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WHILE THE PAST past several years have seen publishers employ increasingly sophisticated database techniques in the effort to maintain readership and find new sources of revenue, many experts predict that the early years of the millennium will mark an even greater watershed in magazine sales and marketing.

It is then, the thinking goes, that the advanced database marketing techniques perfected over the past half-decade will be fully integrated with mature Internet technologies, giving marketers and circulators the ability to take their campaigns to entirely new levels in terms of reach and customization.

Indeed, according to a recent survey by the Direct Marketing Association, ninety-five percent of direct marketers who responded report using the Internet and World Wide Web for sales or marketing applications, up a whopping 83 percent from just one year ago. And more than half say they make use of online services, up from 43 percent in 1998. Meanwhile, slightly over half use EDI, up from 45 percent in 1998. In addition, 39 percent say they are using e-commerce technology in marketing their products and services.

All this, to some extent, is to be expected, as many new Internet tools have recently come on the market and a number of publishers report using them with considerable success.

And not surprisingly, many of these efforts are built around e-mail, perhaps the most easily accessible, ready-to-use Internet technology in use today. As a way to interact with readers and potential subscribers, e-mail offers a number of advantages: it is quick and relatively inexpensive, and it can be customized right down to the level of the individual. Already, numerous publishers are taking advantage of these attributes to craft e-mail subscription and renewal campaigns.

"We're starting out with a very simple message that says your subscription is up for renewal," says Tom Burke, director of consumer marketing databases at New York City-based Conde Nast. Burke whose company publishes such high profile glossies as The New Yorker and Vanity Fair, says a direct e-mail campaign is most effective when the message contains a link to a Web page on which readers can renew their subscriptions: "We provide a link where they can click on a URL and all they have to do is check a box on the page that comes up and the renewal is processed," says Burke.

Meanwhile, John Dagney, director of subscription promotion at Hachette Filipacchi, says he expects direct e-mail to play an increasingly larger role in his efforts to boost subscription and renewal rates. "We're testing direct response mechanisms; we're trying a discount price and soft offers at a premium," Dagney says, adding that, "We're also trying to design the sites so that visitors are more likely to provide credit card information. These tests are designed to give us benchmarks against which we can improve our future efforts."

JUMPING THE HURDLES

But before e-mail can completely replace paper and stamps as a direct marketing tool, experts say a number of commercial and technological hurdles will have to be overcome. On the technology front, the biggest barrier to sophisticated, database-powered direct e-mail campaigns is the fact that many e-mail systems, the majority by some estimates, are proprietary in nature and not fully integrated with the Web. Users of such e-mail systems who receive, say, a message containing a link to a subscription site, would have to cut and paste that link into their Web browser before they could get to the page--a cumbersome process that can significantly dampen response rates.

Additionally, HTML (hypertext mark-up language), the programming code that has been used to create the vast majority of Websites in existence today, is essentially a static environment. That is, while it is capable of incorporating hyper-links to other Web sites, it's not capable of much else. Thus, there is a limit to which pages authored in HTML can be used for advanced functions such as automatically linking a subscriber's e-mail to a database containing their subscription history and credit card authorization data.

On this front, however, hope is on the horizon. New, intelligent programming languages--such as Java and Pearl--are gaining in popularity among Web site developers, and these languages are vastly more functional than HTML. "It used to be that HTML programming ruled the Web," notes Pat Gray, director of Internet Services at Centrobe. "But the more sophisticated interactions will require pages that are Pearl scripted or Java scripted so that you can get some intelligence built into the page. HTML is basically a brain dead language."

As John Rockwell, corporate circulation director at San Francisco-based Miller Freeman puts it: "As soon as everyone's technology improves, and it becomes painless to go from Web-browsing and e-mail, that's when we'll see this really take off." He adds that, "We're putting a lot more e-mail projects into everything we do next year."

Another challenge to constructing an effective e-mail campaign is list hygiene. While consumers may move, say, once every six or seven years, many change e-mail addresses several times a year, especially if they are prone to switching from one ISP to another. That means there is a good possibility that the e-mail address provided by a subscriber when he or she signed up may no longer be valid when it comes time to start a renewal series. "As a rule of thumb, e-mail address validation should be done every 90 days, as there is a much shorter shelf life than with traditional information," says Gary Laben, VP/marketing at Experian. However, Experian and other database service providers are now coming to market with systems capable of automatically testing the validity of e-mail addresses at predetermined intervals.

COMMERCIAL CONCERNS

Beyond technological matters, observers say a number of commercial considerations will have to be resolved before e-mail marketing can reach its full potential. Among these, the biggest issue is privacy. It is generally agreed that the privacy practices governing the use of traditional direct mail should be applied to direct e-mail. However, for the most part, mechanisms to ensure this are not yet in place. For instance, while there is a growing number of companies providing bulk e-mail addresses, there is as yet no equivalent to the DMA's Mail Preference and Telephone Preference files against which purchasers of these addresses can check for opt-outs.

As a result, many magazine circulators and marketers say they are leery of using third-party e-mail addresses for subscription campaigns. Says Conde Nast's Burke: "We are not renting our e-mail addresses out. We give people an opt-out option, and our policy right now is that we are not renting out. We haven't decided yet how that fits with our overall privacy initiatives, but we are very conscious about the controversy over renting e-mail addresses. I'm not going to say that we will never do it, but we are taking it slowly. Some of these e-mails that were collected in the past did not have the opt-out option, so we want to bring everything to the same level. If we feel comfortable that we've satisfied the privacy needs of our subscribers, only then will we look at it as a possible revenue stream."

Indeed, experts advise that any e-mail collection method include a visible opt-out mechanism that will give customers the choice as to whether their addresses can be given to third parties. Says Jerry Okabe, VP/circulation at Miller Freeman: "We really haven't got e-mail addresses from our advertisers because of their own issues about how they gathered those e-mail addresses." He notes further that, "The basic policy at Miller Freeman is, if you supply us with an e-mail address, and we told you what we were going to do with it, and gave you the option of being opted out of any specific thing or everything, we can then use it generally within the company. So if you responded to Dr. Dobb's Journal, and we got your e-mail address, and we had done that disclosure to you, we might e-mail you about Software Development magazine. And that would be how we would get new business for each of those properties."

Okabe says the whole e-mail privacy debate is a hot-button issue that circulators should pay close attention to. "Right now we tend to be very cautious about how we do all this," he says, adding that, "This is because of the ongoing screaming of anti-spam activists of all stripes, as well as generalized privacy concerns of our own."

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