam until people started reacting to my ad." (IMC Marketing declined to be interviewed for this article.)

    Spam is the popular term for unsolicited commercial e-mail that's sent in bulk. The name most likely comes from a Monty Python skit featuring a group of Vikings in a restaurant who repeatedly sing an annoying song consisting mostly of the word "spam." By the end of the skit the spam song, which started out as background noise, becomes so loud that it completely drowns out the other participants.

    Shames isn't the first small business owner to be burned by spam. Short on funds and looking for ways to stretch their advertising dollars, many small business owners are being duped by bulk e-mail companies into believing that spam is a low-cost, highly profitable and acceptable way to advertise their products and services.

    Myth #1: Bulk E-mail is Low Cost

    Well, it's not really a myth--bulk e-mail is incredibly inexpensive. It seems like a gift from the small business gods: Cash strapped entrepreneurs can send an e-mail ad to millions of potential prospects without buying an expensive direct-mail list and without the cost of printing, paper and stamps. But the reason e-mail mailing lists are so cheap--and the drawback for small business owners looking to reach a particular market--is that they're completely untargeted. Bulk e-mail companies use software to "harvest" the e-mail addresses of Internet users from personal Web pages, discussion forums and newsgroups--kind of like pulling random names from the phone book. No e-mail address is safe: Even non-U.S. e-mail addresses are harvested and sold on lists, as Erica Shames learned when recipients from as far away as France and Hong Kong asked to be removed from her mailing list.

    How would your customers like to receive a direct mail ad from you--postage due? Another reason that spam is so inexpensive is that it shifts the cost from the advertiser to the recipient. Some e-mail users pay for the time they spend downloading e-mail, which means they're paying for an ad they didn't ask for. And the bulk of spam is so great that $ 2 to $ 3 of every e-mail user's monthly bill goes to spam-fighting efforts and equipment upgrades by their Internet Service Providers.

    Myth #2: Bulk E-mail is Profitable

    "Earn Thousands!" trumpet the ads for bulk e-mail companies. That wasn't Erica Shames's experience. Out of the 250,000 people her message went to, Shames received only ten orders--a less-than-dismal .004% response rate. Since she paid $ 199 for her mailing list, it cost Shames $ 20 for each of the $ 15 subscription orders she received. "It could have cost her a lot more," says Kelly Thompson, founding member of the Forum for Responsible and Ethical E-mail (FREE), a spam prevention advocacy group. "If her Internet Service Provider had had a policy of not allowing spam from his system, as many ISPs do, she could have lost her e-mail connection and Web site. The $ 500 to $ 1,000 it costs to build a Web site is no small expense for a small business owner."

    Myth #3: Bulk E-mail is an Acceptable Way to Advertise

    That spam is acceptable is a myth propagated by late-night infomercials, traveling conferences and, yes--commercial e-mail. In a survey of 1,036 Web users by the San Jose, CA-based firm World Research, 43% say they hate spam and 25% say it bothers them. Only 7% claim they "love to get spam." Bigger companies know that bulk e-mail is a good way to trash their reputations, which is why you'll never get an unsolicited ad from IBM or Wal-Mart in your mailbox. "I'd never buy anything from a company that sends me spam," says Craig Maher, an illustrator in Poughkeepsie, NY whose AOL account gets four to five spam e-mails per day. "Most of the spam I get is for porn Web sites or pyramid schemes, so even if a spam is from a legitimate company, the negative association is there."

    You may think, "Even if only seven percent of Internet users 'love to get spam,' that's still a lot of potential customers," but take heed: Not only is spam annoying to the vast majority of your target audience--in some cases, it's illegal. "It's now illegal to send spam with forged sending information or a misleading subject line to Washington State residents," says Dan Zerkle, the legislative contact for FREE. (Even bulk e-mail companies know that spam is unacceptable, which is why they almost always falsify sending information so the e-mail can't be traced.) Similar laws that went into effect in California on January 1, 1999 require senders of bulk e-mail to include a valid e-mail address or toll-free number, and specifies damages of fifty dollars per message if you violate an ISP's acceptable use policy. A Nevada law lets residents sue spammers for $ 10 per unsolicited message. Such laws target not only the people who hit the SEND button, but also those who "cause the e-mail to be sent"--so you can be looking at a business-destroying lawsuit even if it's a bulk e-mail company that actually sends the message.

    The fact that spam shifts the cost of advertising from the sender to the recipient, wreaks havoc on Internet Service Providers and breaks several state laws is enough reason to reconsider using it. But for the small business owner, the most compelling fact is that the majority of Internet users--and your potential customers--loathe spam.

    "There are no spamming success stories," says Zerkle. "I've never heard of a legitimate small business that spammed more than once, because they find that the bad faith it creates is like a wrecking ball to their company." Asked if she has any advice for small business owners considering adding bulk e-mail to their marketing arsenal, Erica Shames has this to say: "Do not get involved in this at all."

    Sidebar: Free Alternatives to Bulk E-Mail

    Here are three free ways to get the word out about your business--without getting in trouble.

    Opt-In E-Mail Lists

    Opt-in e-mail lists include only those people who have specifically asked to receive information. You can create your own opt-in list by adding a section to your Web site asking interested visitors to leave their e-mail address. "You won't get into trouble with opt-in mail," says Dan Zerkle. "But you have to set it up so that people who opt in are sent a confirmation e-mail that they have to reply to. This ensures that the people who are on your list really asked to be there, and weren't put there by someone else."

    There are also services, such as Postmaster Direct (, that will send your ad to a list of people who have opted-in to your category of advertisement.

    Banner Exchange Programs

    You display a banner on your Web site that brings up an ad from other banner exchange members every time someone visits your site. A banner is a small, banner-shaped ad (hence the name) with graphics and a link to your site. For every two people that visit your Web site, your own banner will appear once on another member's site. Banner exchanges are a popular (and free) way to get the word out--Link Exchange, for example, has more than 250,000 participants. Some banner exchange programs cater to certain types of businesses or demographic markets, and some will design a banner for you gratis. For a list of banner exchange programs, visit


    A signature (or "sig") is like letterhead for your e-mail--a few lines at the end of your message that lists your business name, contact information and even a link to your site. This information automatically appears in every e-mail message you send out, so the visibility potential is great, especially if you participate in online discussion groups. Just be sure not to make the sig too long (four lines is considered the maximum). To find out how to create a signature for your e-mail, consult the manual for your e-mail software or browser.

    Sidebar: The Spam Scam: How It Works

    1. You get an e-mail message from a bulk e-mail company called ABC Bulk offering to send your ad to 250,000 people for only $ 195. How did they get your e-mail address? Spammers use special software to "harvest" random e-mail addresses from the Internet. The software follows links from page to page, recording every e-mail address it encounters. That's how the bulk e-mail company found you, and that's how they compiled the list they're trying to sell you.

    2. You send your ad to ABC Bulk. Now, even if you don't know it, ABC Bulk knows that spam elicits an angry response from a good percentage of the recipients, so of course they want to hide the origin of the mail. To do this, they forge a fake return address into the header. This address may be completely unreal, or it may belong to an innocent e-mail user. When someone complains to this address, the message will either bounce back to the complainer or flood, with hundreds of other complaints, into the mailbox of the poor innocent person whose e-mail address was forged into the header. If ABC Bulk ever has a beef with you, watch out! It could be your name that goes into the header of a spam.

    3. ABC Bulk includes "remove" instructions in every message that goes out. If anyone is upset about receiving the spam, all they have to do is send a message to the remove address asking to be removed--right? Wrong. ABC Bulk uses their "remove" address as an e-mail validation system. If someone sends a message to that address, ABC Bulk knows that person received and read the spam, and keeps him or her on their mailing list. After all, ABC Bulk only promised to get your message out to 250,000 people. They don't care who those people are or whether they want to receive your ad.

    4. Many Internet-savvy people now know to ignore forged addresses and to investigate the rest of the header to track down the spammer. To fool these people, ABC Bulk "bounces" your message off of an unrelated machine in a foreign country. Now it looks as if the ad originated from a university in Norway instead of a bulk e-mailer in New Jersey.

    5. Congratulations! Your message is now on its way to 250,000 random e-mail users all over the globe. In some European countries, people are paying by the minute to pick up and read an ad meant for U.S. citizens. In the U.S., people on business trips are dialing long-distance into their e-mail to receive your ad. A Norwegian university and an innocent e-mail user are being flooded with misdirected complaints. If you included your own e-mail Web site address in the message, you, too are receiving complaints--but not for long, because your Internet Service Provider will most likely disable your account. The winner? ABC Bulk, $ 195 richer.


    See the Inner Workings of a Spammer's Mind

    Do you hate paying for an e-mail account, only to watch your e-mail box fill up with unsolicited ads? Here's what spammers think of you. Warning--there's adult language in this reply to a spam complaint!

    Read More

    Read the article about spam I wrote for 1099 Magazine (formerly Aquent Magazine) in January 2000.

    Mad About Spam

    The Mad About Spam petition will be delivered to Congressman Gary Miller (R-CA) and Congressman Rush Holt (D-NJ) to help them move pending spam legislation out of the Commerce Committee and on to the full House of Representatives for consideration. To sign the petition, go to MadAboutSpam.

    Recycle Your Spam

    Recycle your spam at The Spam Recycling Center. They will pass the spam on to your representative as well as make it available to software companies to improve their spam filter products.

    Take Action

    Many of you who read this article are also interested in learning how to complain to or about spammers. For the technical-minded, there's a great tutorial on how to decipher e-mail headers at Reading E-mail Headers. Those with little time or patience can try Spam Cop. Just paste in the spam including full headers, and within seconds Spam Cop will parse the headers for you and generate a complaint e-mail addressed to the responsible parties. Don't know how to view an e-mail message with full headers? Before using Spam Cop, check out the instructions at Spam Cop or Put a Spammer in the Slammer.

    Be Amused

    Totally gratuitous painting of the author by fantasy artist Craig Maher that won first prize at the 1999 GenCon in Milwaukee. Hint: Despite what some spammers might think, I am not one of the demons. The demons are the product of Craig's fertile imagination.


    Linda Formichelli has written for more than 60 magazines, including Redbook, Writer's Digest, eCommerce Business and Business Start-Ups. Visit Ms. Formichelli's website.


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