Electronic marketing offers high-tech marketers an inexpensive, effective way to reach their customers. But the challenge is keeping your potential customers happy - and making sure the marketing messages aren't simply fodder for electronic trash cans.

As the number of average consumers with e-mail access increases, many marketers are shifting from traditional direct mail campaigns to e-mail-based campaigns. Lists of e-mail addresses are a gold mine of potential customers. But what do the end users think? Are they so inundated with "junk" e-mail that they hit the delete button the minute a marketing message come over the transom? Are marketers doing more harm than good by promoting new products, upgrades and services via mass e-mail messages?

GOVERNMENT REACTS

Not surprisingly, this issue, which has been gaining front-page coverage in many of the nation's direct marketing trade publications, has also caught the eye of the country's politicians. Two legislators in particular have introduced bills specifically designed to address the matter. Both of these bills would amend the Federal Communications and Telephone Consumer Protection Acts to "prohibit the use of any computer or other electronic device to send unsolicited advertisements to an electronic mail address of an individual with whom [the sender] lacks a pre-existing and ongoing business or personal relationship" without the recipient's permission.

One bill, the Netizens Protection Act of 1997, introduced by Rep. Chris Smith (R-N.J.), would impose a $500 maximum civil penalty on violators. Another bill, presented by Sen. Frank Murkowski (R-Alaska), would raise the penalty to $11,000 per incident. Under Murkowski's proposed bill, marketers would have to cease transmission of unsolicited e-mail when requested by a recipient within 48 hours. Additionally, marketers would be required to clearly identify their e-mail as advertisements and include accurate address and routing information so as not to mislead Internet users. These bills are currently in review by various legislative committees. The Federal Trade Commission has been holding hearings on the overall issue of electronic privacy.

WHAT DOES IT MEAN?

What does all this mean for software publishers who recognize the value of electronic marketing? For most companies, which probably haven't pondered the legislation's full impact, it means a viable vehicle in their marketing arsenal may be compromised. High-tech product marketers would be hit especially hard by this legislation. For these marketers, the Internet is an extremely compatible marketing tool in that Internet users are already qualified as hardware/software purchasers.

With this in mind, it's important for software publishers, as well as their counterparts on the hardware side, to raise their awareness regarding the current challenges facing electronic marketers.

One place to start is with the terms opt-in and opt-out, which are at the center of the current maelstrom regarding consumer privacy in electronic marketing. Simply put, opt-in means consumers must specifically indicate they would like to receive future online communications. Another way to look at it is the consumer subscribes to receive subsequent information from the marketer. If the consumer does not elect the opt-in option, then the marketer must cease marketing to that e-mail address. Additionally, the marketer shouldn't provide that consumer's address to another marketer for the same purpose. As part of an opt-in option, e-mail users could also direct their online service providers to screen out unsolicited commercial e-mail. The Murkowski bill would require online providers to install equipment necessary for screening purposes.

Opt-in would drastically reduce the opportunities for electronic marketers by limiting the market to those who have specifically opted-in. If they do not opt-in, you, the marketer, would not be permitted to send future communications. This holds true for consumers who may just have temporarily decided not to opt-in and, even more importantly, for the vast majority of people who for a variety of reasons (e.g., too busy, uninterested at the time, basic human nature, etc.) choose to do nothing. Just because they failed to opt-in, these consumers will no longer receive information and offers that they may well have wanted and valued. For marketers, the opportunity to capture a vast universe of qualified, highly responsive names is virtually lost. Many perceive the move toward opt-in as a restriction of rights - both the consumers' as well as the marketers'.

Opt-out operates on a different premise. It gives consumers, at the time of the solicitation, the option to decline future offers of information from a marketer via electronic marketing, as well as direct mail or telemarketing. In addition, it lets consumers request that marketers don't disclose consumers' personal information obtained online to third parties either through renting, selling or exchanging this data. Opt-out doesn't just apply to prospective customers; existing customers can also institute an opt-out by sending a message to unsubscribe from the marketer's future e-mailings.

Opt-out is a much more sensible approach because it balances commercial needs with individuals' rights and their need for privacy. It provides marketers with as broad a universe of potential customers as possible, while also giving consumers the freedom to control how their e-mail address and personal information conveyed online may be used. Although the burden may be on the consumer to actively opt-out, we all know that freedom comes with responsibility.

THE RIGHT TO PRIVACY AND PAST LEGISLATION

Now may be a good time to remind you that privacy is not explicitly mentioned in the Constitution, although through the Bill of Rights, there is a broad affirmation of personal privacy. Unquestionably, privacy is deeply ingrained in our social psyche. The first "privacy law" was developed by Samuel Warren and Louis Brandeis in 1891. Years later, articles on privacy appeared in such prestigious publications as the Harvard Law Review discussing the right to be let alone and control information about oneself. Then, in the 1970s, The Privacy Act was developed and passed. It granted individuals the right to see, copy and direct federal agency records and to restrict disclosure of the information. In 1980, privacy legislation passed in the form of The Privacy Protection Act, which prohibits law enforcement from searching or seizing materials without probable cause. More recently, and more specifically relating to electronic marketing, was the passage of The Electronic Communications Privacy Act (ECPA) in 1986. It prevents private entities, in addition to government, from unauthorized access to stored messages (i.e., e-mail) as well as the interception of these messages.

Another current law relevant to electronic marketing and consumer rights is the Telephone Consumer Protection Act. It outlaws fax solicitations on the premise that fax solicitations use consumer resources (i.e., their fax paper) without permission and also that advertisers have no right to turn consumers into a captive audience unable to decline receipt of advertisers' messages.

Now, electronic marketers are facing the aforementioned legislation proposed by Rep. Smith and Sen. Murkowski.

Tackling the issue from another position are specific industry associations, including the Direct Marketing Association (DMA) and Interactive Services Association (ISA). They believe that better standards and self-regulation on the part of direct marketers can successfully control electronic marketing abuses, such as spam/junk e-mail, advertisements misrepresented as news information and the indiscriminate harvesting of consumers' names and personal information.