The One-to-One eMessaging Company David S. Fowler Dir of Deliverability & ISP Relations How to Optimize Deliverability “The Inbox Event” June 2 nd 2004

OK repeat after me…. Spam is BAD…. Marketing is GOOD….

Optimize Deliverability  Deliverability  Its still about the Spam baby!  A CAN-SPAM Legislation Update  New Terminology Primer  CAN-SPAM Compliance  FTC Rulemaking and Reporting  Legal Update - First CAN-SPAM Lawsuit  A Word on Identity  Marketing Compliance  What Can YOU Do to Optimize Deliverability?  Industry Best Practices  Deliverability Issues for 2004  Q & A

Its Still About the Spam  Over 80% of all today is Spam: Postini 5/04  Jupiter Research of 1,300 Internet Users  63% trusted less because of spam  77% their online experience was unpleasant  58% were unaware of the federal legislation  5% ordered a product or service from Spam  The average Spam s a consumer can expect:  2003: 3,920  2008: 6,395  marketing remains vibrant  Estimates that spending will grow from  $2.1B in 2003 to $6.1B in 2008  Between sponsored messages will grow at twice the compound rate as overall message volume  Remember there are over 155M wireless subscriptions in the USA

Spam: How did we get here? Q1-02  Spam is becoming an annoyance problem Q4-02  AOL releases AOL 8.0 with the “Report as Spam Button” Q2-03  Spam lawsuits begin to emerge Q2-03  FTC Spam Forum Q3-03  AOL releases AOL 9.0 Optimized  Earthlink introduces Challenge Response options Q4-03  Federal Spam bills moving in congress  CA Bill 186 approved for 01/04 effective date  DMA, AIM, AAAA Release “Best Practices”  Recipient control of the “In Box” widely encouraged  authentication standards introduced Q1-04  CAN-SPAM legislation becomes effective Q3-04  New Spam threats emerge: Pop Ups/Cell Phone ? Q4-04  Authentication standards adopted ?  reputation services become mainstream ?

2004 Terminology Primer  If you consider marketing you need to know to understand the following:  Affirmative Consent  Basically means Opt-In but with added responsibility  If you share an address with a third party, you must give the recipient clear and conspicuous notice at the time the consent was communicated  Commercial -vs- Transactional or Relationship  The law treats these types of s separately. The basic distinction is the message purpose. If its an advertisement for a product or service then its commercial  If the purpose is to facilitate, complete or confirm a previously agreed-upon commercial transaction, then the is a relationship or transactional communication  Included in transactional or relationship would be warranty information, product updates etc.

CAN-SPAM Compliance Overview Compliance GuidelinesAction Working Opt-Out Mechanism All campaigns must include a working unsubscribe option that processes requests within 10 business days of the initial request Identification of the Advertisement and Advertiser All campaigns must be clearly identified as an advertisement and include the marketer’s physical address Accurate and Relevant Subject Lines All campaign subject lines must be accurate and relevant in respect to the campaign content

FTC Rule Making: Six Areas The FTC will interpret & define six areas of CAN-SPAM:  Adult Content Labeling in  Definition of "Primary Purpose”  The FTC will define the term "Primary Purpose" as it applies to the primary purpose of a commercial message  Further Define Transactional and Relationship Messages  Although not required, Congress asked the FTC to review what type of messages constitute TRMs  Opt-Out Period  While additional rules are not required, the FTC has the option to make changes to the current 10 day opt-out period if required  Aggravated Violations  The FTC has the option of defining additional violations that will increase penalties. This is not required and does not have a time frame for completion  General Rule Making  The FTC has an open invitation to create additional rules to help enforce the act

FTC Reporting: Four Reports The FTC is required to deliver four reports to Congress:  Do Not Solution ("DNE")  One of the most controversial aspects of CAN-SPAM  The FTC has issued a RFI seeking input on how to implement this solution and is expected to offer recommendations in June 2004  Reward or Bounty System  CAN-SPAN introduced the idea of paying a fee or a bounty to people who help authorities track down spammers  The FTC has been asked to issue a repot on the feasibility of this idea in September 2004  A Commercial Label  Prior to CAN-SPAM, many US states required commercial messages begin their subject lines with "ADV." Congress asked the FTC to review this idea and others and report back on the best way to label CEMMs by June of 2005  CAN-SPAM Effectiveness  Two years after the effective date of CAN-SPAM, the FTC has been asked to deliver a report to Congress on how effective CAN-SPAM was at curtailing spam and reducing the incidence of fraudulent messages

Rules & Reporting Important Dates IssueDue DateComments Adult Content 05/01/04  Regulations will be announced for clearly identifying adult content material Do-Not- 07/01/04 10/01/04  Plan & timetable will be announced for the registry  Also the effects on children's  FTC may implement the registry Bounty System10/01/04  Plan will be announced on how to reward people who assist in identifying violators under the act Primary Purpose Definitions 01/01/05  Regulations will be provided on how to define the primary purpose of an message Labeling07/01/05  Labeling plan to be announced. Marketers should watch this space closely for input Report to Congress01/01/06  FTC to provide a report to indicate the success of the bill and any necessary changes

First CAN-SPAM Lawsuit  the lawsuit alleadges that was sent containing:  41: with false or misleading header information  41: that included a domain name that was obtained by means of false representation  3: to recipients who had opted out  14: without a valid physical postal address  1: to an address that was obtained through harvesting  57: to addresses that were obtained through automated means  What Remedies are being sought?  Damages for the actual monetary loss or statutory damages  Aggravated damages  Preliminary & Permanent Injunctions  Attorneys fees  Cost of Suit  Any other relief the court deems “just & proper”

A Word on Identity  Its about TRUST!  Several ISPs have proposed plans to ensure authentication and prevent spoofing, they include:  Microsoft: Caller ID  Microsoft’s plan requires senders to publish their IP address in a policy document for reference by the receiving server  AOL: Sender Policy Framework  It uses the DNS listing of servers to verify that is sent from the domain it claims. SPF compares the sending IP with a list of authorized addresses from that domain  Yahoo!: Domain Keys  Domain Keys uses public key encryption rather than IP address verification. Each sending mail server includes a personal key or identifier in the message header. Receiving servers can compare the header to a public key from the DNS to confirm identity

Industry Best Practices  Work with a Reputable Provider  Do your homework & due diligence before you engage services  Implement a Fully Client-Branded Domain  Work with your internal or external resources to facilitate this process, establish your mailing identity  Maintain a Consistent “From Address”  Consolidate to one from address if you are utilizing multiple addresses  Encourage Subscribers to Add Your “From Address” to their Address Books  Add standard verbiage to the top of all messages encouraging subscribers to take this action  Process Challenge Response s  Decide on your strategy to process these s weather internal or external

Industry Best Practices  Include a Link to a Hosted Version of the Message  Add standard verbiage to the top of all messages providing subscribers this option  Implement Welcome Confirmation Messages for all New Subscribers Regardless of Source  Many marketers have confirmation messages in place that are generic or only apply to those subscribers registering via the web site  Looking ahead it's imperative that marketers welcome all new subscribers regardless of acquisition source  Send a Proactive Profile Update Message every Quarter  Encourage subscribers to update their address and profile information respective to their subscription  Encourage subscribers to add your “From Address” to their Address Book  Reach our to your clients and set expectations that you will be proactively communicating with them

Industry Best Practices  Aggressively Monitor all List Sources  Marketers need to ensure that all acquisition channels are “above board” following industry best practices  Marketers should look out for list sources that contribute new addresses with an excessive unsubscribe, deactivation, or complaint rate  Simplify the Unsubscribe Process  Ensure that passwords, account numbers or some form of login is not required. If some intermediary step is needed prior to allowing the subscriber to unsubscribe, ensure that the process is as simple and straightforward as possible  Review all Industry and Deliverability Updates  deliverability is a constant challenge  Best practices and potential solutions change almost daily  Follow the latest trends and best practices closely  Work with your provider to ensure proactive communication surrounding Deliverability  Implement your providers suggestions in your campaigns

Marketing Compliance  Steps to consider for optimal deliverability  Be honest about you organization and product  Include and promote your privacy statement  All commercial must comply with the CAN-SPAM act  Follow industry best practices as outlined  Evaluate a “Bonded Sender” or “Trusted Sender” solution  Consider applying for an Internet privacy seal  Work with reputable service provider if you are outsourcing  marketing 2004  Is all about trust, reliability and compliance  There are NO guarantees for being successfully delivered into the in-box  If you follow and adopt these suggestions your chances defiantly increase

Industry Issues – 2004  Deliverability issues will continue to change for senders  Aggressive ISP filtering and blocking using advanced “spam learning” tools and filtering methods on the rise  Client branded domains adopted as a mainstream practice  Growing support for a multiple tiered solution to Spam  The Law / Technical / Identity / Reputation  Bonded Sender, Identity & Reputation programs  Becoming aggressively considered and implemented as an industry best practice A technical solution to SMTP Authentication will be adopted this year  The business & industry implications of a Do-Not- list will be fiercely debated this year  Stay tuned on this one

Contact Information Thank you and for more information please contact: David Fowler Dir of Deliverability & ISP