Progress and Opportunities in EmailPeter Wilson - CEO, LashBack

HitPath Masters ConferenceSeptember 2016

2

Game plan

September 2016

1. Who is LashBack?

2. Why get excited about email?

3. What are the risks?

4. What are the requirements?

5. Insights on quality and delivery

6. Market trends and opportunities

7. Wrap-up

September 2016 3

LashBack

• Based in St. Louis, providing services for more than a decade, receive and catalog millions of messages daily

• We have more than 100 major brands, agencies and networks as clients -- including many HitPath clients

• We provide critical visibility and information to businesses using email to acquire new customers

Manage compliance

Protect your brands and data

Identify risks and opportunities

PMA Compliance Council

September 2016 4

The audience probably splits down the middle on email

“You seem nice, but we don’t do much email, so I am going to quietly check my messages… most of which are email ironically.”

“Email is a great channel. We pay attention to the details and get a great return. We couldn’t be more excited about your presentation.”

September 2016 5

There are lots of reasons to love email

Median ROI for select channels/formats according to US marketers, June 2016Response Rate Report, 7/28/16, Direct Marketing Association and Demand Metric

Online Display

Paid Search

Direct Mail

Social Media

Email

28%

25%

18%

27%

122%

25% 50% 100%75%0%

“As in past surveys, email stays in the top spot, both in terms of median ROI and usage,” the study said. “The ROI of email far outdistances all other media, and conventional wisdom attributes this to the perception that email is free or very inexpensive to use.”

“Over half of this study’s participants plan to increase their usage of email in the next 12 months,” the study said.

September 2016 6

In case you are still not convinced

According to McKinsey & Company --

“E-mail remains a significantly more effective way to acquire customers than social media—nearly 40 times that of Facebook and Twitter combined. That’s because 91 percent of all US consumers still use e-mail daily, and the rate at which e-mails prompt purchases is not only estimated to be at least three times that of social media, but the average order value is also 17 percent higher.”

Jan., 2014

Email is significantly more effective than social media

91% of all US consumers use email daily

Email leads to more frequent and larger purchases

7

What are the risks… are there control issues?

September 2016

Advertiser

Agency

Lead aggregator

Network

Publisher

Network

Publisher

Publisher

Feed provider

Domain mgmt.

EducationDynamics

Direct Agents

PCH

Google Rook

Amobee

Matomy

• Any time you rely on any third-parties there are risks• This is especially true if they are paid based solely on consumer action/reaction (performance basis)

• Some advertisers go direct to publishers and others use various agencies, aggregators and networks

8

But we don’t use networks or affiliates….

September 2016

Advertiser (auto)

Captive agency

Regions

Email platform

Marketing partner

Dealership

Dealership

Agency of record

Dealership

Channel experts

Email platform

Email platform

Email platform

3rd partyagency

Marketing partner

Marketing partner

Marketing partner

Brand protection

Internal marketing

Contractor

Channel agency

Legal

Regions

Regions

Regions

Dealership

DealershipDealership

Dealership

DealershipMarketing partner

Brands, messaging and compliance

Messages sent to consumers

9

A closed loop is critical

September 2016

Advertiser (auto)

Captive agency Regions

Email platform

Marketing partner

Dealership

Dealership

Agency of record

Dealership

Channel experts

Email platform

Email platform

Email platform3rd party

agency Marketing partner

Marketing partner

Marketing partnerBrand

protection

Internal marketing

Contractor

Channel agency

Legal

Regions

RegionsRegions

Dealership

Dealership

Dealership

Dealership

Dealership

Marketing partner

Consumer

Advertiser (auto) Consumer

10

Checking-in

September 2016

Email is a great opportunity and you are likely emailing more than you realize.

Unless you are personally hitting send, there are control issues to be managed.

Half-listening

Committed to Candy Crush

• What are the requirements?

• What’s going on in the market?

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What are the requirements?

• Legal requirements• Most notably CAN-SPAM, aspects include

• Content - relevant, not deceptive, contactable sender• Unsubscribe – clear, working, honored unsubscribe mechanism• Sending – not sent through open relay, not sent to harvested address, no false header

• Policy requirements• Use of

• Permitted content – approved subject line, creative• Best practices – plain text postal and opt-out, publicly-registered domain

September 2016

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A simple example

Date: Has it been manipulated?

To: Has it been harvested?

From: “Miller Brothers Ford” <salesguy@millerbrothersford.com>Should not be “Approval Department”; is the owner of the sending domain identifiable?

Subject: “Fall Clearance Sale”Should not be “Wire Transfer” or “_U_R_G_E_N_T**”

Message: Is it misleading?Is the creative approved?Does it link correctly?Can the consumer opt-out?Is there a valid address?

September 2016

No postal address

Deceptive from address

Misleading from address (special characters)

Misleading subject (“Auto Response” and special characters)

Some advertisers flag use of “best” and “top”

CAN-SPAM Best practices Feed-provider general Feed-provider specific

Opt-in Clear, non-deceptive consumer opt-in

Not sent to harvested email

Document the opt-in

Header No forged headers

Relevant and not misleading subject line

Accurate from line

No privately registered sending domains

Don’t claim to represent a brand

Body No guarantees or promises

No hidden text or other techniques to bypass filtering

Postal address and unsubscribe links should not be embedded in remotely-hosted images.

Clear ads-only experience

Email must display the URL of the parked domain

Email should keep text simple and stick to generic statements

Consistent theme and messaging

Do not claim an association with a brand or a government entity

No incentivized clicks or threats

No connection to pornographic content

Font size and color clear, consistent and legible

A single, clear action button that:• References “ads” or “sponsored listings”• Leads directly to a parked domain (no interstitial

page)Do not:• Use the word “click” on any link (i.e., “click here

for…”)• Use the words “search”, “find”, “compare”,

“explore”, “browse”, “shop” or “learn” on an action button

• Use terms like “sub-prime”, “bad credit” or “fair credit” on credit card offers

• Use terms like “read article”, “watch video” or “search results for”

• Represent “approval”• Make claims about being “near the user”• Use high-risk terms like “learn more” or “learn

about”

Sender Clearly display sender with contact information

Corporate name and contact information (that matches the approval)

Unsub Clear, working unsubscribe

Other Not sent through an open relay

Must be pre-approved:• Domain parker, senders, creative and material

changes to the nature of the siteDomain parker must use:• Unique IDs/property codes for this traffic• Separate channels for each email acquisition

source/creative• A feed-provider seed address• A system to monitor for non-compliance

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What are the issues that come up in SPAM cases?

September 2016

• Dan Balsam is a serial litigator of SPAM-related cases• His suits follow a predictable format

• Summary, example• Parties• Sues under California law• Case

• Recipients didn’t provide consent• Misused from domains• Misleading friendly froms• Proxy-registered from domains• Misleading subject lines• Defendant is liable for mail sent by their agents• No need to show actual damages• Defendants do not meet the standard for a reduction in liability

Third-party domains (@gmail.com) prohibit spamming

Can’t use generic or misleading friendly from lines like “Approval Department” or “Online Dating”

Can’t use “not-readily-traceable domain names”

Can’t use subject lines like “Approved” or “Your request has been accepted”

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A few common sense steps (from non-lawyers)

September 2016

• Do not allow the use of major email provider from domains.• We have more than 3 million B2C messages in our database with a sending domain

of gmail.com and yahoo.com (150,000 since 8/1)

• Misleading subject lines are the most common of the other claims, but closely followed by friendly from issues. At a minimum, do not allow the use of the most egregious, frequently-cited terms.• We still see lots of mail referring to “approvals” or from the “Approval Department”

• Do not allow the use of proxy-registered domains.• Roughly 20-30% of messages are sent from proxy-registered from domains. They are

easily identified and addressed.

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Trends and observations on email quality

• We have more than 200 million messages in our database and examined compliance and delivery across multiple subsets

September 2016

Category Primary issues Best practices/other Observations

Send date Forged send date N/A Fairly rare, but we have more than 1,200 messages received 8/1 – 9/22 with a forged send date (after 9/22).

From line Deceptive, not relevant

Publicly-registered sending domain, misused from (@gmail.com)

Deceptive, not relevant and privately-registered fairly common.

Friendly from Deceptive, not relevant

N/A Deceptive and not relevant fairly common.

Subject line Deceptive, not relevant

N/A Deceptive and not relevant fairly common.

Content Deceptive, postal and opt-out present

Plain text postal and opt-out, hyperlinked opt-out

Core requirement issues fairly rare, best practice issues are common and impactful.

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Issues most commonly flagged for clients

September 2016

From line not relevant

Subject line

deceptive

Fromline

deceptive

24%

62%

18%13% 10%

80%86%

18%

Requirements Best practices

“Friendly from”

deceptive

Content deceptive

Image-based postal

Image-based

opt-out

Proxy- registered

domain

Data from July/August 2016.

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Can the issues/partners really be managed? Yes, they can.

September 2016

Content deceptive

“Subject” deceptive

Opt-out not hyperlinked

35%

13%24%

44%

10%20%

58%

18%

“Friendly From”

deceptive

Postal address present

Proxy- registered

domain

4%

34%

17%2%

LashBack clients

Non-clients

Data from July/August 2016.

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How does compliance impact delivery?

September 2016

• Messages without any compliance issues are 12% more likely to reach the inbox than messages with at least one compliance issue.

• Messages with more than three issues are 34% less likely to reach the inbox than messages without any compliance issues.

• Different compliance issues coincide with different delivery rates. The most damaging appears to be the absence of a postal address. Messages that are compliant other than a missing postal address are 59% less likely to reach the inbox.

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Compliance and delivery, low hanging fruit

September 2016

• Make sure the postal and opt-out are plain text.• If the postal is not plain text, the message is 92% more likely to be delivered to

the bulk folder.• If the opt-out is not plain text, the message is 90% more likely to be delivered to

the bulk folder.

• Make sure the opt-out is hyperlinked.• Messages with a hyperlinked opt-out were 73% more likely to be delivered to the

inbox.

• Make sure the domain is publicly-registered.• If the domain is not publicly-registered, the message is 80% more likely to be

delivered to the bulk folder.

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Compliance and delivery, more challenging

September 2016

• Use relevant, non-deceptive subject, from and friendly from lines.• Between subject, from address and friendly from, a deceptive from address has the

greatest impact on delivery.

Component/issue and likelihood of bulk

Deceptive Not relevant

Subject 78%“Free”“Auto Response:”“Re:”

66%“Click here”“PLEASE REPLY ASAP”Unrelated to offer

From 89%starbucks@e.starbucks.comjohn12@gmail.com

77%support123@rabbitdogcat.comOl53@motar2030.net

Friendly from 80%“Joe”“Approval Department”

87%“Amazing Offers”“Great Rates”

23

In general, what is the trend in email delivery?

• An analysis of more than 100 million messages over the last 18 months, shows:• Inboxing on a monthly basis ranging from 40-80%• Inboxing is typically 60-70% with a modest positive trend• The lowest rate of inboxing was in the 4th quarter of last year

September 2016

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Looking a bit deeper at email delivery

September 2016

• Across our data since August 1, mail being delivered to the inbox of Gmail users has averaged 31% as

compared to 56% for Yahoo and 53% for all other email providers.

• Some ESPs significant exceed these averages. For example, ExactTarget and SendGrid have average

delivery greater than 95% to Yahoo addresses.

• Looking at delivery, since August 1, based on 6 keywords:

KeywordsAuto

DatingLoan

EducationHealth

Sex

Inbox %79%71%61%29%27%14%

Ranked by inbox % Greatest # of messages sent

Greatest # of messages

reaching the inbox

4. Loan (29%)3. Auto (61%)

2. Education (74%)1. Health (79%)

5. Dating (27%)6. Sex (14%)

Dating

Health

September 2016 25

One person’s view on where the market is headed

Players• Advertisers want a systematic approach and broader view of risks and opportunities

• Greater visibility and control• More efficient ways to manage risk, evaluate performance and build scale

• Advertisers in certain verticals, like education and personal loans, are undergoing major changes

• Ad-feed providers, like Google, are playing a larger role and driving new practices• Networks are emphasizing efficiency

• Clickbooth’s shift to “performance exchange”• Matomy’s launch this month of a self-service demand side platform

• Service providers are emphasizing quality and breadth of service• ImpactRadius acquisition of Forensiq• PepperJam acquisition of AdAssured• Zeta interactive acquisition of Acxiom Impact

September 2016 26

One person’s view on where the market is headed, cont’d.

Compliance• Advertisers are getting better tools and driving higher standards• Filters are getting smarter; less poor quality mail to the inbox

• The absence of a plain-text postal alone nearly stops a message from inboxing

Email• More dollars flow into the channel as the standards and tools are enhanced• Heavy trend toward mobile opens, and emphasis on mobile experience

• According to Litmus, 56% of email is opened on mobile devices• Affiliate email sending has shifted significantly to ESPs• The trend continues toward increasingly customized and optimized B2C email

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An example of products in development

September 2016

• Provide advertisers with a broader view of their partners’ sending practices• Layer into this:

• Custom-weighted quality measures (blacklisting, authentication, subject and from line issues, vulgarity, unsubscribe issues, volume of messages per recipient, etc.)

• Insights on volume, vertical and delivery

Broader: All mail sent by publisher (“level 2”)

Broadest: All mail sent on IPs used by publisher (“level 3”)

Narrow: All mail sent for advertiser by publisher (“level 1”)

September 2016 28

Wrapping up

1. Email outperforms all other channels.2. The compliance and policy risks are manageable.3. Addressing the issues not only reduces risk, but improves delivery.

Some of the most common issues are easily remedied – postal, opt-out, proxy domains, etc.

4. The market is rapidly evolving toward higher standards and greater transparency.

September 2016 29

Questions and contact information

I appreciate your time and welcome any questions.

Peter WilsonChief Executive OfficerLashBack, LLC1017 Olive Street, 4th FloorSt. Louis, MO 63101

peter@lashback.com

314.754.2286 (office)