Brave new ISP Premium Services – a business model for the future?
Classic email marketing is easy: There’s three parties, and everybody wants to get a piece of the cake: The Marketer, the ESP and the ISP.
- The Marketer is making money by selling products. They are paying their Email Service Provider.
- The Email Service Provider (ESP): Is paid by the Marketer, usually with a CPM-based model (the more emails are sent / delivered, the more money is paid).
- The Internet Service Providers (ISPs) are offering free mailboxes to end-users and make money with more or less personalized display advertisement.
There have been voices already in the past, but now they are getting louder: ISPs wanna get a bigger piece of cake now arguing with increasing cost and finally “paying the party” while the others make the big money. Especially local ISPs have hard times to concur more with the growing GMail, Yahoo and Microsoft Services.
The new idea is “paid Premium Services“. While the polish provider “Wirtualna Polska” (WP.pl) operates with a CPM-based model for a few years already, ItaliaOnline (IT) and Interia (PL) just launched their programs recently.
So far so good – ISPs are starting to demand a bit of money from ESPs, and they will have to forward the cost finally back to the Marketers. It will be interesting to see, if this new model will be accepted, and keep the local ISPs alive – or if it will even accelerate the movement of mailbox-owners towards the dominating international ISPs.
From an ESP perspective it might get challenging to pay several ISP services and manage the cost individually with Marketers based on where they are sending to, but on the other hand it will be also the first time, that ESPs have a direct contractual relationship with ISPs. In case of delivery issues there might be a better collaboration with a new common interest to actually deliver mail in the inboxes. But is paid content also always wanted content in the eyes of the end-user- or do we have a conflict here!? This will be an interesting question, that might influence the story a lot.
A good and well-established alternative are classic certification programs like Return Path (being acquired recently from Validity) or the the Certified Senders Alliance, Signal Spam and similar. Those kind of programs (or whitelists) usually have to be paid as well by senders, and along with a reasonable reputation, they will have delivery advantages with a bunch of participating ISPs. But again – the more parties share the same cake, the smaller the pieces and that’s probably why we won’t have just one global “Premium Service” in the near future.
As much as people are appealed by the one 100% solution: there is none so far and most likely in the near future. Advice to the Marketers is to chose an ESP of trust and let them negotiate the details.
For ISPs and ESPs it might lead at least to further discussions, understanding each other’s challenges and pain points and probably making each other’s lifes easier. Let’s be positive and expect all the best 🙂