Marketers Losing Interest in AOL Addresses

Jun 22, 2006 12:30 AM  By

If AOL wants legitimate marketers to start avoiding sending to its subscribers, the plan is working. E-mailers are preparing for a serious drop in performance of AOL addresses, and some are abandoning mailing to AOL address holders altogether.

The banner ads the company recently began inserting on the bottom of paying subscribers’ e-mail have cut the viewing area by a third, making the addresses even less enticing to mailers than they already were. Moreover, the attention-diverting banners now compete with whatever is in the message—usually a series of broken links and graphics.

Not surprisingly, some subscribers are up in arms about AOL’s move to display ads on their e-mail screens. At the same time, some marketing consultants are counseling their clients to consider suppressing AOL addresses, which can make up 20% of a consumer file.

“AOL is creating an environment where people don’t want to send e-mail to their users, which could be the goal, but I don’t think it will thwart the really bad spammers,” says Jay Schwedelson, corporate vice president of direct marketing list company Worldata. “Everyone expects to start seeing a drop in response rates from AOL addresses, and the more legitimate marketers are going to take their efforts elsewhere.” He adds that besides the new banners, AOL’s practice of blocking HTML graphics makes the addresses even less enticing.

“I have a lot of clients saying, ‘I just don’t want the hassle, let’s not sent to AOL addresses,’” Schwedelson says. “A lot of marketers don’t find AOL addresses to be their best responders anyway.”

Indeed, AOL addresses are becoming significantly less important to e-mail marketers every month. Parent company Time Warner reported in its quarterly earnings statement that as of March 31, AOL’s U.S. subscriber base was 18.6 million, a loss of 835,000 from the previous quarter and a loss of 3.1 million from the previous year.

Bill Moore, vice president of marketing for home-brewing and wine-making supplies merchant William’s Brewing, says AOL routinely blocks his company’s e-mail newsletter, so he simply suppresses those addresses. “We just don’t mail to them anymore,” he says.

Another reason marketers are increasingly eyeing AOL addresses with suspicion is that their messages may appear with a banner from a direct competitor below it, says Stefanie Pont, managing partner of marketing consultancy Pont Media Direct. “If you’ve got a mortgage offer going out this morning and it’s directly over LowerMyBills.com, what is your recourse?”

As of last week, Pont was e-mailing her clients screen shots of an AOL account with the banner included to help them decide what to do. If nothing else, the newly inserted banners bring new creative challenges, she says.

As a result of the new ads, “in some cases, the first live link to click on is now below the fold,” she says. Pont adds that she thinks the new banners may hurt interest in Goodmail’s CertifiedEmail service, where marketers can pay to have their e-mail guaranteed to be delivered to AOL addresses with graphics and links intact.

“Why am I going to pay extra so that you can deliver e-mail that no one’s going to look at?” she says.

But teve Webster, chief strategist for e-mail service provider iPost, says AOL’s irritating changes to paid-subscribers’ e-mail accounts may be all part of the plan. “AOL is trying to pull its bacon from the fire as it is slowly being lowered in by the loss of subscribers,” he says. “If you’re an AOL executive, the market forces that are pushing your subscribers away from you are irreversible. You cannot stop the spread of broadband, and you cannot compete with the phone companies, so what do you do? You give up the paid Internet access business that has been your bread and butter for so long.”

AOL is probably gunning for market share in the portal business dominated by Google and Yahoo! by driving consumers—and their eyeballs—to its free service, he continues. “To me it seems that AOL is consciously forcing their paying customers to get upset and move to the free version of AOL, which is AIM.com, before they lose them altogether. The one piece of real value that subscribers still get from AOL is that address they paid for 10 years,” and the way for subscribers to keep their old addresses is to move to the free service, says Webster.