June 29, 2001, 12:00 AM

Video e-mails make a blockbuster debut in Internet retail marketing.

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Rates 20x higher



Philadephia-based TMX Interactive, a three-year veteran of the e-mail technology market, has upwards of 60 clients, including Liz Claiborne Inc. and Estee Lauder Companies Inc. Response rates for video are between 15% and 30%, compared to 7% on HTML messages and 3% to 4% on text messages, TMX says. TMX says its service costs only about 3 to 7 cents per e-mail. “It’s a little more expensive than HTML or text but the response rates are worth it,” says Lyon.


Storymail, which was founded in March 2000, says it has about six pilots lined up. So far it has run a campaign with Mars Inc. and NASCAR, which sent video e-mails to 7,500 consumers. The click-through rate was upwards of 15%, which officials say is about three times that of other e-mail results.


Storymail aims to license its technology to companies who send a large volume of e-mails. Pricing starts at $35,000. Eric Sternberg, vice president of marketing, points out that this technology costs about a quarter of the cost of streaming video technologies that require high bandwidth applications.


While vendors claim that video is a better way to engage consumers in a marketing message, the most crucial part of video e-mail is delivering the message to the consumers in a format they can read. But there are different approaches to the technology. And because video e-mail is new no technology has emerged as a leader. The ongoing argument is whether messages should be embedded into the e-mail or delivered by streaming video through an Internet connection.


Los Gatos, Calif.-based Storymail uses the video embedding technique to deliver its messages. “The quality is guaranteed because it doesn’t play until all the content is fully loaded and is not broken up with bandwidth downloads,” says Timo Allison, director of market development. However, it is possible that it could take too long for a recipient to download a message, a factor that can make marketing efforts useless. But Allison says that while there is a risk of losing the customer the technology gets around the obstacle by using software that can identify what a recipient can download. The software, called Storymail Teller, pops up when a recipient gets his or her first message from Storymail. The recipient has to download the program. Sternberg says that two-thirds of the people who are given the downloading option choose to install the Teller software.


Storymail officials say they built the company to address limitations in e-mail technology-mainly that not many people are on high-bandwidth connections and can access rich video graphics. Storymail chose to cater to the lowest common denominator by developing its embedded video and Teller software that adjusts the video content to lower bandwidth users. “We’re able to address and reach all e-mail software devices out there,” Allison says. Vendaria also embeds the video.



Cleaning up the lists



Other video e-mail vendors, such as TMX Interactive and MindArrow, deliver video e-mail through a recipient’s Internet connection as the recipient is viewing the e-mail. The companies use sniffer technology to identify what type of connection a recipient has and then delivers the appropriate version of the message. The concern with this approach is that recipients with slow modem speeds will not view the message or not view the same message as others with faster modems. “Once we see what the end user needs we serve them a scaled down version of the message and that’s the most important thing that the marketer wants,” says Lyon.


Lyon adds that some clients who want to send e-mails to their own lists often find that the list does not contain the types of customers it expected. He says sniffer technology can help retailers identify facts about customer lists such as modem speed, location and type of customer. “We can tell the client how good their lists are and help them fine tune them,” he says.


Even though video e-mail marketing is coming on fast now, it wasn’t fast enough for some pioneers. Radical Communications, which launched in March 1999 with the first such video e-mail application, shut down operations in June because it was running out of money, although it numbered among its clients such well known brands as Express.com, Lee Jeans and Old Navy.



But with the concept of Internet time intact, it’s probably only a matter of months before some great new twist changes the video e-mail market.




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