Congratulations to LashBack client ExactTarget, who has recently secured $70 million from three venture capital firms in order to expand internationally and continue to innovate their email marketing platform. The round of funding is one of the largest in the U.S. for 2009, which is an incredible statement for the critical role that email will continue to play in our global economy. 

The investment comes as no surprise, as ExactTarget has experienced three years of continued profitability and a record breaking performance in Q1 of 2009. It seems that as other marketing channels are shrinking, email continues to grow and prosper both in the U.S. and globally. Per the ExactTarget press release, Exact Target has added over 250 new clients and boosted revenue by over 40% in the first quarter of this year. This follows 2008, where Exact Target posted record breaking growth, adding over a thousand new clients and upgrading its email platform to include several key integrations. Exact Target now integrates with  Google, Microsoft, Omniture and Salesforce.com and is planning to expand globally with the announcement of a new international office location in the next thirty days.

In addition to boosting the economy by providing businesses with targeted, permission-based email marketing solutions, ExactTarget was recently voted one of the top ten places to work in Indiana and is continually adding employees. Antagonists of email marketing need look no further than companies like Exact Target to see the growth and innovation happening now, while other industries are waning.

Part of the reason email is still incredibly relevant is its implication in one-to-one, customer-oriented marketing in both the B2C and B2B spaces. Email continues to reinforce social marketing while maintaining the highest ROI of all marketing channels. Exact Target’s continuing success and the resulting capital investments in its solutions are a testament to the power and potential of well-targeted email marketing. We at LashBack are extremely excited to implement ExactTarget’s best-of-breed solutions in our marketing program, and can’t wait to see what the rest of 2009 will bring.

Since November of last year much speculation has postulated regarding the purpose of the Conficker virus infection. It was theorized to be a large scale infection that would wreak havoc on a global scale. Last month conficker’s true cause was identified and executed; to use the botnet it had created to send out massive amounts of spam email (link). Moscow-based Kaspersky Lab asserts that any given conficker-infected computer could be sending out as much at 80,000 emails in any given 24 hour period (link). Although this is a lot, it’s much less than was initially expected.

As an analyst here at LashBack I can tell you that we see a lot of commercial email everyday, and one of the things we check for while analyzing messages is whether or not the email has been sent through an open relay, which is a violation of the CAN-SPAM Act. The use of botnets such as the conficker zombie-computer army is a common workaround for underhanded mailers.

Plenty of actions can be taken to remove this self-updating menace, and hopefully thanks to the publicity it has recieved it can be stopped altogether before inundating inboxes worldwide with unsolicited email.

LashBack Expert Contributions is a new way to share expert knowledge with LashBack TRUSTED  readers. This month kicks off with Austin based internet attorney Kavon Adli’s contribution on a new federal ruling on site terms with the right to modify.  In a recent case surrounding an advertiser’s site terms, a “unilateral modification” clause rendered a contract unenforceable. This type of clause is incredibly common in online advertising. Hence, it may be time to take a second look at your site terms.

Here is expert guest contributor and Austin based internet attorney Kavon Adli’s take on a new federal district court ruling:

In Harris v. Blockbuster, Inc., decided April 15, 2009 [2009 U.S. Dist. LEXIS 31531 (N. Dist. TX. 2009)], a federal district court refused to enforce a contract on the grounds that it contained a clause permitting one of the parties to unilaterally modify the contract and make changes effective immediately upon posting notice on its website. The court reasoned that the existence of the clause rendered the contract “illusory”.

Notably, “unilateral modification” clauses such as the one in Harris are extremely common in the online advertising industry. In fact, they are so common it would not be unreasonable to say that they have become the standard in some areas. Few would suspect, however, that the mere inclusion of such a clause might subject one’s entire contract to invalidation.

A federal court of appeals found as much in a prior case (Morrison v. Amway Corp., 517 F.3d 248 (5th Cir. 2008)) in which a party attempted to apply a change made pursuant to such clause retroactively. That is, the party attempted to modify the other party’s rights as applied to events taking place prior to the modification. Harris, while a lower court decision, is arguably more significant since the court determined that such clauses render contracts unenforceable even where there is no attempted retroactive application.

The good news is that networks and other entities that would like to retain the convenience of these sorts of clauses may not be without options. According to the court in Harris, adding a “savings clause” providing that the modification clause “does not apply to disputes arising, or arising out of events occurring, before such publication” should avoid the potential for retroactive application (which is the primary concern), thereby protecting against non-enforceability or invalidation.

Disclaimer: The authorities identified above may not be applicable in the reader’s jurisdiction or to specific facts that differ from those presented in the cases cited. This article is not intended as a substitute for legal advice, and should not be relied upon for any purpose without consulting a licensed attorney.

As online marketers develop new channels for driving traffic, the evolution of industry-wide regulation is sure to follow. The email marketing channel procured the CAN-SPAM Act, as well as the need for a symbiotic relationship between advertisers and publishers.  For as long as advertising has existed, governments have attempted to regulate it, in the interest of both protecting consumers and curtailing deception. However, the rather lengthy processes for crafting government legislation can hardly keep up with the rapid changes in direct marketing. As a result, it makes sense for agreed upon best practice guidelines to arise organically from players within the industry.

With the rise of in viability of blog and review sites, one CPA network dedicated to compliance, has developed a set of industry guidelines to ensure these channels maintain credibility and respect the rights of consumers.  ClickBooth and its parent company Integraclick, in an open letter to the SEM marketing community, has released compliance policies to its publishers for blog and review sites.  In addition, they include a compliance audit process for publishers.

New guidelines for blog and review sites from ClickBooth are as follows:

 If Publisher Website adds user value and non promotional content is available and significant affiliate does not need to post “Advertisement” at the top of the page. However, if the review or blog site’s sole purpose is advertising, the website must contain the verbiage at the top of the site labeled “Advertisement.”

• Each such Publisher Website must contain distinct and legitimate content, substance and material.

• The Content appearing on each such Publisher Website including but not limited to testimonials, blog posts, and comments, must be entirely an accurate representation that is truthful and verifiable.

• Any testimonials appearing on such Publisher Websites must be accurate, truthful, verifiable and from individuals that have given their permission for such testimonials to be used by the Publisher in the manner so used on the applicable Publisher Websites. Where You have compensated an individual for the use of his/her testimonial, that fact must be disclosed, prominently, on the applicable Publisher Website immediately below or adjacent to the subject testimonial. Monetary compensations for testimonials are not allowed.

• Each such Publisher Website must have an asterisk next to Links to products leading to a disclaimer that contain a clearly worded disclaimer disclosing the fact that the proprietor of the Website has a commercial relationship whereby it receives compensation for referrals that result in sales of the product(s) featured on the Website.

• Review websites must disclose review process and steps taken to ensure a fair review. A fair review consists of tests or benchmarks conducted under the exact same conditions for all products reviewed.

• Each such Publisher Website should have images/videos that represent the consumer depicted, any images/videos used for dramatization must be explained with a disclaimer.

• IP address of user comments and other user submitted content must be retained and verified for authenticity.

These standards and other relevant web and search guidelines, along with Clickbooth’s compliance audit processes can be found here.

Growing concern over behavioral advertising, specifically ISP-based advertising has caused members of the House to propose drafting new online privacy laws.  There are two sides to the argument surrounding online privacy and advertising. One side is for greater government regulation, arguing ISPs and large companies have an incredibly invasive level of data on consumers.  The other side argues that the data a consumer provides online is never truly private, and regulating advertisers would only cause advertising-supported content to suffer.

In a meeting of the House Subcommittee on Communications, Technology and the Internet, members discussed the Consumer Privacy Protection Act, proposed in 2002, as a starting off point for drafting new legislation. The bill would require any firm that collects consumer information  to tell consumers what’s being collected and  how it’s used. It would also allow consumers to act on the notification. Industry reps, committee members and privacy proponents weigh-in at Kate Kaye’s post on ClickZ.  

The FTC has been taking a hard look at behavioral advertising as well, warning marketers that this may be their last chance to self-regulate. Read an interesting take on how educating consumers may be far more effective than regulation ever could at the Technology Liberation Front.

CAPTCHA, or Completely Automated Public Turing Test to Tell Computers and Humans Apart, is something we’re all familiar with…you’re just about to leave a comment, post a picture, login to a site, and this pops up:

This is about the time I let out a big sigh and squint my eyes in an attempt to decipher the captcha.  The obnoxious part is that when I come across them, I’m always about to do something…I’m not doing it yet.  So, the only thing standing between me and what I was about to do is that stinkin’ captcha.  The more tries it takes me to prove that I am a human and not a scheming bot, the less I appreciate captchas.

They exist for good reason.  Certainly they are a necessary precaution, but surely the process could be streamlined.

Google authors agree with me.  Rich Gossweiler, Maryam Kamvar, and Shumeet Baluja have been testing out a new simplified captcha where users have to, “adjust randomly rotated images to their upright orientation”.  As the article below  mentions, humans are pretty good with orientation.  Bots, however, are not.  Well, not yet…

Google doesn’t seem too concerned, for now: “We ensure that our CAPTCHA can not be defeated by state-of-the-art orientation detection systems by using those systems to filter images that can be automatically recognized and oriented.”  This is all fine and good, but this statement is in reference to systems currently in existence.  Can a system be created that can penetrate this new filter?

I submit that it can and will.  The question is when.

The direction technology is headed in seems to suggest that man and machine will be one-upping each other into eternity.   This begs the question, is there even a wall to run into?  Will there ever be a failsafe method of discerning between the two?

Stay tuned and we’ll all find out together.

http://news.ebrandz.com/google/2009/2566-google-researchers-experimenting-witn-new-image-captcha-method.html

A new bill Act C-27, titled the Electronic Commerce Protection Act has been introduced in the House of Commons to regulate commercial email in Canada. It has striking similarities to both Australia’s Anti-Spam Act and Israel’s recently enacted opt-in law, including allowing individuals the right to sue and requiring permission for commercial mailers. The law, introduced April 24, differs from the U.S. CAN-SPAM Act in the same way, because it requires permission to mail and gives individuals the right to sue, but excludes a prior business relationship. The language specifies fines of up to $1,000,000 for individuals and $10,000,000 for all other offenders.

The ECPA requires identifying the party on whose behalf the message is sent, providing a method of contacting the sender that is active for at least 60 days after the message is sent, and a working unsubscribe mechanism that opts the consumer out within ten days. It applies to all businesses registered with the purpose of commercial activity, including non-profits. However, along with requiring an opt-in, the new law exempts commercial email where a prior business relationship exists.

An important thing to note, which I read in an excellent post by Matt Vernhout at the EmailKarma blog, is that the ECPA states that an electronic message is considered to have been sent once its transmission has been initiated (by the sender) and that it is irrelevant if the intended recipient address exists or if message reaches its intended destination. This reference makes bounce management even more important for mailers to monitor and clean from your list. This post goes into greater detail on the finer points of the proposed legislation.

In addition the bill pertains to text messages and addresses unauthorized installed applications and alteration of data during transmission between senders and recipients.  The Canadian government also plans to create a Spam Reporting Centre to assist enforcement agencies in prosecuting offenders. The Canadian Marketing Association is said to be supportive of the bill.

Additional Resources to Learn About Canada’s New Email Laws:

Ken Magill discusses how Canada’s legislation differs from U.S. law at DirectMag.

Marketing Sherpa identifies five key differences from CAN-SPAM.

The ESPC will host a member call discussing the new legislation Thursday, May 7, at 2pm Eastern.

For members only, the ESPC has sent out a member briefing detailing and summarizing some important definitions and compliance requirements of the ECPA, including Safe Harbor, unsubscribe links, commercial messages, consent, contact information and more.

A study by Forrester Research and covered by Ken Magill at DirectMag  finds interesting stats on how  email marketing has been effected by today’s economy. Forrester reported a slight increase in consumer e-mail purchases from November to April. The study polled 2,000 North Americans in November and again in April. In November, 42% of consumers said they had made at least one email inspired purchase. In April, 45% had made an email inspired purchase. An increase in purchases from email could be due to the fact that bargain shopping is at premium right now. 82% of consumers planned no changes in their email spending habits.

One area the poll touch on was text messaging. 24% of consumers who send text messages plan to cut back on the amount of text messages they send and are planning to use email more often as a line of communication. This will draw more eyes to the inbox and in turn, allow consumers to see e-mail ads more frequently.

The Forrester Group seemed to think that email users are less susceptible to an economic downturn because the users are generally older and have more disposable income. I think that if eyes are being turned away from basic text messages and email is once again a more viable form of communication, consumers will view what is coming in the inbox more frequently and checking their email more than in the past.

The study also found that 41% of consumers are more likely to click on coupon ads because of the economic downturn. Increased click rates produce a synergistic effect with more consumers turning to email for a viable line of communication. Succinctly put for marketers, the more eyes the better. email marketers have a great opportunity to use coupons and incentives in their advertising push and score big.

It is good to see that commercial email has not taken a great hit from consumers. 2,000 people is a pretty small sample size representing the entire North American population. But if the statistics hold true for the population as a whole, e-mail marketers could have a field day and flourish during the recession.