Email has been described as the "killer app" for direct response—and for good reason. In theory, if you email to one million addresses, you will reach one million people.

If you purchase one million ad impressions on the Web, however, you don't know if you'll reach one million people one time, 500 thousand people twice, or 50 thousand people 20 times. So if an advertiser's goal is reach, email is hard to beat.

Department store pioneer John Wanamaker is supposed to have said, "Half my advertising is wasted. I just don't know which half."

But what if 50% waste turned into 90% waste?

Falling Open Rates

As a media planner, I've recently noticed that the open rates of HTML email campaigns have been falling (the open rate is based on the number of calls to the server from respondents who open the HTML email).

The culprit? UCE (unsolicited commercial email), commonly referred to as spam. It now accounts for anywhere from 20% to 70% of all email. As a result, corporations and ISPs are implementing filters and anti-spam software to intercept messages, making it more difficult for legitimate marketers to reach customers.

So the million-dollar question is, "How many emails never reach their intended recipient?" Online marketers say up to 15% of legitimate email never reaches its intended recipient, and the number is expected to grow as more corporations and individuals install anti-spam software.

As a hobby, I started a Web site, WineRelease.com, in August 2000 and built an email list of 1,800 subscribers to my monthly newsletter of upcoming wine releases. I recently requalified subscribers, sending an email to those who have been on my list longer than a year (790 subscribers) and requesting that they state whether they still wish to receive the newsletter.

The response rate was 77% (71% yes, 6% no); 6% of the emails bounced; and 17% of recipients never responded (after four requests).

I was quite pleased by the response rate, but the question regarding the 17% (non-respondents) is this: Are they receiving my email, or have they chosen "this is spam" or "block sender" to ignore my mailings?

What's Going on?

Because many publishers require subscribers to jump through a few hoops to unsubscribe, subscribers very often use the anti-spam features of their email software instead.

As a media planner looking over email campaign open rates of 15-30%, I am frustrated at the lack of clean lists. Yes, the email subject line influences the open rate, but what percentage of recipients is using anti-spam software to intercept and direct my messages to the trash before they get to inboxes?

Most list vendors promote their high-priced lists as consisting of highly qualified individuals who have double opted in. But how many of their double-opted-in subscribers still wish to receive the email a year or two after signing up?

It is easier to click on "this is spam" or "block sender" than unsubscribe from most email lists, so many of those lists are littered with "recipients" who never actually receive list vendors' emails.

What to Do

List vendors and email newsletter publishers should requalify their subscribers every year, just as trade publishers requalify theirs. A simple "reply yes or no to this email" should suffice, with the recipient taking action to prove that the email is still wanted.

To achieve an acceptable response rate, however, multiple email requests must be sent. How many? That's a real judgment call, because you'll effectively be classifying non-respondents as no longer valuable. So consider factors such as the frequency of publication, the timing of renewal requests (expect low response rates in the summer), and the value of the newsletter/list to the subscribers.

Email vendors should then publish their requalification results to show the true value of their lists, and they should educate media planners and advertisers on the benefits of a clean list.

Publishers should base their CPM off their "rate base" and can throw in "bonus" emails of the non-respondents as added value. I would rather pay $200 CPM for a clean list than $100 for a list that has never been requalified.

These list vendors and e-newsletter publishers would have a competitive advantage over their competition, and advertisers would receive a better response from their campaigns, which would lead to repeat purchases. All of which would lead to increased advertiser revenue.

Prediction: Just as other industries have acceptable "first-year written request" data (i.e., the percentage of the circulation that is requalified, or new, within the past year), email requalification as Standard Operating Procedure is inevitable.

Going Above and Beyond

You can further differentiate your list from your competition's and command an even higher CPM.

When requalifying your subscribers, require that they answer a demographic or purchase-preference questionnaire. If your newsletter is valuable enough to your subscribers, they will take the time to provide the information.

Also, provide a Comments area at the end of the questionnaire. Even if you decide not to include a questionnaire, you can still ask for comments.

The passion—and value—of your audience will be evident from feedback such as “Your newsletter is the first email I open in the morning,” or “I rely on your newsletter to keep me up on the latest technology,” or “I rely on your emails to save me money on daily purchases.”

Bottom line: Media planners want to know that their message will be seen by the number of people whose email addresses they purchased, and the price they pay will depend on the value of your audience.

It's up to you, the publisher or email vendor, to demonstrate that value.