Promotional E-Mails New Revenue Stream for Isps

January 24, 2001

NEW YORK (Reuters) - Promotional e-mail delivery will become a new revenue stream for large Internet media networks, Internet service providers and Web-mail providers, Jupiter Media Metrix said in a report released Wednesday.

Currently, Internet media networks and ISPs are searching for ways to diversify their revenue base as they are hit with a decline in advertising spending.

Jupiter projects that ISPs and e-mail service providers will have about 5.6 billion e-mail messages cross their networks for each one million subscribers by 2005, and advertisers will send 268 billion e-mail messages in 2005.

``As they (Internet e-mail service providers) restrict access to a user's primary inbox and monetize the delivery of promotional e-mail, advertisers looking to reach consumers online must prepare to pay a premium,'' said Jupiter analyst Christopher Todd. ``Large portals, ISPs and other organizations that have a sizable e-mail subscriber base will see it as a significant opportunity to generate additional revenue.''

The research firm thinks the current free delivery of promotional e-mail will evolve into a tier-based scenario that forces marketers to refine and focus their e-mail strategies. Among the tiers will be one that offers profiled delivery of e-mails based on individual usage behavior.

Another tier would allow the delivery of e-mails into inboxes with different fonts or icons to break through the clutter, and another would allow for standard delivery direct to the primary inbox for marketers.