AOL, Yahoo gear up to charge e-mail ‘postage’

The average postal customer receives perhaps 150-pounds of junk e-mail every year. The reason that it’s not thousands of pounds of junk mail is simple economics: the sender of the junk mail must pay for the creation, printing and postage of the stuff they send. The costs dictate that the senders must provide you with their materials only if they expect a reasonable likelihood (even if it’s only a 1% chance) that you’ll become a customer. That’s because there is a variable cost component to what junk mailers do – every piece they send costs them something.

Spammers, on the other hand, don’t live within that reality. The cost of spamming is almost entirely fixed. Telecommunications links, computers and software cost the same to send 100,000 spam messages or 10 million. Plus, via the use of zombies, the cost of sending spam drops to virtually nothing.

Many have talked about charging ‘postage’ for e-mail as a means of combating the spam problem, but there has been resistance to this idea on a number of levels. However, last week AOL and Yahoo announced plans to implement a program to charge mass mailers up to 1 cent per e-mail for unfettered delivery to subscribers’ inboxes. Senders who pay this postage fee will not have their e-mails processed by spam filters as long as the sender guarantees that their recipients are truly opt-in recipients. Non-paying senders can still send their e-mail, but will face the risk of having their messages blocked by each company’s spam filters.

The advantage of such a system is clear: spammers won’t be able to afford even a quarter-cent charge per e-mail given that their response rate is typically extremely low. For example, if we assume that a spammer gets a sale from one out of every 30,000 messages they send, then each sale would have to be $75 in order for the spammer just to break even. That means that senders paying postage are delivering content that recipients actually want.

I believe that the most useful applications for the AOL/Yahoo postage system will be with businesses that already have a relationship with recipients, such as credit card customers, online banking customers and others. The system is unlikely to be all that successful for marketing to new prospects given the high cost of sending e-mail and the relatively low return that such campaigns normally bring, but that’s really the point of charging postage for e-mail in the first place.

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