How Would An Email Tax Change Email Marketing?

On April Fools’ Day, Forbes ran a story about how Congress was considering a tax on email by amending the Internet Tax Freedom Act the next time it comes up for renewal. It was a great gag, and while I think there’s zero chance of any kind of email tax coming into being, it’s interesting to think about how the email marketing industry would change if some kind of tax were levied.

Possible Tax Schemes

About 10 years ago, I thought the email industry might actually benefit from having additional costs associated with sending. At that time, malicious spam was still a significant problem. Since then, ISPs have done such a stellar job of eliminating traditional spam from inboxes that the definition of the word “spam” now means something entirely different: email consumers no longer want, even if they opted in to receive it.

That said, illegitimate email still represents 95% of all email volume. That’s a lot of email for ISPs to filter through to get down to the 5% that’s legit. Even a tiny tax on each email sent would collapse any centralized sending of spam; however, it might be less effective in tackling the bot networks that are responsible for much of the spam that’s sent today.

Of course, part of the trick is how to actually implement a “tax” on email. One way would be through a bonded sender program, which would allow a few different schemes. For instance, each sender would post a bond, and every time recipient complaints exceeded an established threshold, money would be taken from the bond. When your bond runs out, all your emails get blocked until you replenish it. So essentially this would be a tax on spam and unwanted or irrelevant email.

Another way of using a bonded sender program would be to charge a tiny amount for each email delivered. That would instantly change our tolerance levels of inactive subscribers.

A twist on these ideas would be for the U.S. Postal System to start a white label email system. Just like with snail mail, you’d pay for postage –and through a revenue-sharing program with ISPs, you’d get guaranteed 100% deliverability.

In all of these cases, you pay money upfront to avoid potential deliverability problems that would otherwise directly cost money to fix through remediation, and indirectly cost money through the revenue lost from blocked messages to your subscribers.

The Current Tax on Email

The central tension in email marketing is that our subscribers’ time is far more valuable than the pittance it costs us to send them email. In my book, “Email Marketing Rules,” I refer to this as email marketing’s cost-value gap. Marketers fill this gap by sending relevant emails to subscribers who want those emails.

When marketers don’t fill that gap, they invariably suffer deliverability problems from high complaints and low engagement. This is essentially a tax that subscribers impose on marketers for wasting their time. And it’s a tax that marketers can largely avoid by (1) putting in place sensible permission practices and sound collection processes across all their email acquisition sources and (2) using personalization, segmentation, triggered emails, and other tools to consistently send individually relevant emails.

It’s this ever-rising tax imposed by subscribers that’s the reason email marketing is no longer cheap. If you focus on making your emails smarter and more relevant, you not only reap the benefits of higher returns and higher customer satisfaction, but also minimize deliverability taxes.

How Would An Email Tax Change Email Marketing?