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Executive Summary
 
Database Group Interactive is an established Email Service Provider (ESP), with a proven track record that has been developed in conjunction with a spread of blue-chip clients.
 
Email marketing is becoming an increasingly complex discipline, and many marketers who might once have considered carrying out the function internally are now realising that the best campaign results will be obtained in conjunction with a specialist broadcasting partner.
 
There are four principal drivers that are encouraging marketers towards the adoption of email marketing. They are:

• Reduced lead time to market.
• Increased measurability.
• Higher response rates.
• Inexpensive.

Email marketing is becoming an increasingly sophisticated discipline, and switched-on marketers are recognising that it is beneficial to engage with industry experts to help them with their email campaigns.
 
There are some good reasons for this trend:
 

• Best of breed technology
• ISP relationships
• Access to expert advice

Most Email Service Providers (ESPs) recognise that their campaign software is the most visual element of the service, and seek to impress their prospects through the showcasing of their solutions.
 
As an ESP, Database Group Interactive operates Ecos™, a proprietary e-campaign package that is developed and supported by Ecos™ represents a best-of-breed solution, incorporating dynamic content, member-get-member, spam scoring, and real-time reporting within the package. Ecos™ can be studied in greater detail in Appendix 1.
 
However, choosing the right Email Service Provider is not just a software decision. The biggest challenge that any e-marketer faces is that of deliverability and it is here, behind the scenes, that Database Group Interactive sets the pace. It helps if one first understands some of the threats that govern the deliverability conundrum:
 

• Data hygiene
• Spam traps
• Harvested addresses
• Real-time black-hole lists ( RBLs )
• Reputation scoring
• False positives

Database Group Interactive is familiar with all of these threats, and has forged a number of relationships and alliances to combat them. Some of the more prominent ones include:
 

• White-listings
• Junk Email Reporting Program ( JMRP )
• Smart Network Data Services ( SNDS )
• Sender Policy Framework ( SPF )
• Institute for Spam and Internet Public Policy ( ISIPP )
• Inbox Monitoring
• Sender Score Certification

By taking advantage of these alliances and relationships, Database Group Interactive is able to offer its clients a number of programs that enable them to maximise the benefit that they obtain from their email campaigns. These programs include:
 

• Obtaining Email Addresses
• Permissioning
• Data Hygiene
• Recency Management
• Bounce-Back Handling
• Creative Scoring
• Campaign Performance Analysis

Intuitively, it is understood that email marketing represents a low-cost route to the marketer’s target audience. However, there are several different ways in which these savings can be generated.
 
They include:
 

• Using email as a direct replacement for paper.
• Using email to complement ongoing paper activity.
• Converting traditional paper statementing and invoicing into e-billing.
• Employing data hygiene to reduce cost of acquisition.

 
Company Overview
 
Database Group Interactive is a well-known Email Service Provider (ESP), and was one of the earliest UK entrants to this industry after establishing in 1999. Currently, it is responsible for the monthly broadcast of between 15-20 million permissioned emails every month. Database Group Interactive has a hard-earned reputation for deliverability, through relationships with many of the leading Internet Service Providers (ISPs) and active participation on the Direct Marketing Association (DMA) Email Marketing Council (EMC). As a result, Database Group Interactive consistently achieves delivery rates in excess of 97%, an industry benchmark.
 
Database Group Interactive is a division of Database Group. Database Group (DbG) has been in business for over thirty years, providing sophisticated marketing database solutions to an enviable list of blue chip clients. Its services span a whole range of data marketing activities, from simple data cleansing to more complex analytical and tactical planning projects. At the heart of its philosophy lies measurement and action. There can be no value without action, and the belief is that you are what you measure. DbG works in partnership with its clients to identify their key requirements, prioritise actions through which to achieve their objectives and then measure to make sure that they achieve them.
 
Our philosophy is that the management of its client’s email campaigns extends far beyond sourcing a file of email addresses. It is about understanding the threats that the industry is presented with, forging alliances and relationships with partners who can assist in overcoming those threats, and then assisting its clients with managed programs that proactively avoid those threats moving forwards.
 
It is these levels of expertise that have enabled Database Group Interactive to set industry deliverability standards that its peers strive to match. Many of our principal clients have now enjoyed long-term relationships with the company, a positive reflection on the levels of service that they receive from Database Group Interactive.
 
Campaign management takes place through Database Group Interactive’s proprietary tool, Ecos™. Ecos™ is a best-of-breed solution that provides users with functionality such as dynamic content, integrated spam rating, and real time reporting. Transmission then takes place off the back of Database Group Interactive’s IronPort server technologies, providing each client with a dedicated channel through which only that client’s email volume is routed.
 
Database Group Interactive has an instantly recognised client base, featuring names such as Guardian Newspapers, the Royal Society for the Protection of Birds (RSPB), Precision Data Ventures (PDV), Fish4, Experian Prospect Targeting, and Tullo Marshall Warren (TMW), many of whom have been won in head-to head competition against Database Group Interactive’s industry peers.
 
Email Marketing Drivers
 
There are four principal drivers that are encouraging marketers towards the adoption of email marketing.
 
They are:
 

• Reduced lead time to market.
• Increased measurability.
• Higher response rates.
• Inexpensive.

The reasoning behind these points is not hard to understand, and is set out below:
 

• Reduced Lead Time
  Traditional direct mail campaigns typically take 3-6 weeks to conceive and execute. Email campaigns typically take approximately 10% of that to conceive the idea, design and broadcast the creative, and analyse the response data.
• Increased Measurability
  Email allows the marketer to measure response activity to the campaign in the form of delivery rates, open rates, and click-through rates. It also allows the marketer to measure ( and mitigate against ) negative responses such as bounce-backs, unsubscribe requests, and complaints. Learnings from previous campaigns can then be applied to fine tune future ones.
• Higher Response Rates
  Industry average click-through rates range between 5% and 15%. This evaluates favourably against direct mail, where comparable rates are in the order of 1% to 2%. Email marketing appeals to peoples’ sense or privacy by allowing them to research, compare, and purchase products without having to endure aggressive human-led sales pitches.
• Inexpensive
  The cost savings that can be obtained from email marketing derive from the data, the creative, and the distribution. All told, industry analysts have estimated that the total cost of an email campaign is approximately 10% of the direct mail equivalent. Coupled with higher responses leading to higher conversion, campaign performance also significantly out-performs that obtained through traditional channels.

 
Why Outsource?
 
Email marketing is becoming an increasingly sophisticated discipline, and switched-on marketers are recognising that it is beneficial to engage with industry experts to help them with their email campaigns. There are some good reasons for this trend:
 

• Best of Breed Technology Email is constantly evolving, and it is an ongoing challenge to stay up to speed with the latest technology. For email service providers, this is their core business, and they are constantly researching and developing ways to improve their service offering and create additional value for their clients. Few in-house technology teams have this level of motivation, and even those who do very quickly find themselves over-tasked and under-resourced.
• ISP Relationships Critical to the success of email marketing is getting into the inbox. Good Email Service Providers do this by developing relationships with the Internet Service Providers, who are the “gatekeepers” of the recipients’ inboxes. Most ESPs will have at least one resource dedicated to the deliverability role, dealing proactively with ISPs before problems develop. Carrying out this role in-house is resource intensive, and even then may not deliver anything approaching the same levels of success.
• Expert Advice Most ESPs provide ongoing education to their clients, even if it isn’t in the form of paid-for one-to-one consultancy. This education may take the form of list optimisation, good design practice, spam filter avoidance, and campaign response analysis. It’s in their interests to do so – this service forms part of the overall business relationship, and the better it is provided, the more likely that relationship is to continue and grow. An in-house operator doesn’t have the benefit of access to this pool of knowledge and is quickly at a disadvantage.
• Process Optimisation Many housekeeping and hygiene functions such as the management of bounce-backs, complaints, and unsubscribe requests occur on a regular basis, and ESPs will have developed automated routines to handle them. Some in-house solutions may have been developed to this same point, but most process these types of functions manually, which can become a major overhead when list sizes grow. In addition, ESPs will extend the functionality, for example by allowing their clients to differentiate between different types of bounce-back activity.

 
Why Database Group Interactive?
 
Most Email Service Providers (ESPs) recognise that their campaign software is the most visual element of the service, and seek to impress their prospects through the showcasing of their solutions. Database Group Interactive operates Ecos™, a proprietary e-campaign package that is developed and supported by Database Group Interactive. Ecos™ represents a best-of-breed solution, incorporating dynamic content, member-get-member, spam scoring, and real-time reporting within the package. Ecos™ can be studied in greater detail in Appendix 1.
 
However, the biggest challenge that any e-marketer faces is that of deliverability and it is here, behind the scenes, that Database Group Interactive sets the pace. It helps if one first understands some of the threats that govern the deliverability conundrum:
 

• Data Hygiene
  Internet Service Providers (ISPs) monitor the quality of the email address data that is being broadcast. Significant quantities of poor quality data (incorrect addresses, dormant accounts, etc.) are likely to result in the broadcast being blocked.
• Spam Traps
  These are email addresses that ISPs judge should not appear on any legitimately permissioned list. ISPs monitor these addresses, and deal harshly with ESPs who transmit to these addresses.
• Harvested Addresses
  Similar to spam traps. Unscrupulous list managers will sell lists that have been compiled by web-spiders, automated programs that scour web sites for email addresses, which are then sold on for marketing use. Typically in the vein of “contact@”, “info@”, etc.
• Reputation Scoring
  A service provided by Senderbase. ESPs are allocated a score that is determined as a combined function of complaints, volume, unknown users, external reputation, and spam trap hits. ISPs use this score as a determinant of whether to receive email broadcasts from that ESP or not.
• Real-Time Black-Hole Lists ( RBLs )
  Blacklists operated by independent third-party organisations. RBLs usually list server IP addresses from which spam and other unsolicited commercial email (UCE) is originating. ISPs subscribe to one or more of these lists and will block traffic originating from any traffic originating from IP addresses contained within those lists.
• Complaints
  Complaints take several forms: recipient actions the “mark as spam” button; recipient notifies their ISP; recipient notifies an RBL operator. In any instance where complaint rates are deemed to be too high, deliverability can be compromised as a result.
• False Positives
  All ISPs operate spam screening technology that evaluates the email copy for elements that might indicate that it is representative of spam. Because of the sheer volume of spam that they are required to filter, there is a likelihood of legitimate emails being identified as spam, resulting in their non-delivery.

 
Relationships and Alliances
 
Database Group Interactive is familiar with all of these threats, and has forged a number of relationships and alliances to combat them. Some of the more prominent ones are now explored in slightly greater detail:
 

• White-Listings Some ISPs are willing to accredit broadcasters if they can demonstrate adherence to specified best practice requirements. This accreditation ensures successful delivery to all recipients serviced by that ISP. Database Group Interactive currently operates white-listings with the likes of AOL and Yahoo, two of the top-three domains.
• Junk Email Reporting Program (JMRP) The Junk E-Mail Reporting Program (JMRP) is a program intended to help large senders remove unwanted recipients from their e-mail lists. The goal of this program is to clean-up distribution lists so that users receive wanted e-mail and senders aren’t negatively affected by complaints.
• Smart Network Data Services (SNDS) A service that provides senders and ISPs with data about e-mail activity from their IP space that is sent to MSN Hotmail or Windows Live Mail. Senders are provided with data on e-mail activity, complaint rates and filter related information, all of which can be used to help improve their deliverability rates.
• Sender Policy Framework ( SPF ) An e-mail authentication technology that helps address the problem of spoofing and phishing by verifying the domain name from which e-mail is sent. Sender ID validates the origin of e-mail by verifying the IP address of the sender against the purported owner of the sending domain.
• Institute for Spam & Internet Public Policy ( ISIPP ) Operates the Email Sender Accreditation Program, and IADB-accredited email senders can benefit from the fact that associate ISPs and spam filters know that they can count on the email that they receive to be legitimate mail. ISIPP members are currently delivering over 1.300 billion pieces of email each month.
• Inbox Monitoring Offers detailed reporting and analysis of exactly where the emails are going, and where they aren’t. Provides insight in the form of cumulative campaign deliverability; campaign deliverability by ISP; URL black-list monitoring.
• Sender Score Certified ( SSC ) The leading third-party email certification program. By joining SSC, senders improve deliverability rates and differentiate their brand. ISPs and other email receivers benefit by avoiding the risk of inadvertently deleting email their users want and by reducing the costs of managing a white-list of senders. SSC is the only white-listing program that Hotmail recognises.

 
Client Programs
 
By taking advantage of these alliances and relationships, Database Group Interactive is able to offer its clients a number of programs that enable them to maximise the benefit that they obtain from their email campaigns. These programs are now expanded upon:
 

• Obtaining Email Addresses One of the most frequent obstacles to implementing an email marketing campaign is lack of email addresses. Database Group Interactive has relationships with most of the major email list managers, and can assist its clients with the sourcing of responsive targeted address lists with which to drive their campaigns. Database Group Interactive can also assist its clients with appending email addresses to their existing postal data to enable true dual-channel marketing.
• Permissioning
  The Privacy of Electronic Communications Regulations stipulates minimum permissioning requirements for the addresses used by email campaigns. There is also a clear link between permissioning and responsiveness. It is clear that a rigorous approach to the permissioning of the email address lists will have a beneficial effect on both delivery and response rates. Database Group Interactive has industry experts on permissioning requirements who can work with its clients to ensure the data they use is completely legitimate.
• Data Hygiene
  As explained earlier, poor data hygiene compromises campaign deliverability. Database Group Interactive has developed sophisticated proprietary routines to ensure that its client’s email addresses are correctly structured, contain valid domain names, and don’t represent foreign recipients or contain profanities. In this way only addresses with a guaranteed chance of delivery are broadcast in the first instance.
• Recency Management
  A number of ISPs, notably Hotmail, now employ recency as a measurement of ESP adherence to best practice standards. Continual broadcasting to dormant addresses is regarded as bad practice, and is likely to result in deliverability issues. This should make a lot of sense – the most recent element of the audience is also going to be the most responsive element. Database Group Interactive works with its clients to monitor the recency “heartbeat” of their customers, to ensure that only those most recent / responsive addresses are broadcast to.
• Bounce-Back Handling
  ISPs use bounce-back activity as a metric that filters back into the reputation scoring process. Bounce-backs can take the form of hard bounce-backs and soft bounce-backs. Where Database Group Interactive hosts the database, a rigorous bounce-back handling program is applied in real time. This delivers the added benefit of automatic uplift in campaign responsiveness, as open rates and click-through rates are not diluted by the portion of addresses that fail to deliver.
• Creative Scoring
  A key element in delivery success is the content that is used in the creative design. There are many rules-based spam filters that interrogate the copy for elements that resemble those that would be used in spam emails. Database Group Interactive has a detailed understanding of these rules, and works together with its clients to tailor their copy so that it obtains the best possible chance of being interpreted favourably by these spam filters.
• Campaign Performance Analysis
  A big strength of email marketing is the fact that it is measurable. Delivery rates, open rates, and click-through rates are all returned in real time. However, understanding what these results mean is a more complicated task, and it is here that Database Group Interactive can assist its clients by interpreting the response data, and deriving learnings that can then be applied to future campaigns, initially in the form of “incubators” where the new assumption is tested on a sample audience, and then across the board once they have been proven.

What Are The Financial Benefits?
 
Intuitively, it is understood that email marketing represents a low-cost route to the marketer’s target audience. However, there are several different ways in which these savings can be generated. They include:
 

• Using email as a direct replacement for paper.
• Using email to complement ongoing paper activity.
• Converting traditional paper statementing and invoicing into e-billing.
• Employing data hygiene to reduce cost of acquisition.

These opportunities are now explored in further detail:
 

• Direct Replacement for Paper
  As it is understood that the cost of running an email campaign is substantially less than the cost of running a paper campaign, the benefit of this approach is self-explanatory. The following table provides an illustration:
  (click to view larger in popup window)
  Assuming a campaign of 250,000 packs, with an average cost per pack or 40p, it demonstrates that an equivalent email campaign could be deployed from scratch ( ie including address appending ) for approximately 40% of that expenditure.
• Complement Ongoing Paper Activity
  Not all marketers are ready to replace their traditional paper-based marketing activity. Paper may have performed well historically, or there may not be enough email addresses to make a plunge approach viable. That’s fine - while there remains a perception that traditional direct mail competes with email, the two can be used to complement each other (see below ) with email being used before and after the mail shot to create additional awareness of the campaign. This approach can be deployed for surprisingly little additional spend – the copy and creative that have been produced for the above-the-line campaign can be re-purposed at little or no cost for the below-the-line counterpart. Market research has demonstrated that campaigns taking this integrated approach generate response rates that are 15% - 40% higher than would otherwise have been the case.
  (click to view larger in popup window)
• Convert Paper Billing to E-Billing
  While the focus in this document has been predominantly marketing focused, email also represents a great opportunity to convert paper billing (statements, invoices, credit notes) into a secure electronic alternative. In addition to the benefits that have been identified for e-marketing, the e-billing solution delivers its own subset of advantages:
   
  
  1. Secure solution
  2. FSA compliant
  3. Reduced lead time on collection
  4. Greater efficiencies for client’s customer service representatives
  5. Positive environmental impact
  
  The e-billing solution comprises the following elements:
  1. Email notifications
  2. View documents using multiple different indexes
  3. Access to document archive
  4. Ability to upload PDF documents
  5. Real-time query handling
  6. Submit re-print requests
  7. Exception handling
  
  Potential financial benefits can be illustrated as per the following illustration:
  (click to view larger in popup window)
  
• Data Hygiene to Reduce Cost of Acquisition
  It is likely that the marketer has spent a fair amount of effort and money to build the marketing database. If those names performed well in the past, they should be kept clean for future use. Doing so minimizes bounces and customer defections; Increases open and click-through rates; and minimizes chances of being blacklisted.
  It makes sense that the cost to reconstitute a clean, ready-to-mail, no-bounce list may be significantly lower than acquiring a new customer or prospect with an online acquisition program. A simple ROI analysis will demonstrate that having a clean, deliverable database of consumers, who have maintained a relationship with the company, is worth the investment.

 
Appendix 1 - ECOS™
 
ECOS™ (E-Mail Campaign Online System) is Database Group Interactive’s central tool in the production of e-mail campaigns, accepting HTML creative, managing the personalisation and image-hosting requirements, and converting them to e-mail. ECOS™ provides functionality such as online proofing using a defined seed list, tracking and reporting of response activity, and has been praised for ease of use against competitive solutions.

The objective of ECOS™ is to streamline the e-mail direct marketing activity, integrating the development, design, approval, implementation and analysis of e-mail campaigns. With this in place, this should allow faster turnover of e-mail campaigns with the majority of the tasks automated and providing greater levels of control ( if required ). Although the system is self-contained, it is by no means rigid. ECOS™ has the extensibility and flexibility to adapt to the demanding and unique ad-hoc requirements of different companies.
 
ECOS™ operates by allowing its users to navigate through the following process flow within a standardized, automated web-based environment (see below):
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Key features of ECOS™ include:

• Web-based application, accessible from virtually anywhere with connection to the Internet.
• Simple interface and easy to learn. Proficient users can setup campaigns in minutes not hours.
• Option of using pre-defined templates with ad-hoc body text or create the complete e-mail ad-hoc.
• Real-time reporting, accessible as soon as campaigns have been despatched.
• Full control over the implementation of the setup.
• Built in User Administration to allow self-maintenance of users.
• Built in FTP suite to allow uploads of images.
• New in the most recent release of ECOS™ is the inclusion of ‘variable content’. This enables you to create an email containing different content depending on the email data. So you can now send the same email out to millions, but its content will differ depending on their gender, age or marital status.
   
  

ECOS™ also incorporates Spam Assassin, a feature that allows users to evaluate their copy for propensity to trigger spam filters before the campaign is actually transmitted, providing them with the ability to modify their creative before it impacts negatively on their campaign delivery rates.