Unlike conventional unsolicited e-mail known as spam, where ads arrive in someone's in-box as separate e-mail, the new Admail technology from Melbourne-based Revo Networks places advertising within the body of the message regardless of its origin.
Revo CEO Robert Pickup said the company's partners and customers include free, Web-based e-mail services that generate revenue through advertising as well as conventional POP e-mail services, in which messages are received and held by an Internet service provider's server.
"We're in discussions with many ISPs and advertisers," he said. "It's fair to say that interest has been very strong."
Pickup added that Admail has proven to be more effective than other forms of online advertising.
"Because the advertising is embedded within a regular e-mail and not a separate e-mail message from an advertiser, users are more likely to open the message and hence be exposed to the advertising offer," he said.
But David Bather, public relations manager for Net access provider OzEmail, warned that online marketers must be highly circumspect about the consumers' privacy concerns when adopting e-mail-based strategies. With Admail, promotions could hitch a ride with subscribers' regular correspondence, and the receivers may not have the choice of filtering out the unsolicited portions of e-mails.
"Something like this would have to be scrutinized very carefully," Bather said. "I think it's important to give consumers an opt-out function."
Pickup said filters are not applied to the Admail service by Revo.
Filtering "is up to the ISP or the partner, but an opt-out function is likely to be provided in that case," he said.
Charles Britton, information technology policy officer for the Australian Consumer Association, is critical of any electronic advertising that places consumers in a reactive position.
"We'd rather see an opt-in than an opt-out" he said, speaking on behalf of the association.
Pickup said he doesn't believe consumer ire will hinder the success of the technology. According to the company's research, people aren't angered by e-mail advertising "as long as it's relevant to them." He said early trial results of the technology did not provoke any negative feedback from e-mail users.
"It's obviously not upsetting people in any way," he added.
Britton, however, said he doesn't believe people will passively accept the new form of online advertising. "Without some incentive, why would you want advertising in your e-mail?" he asked.
Observing the negative reception that spam receives from the Internet community, Britton said advertisers themselves may ultimately decide the fate of the technology.
"Advertisers are reluctant to be associated with anything that irritates consumers," he said. "There's not many successful business models based on annoying people."
Staff writer Andrew Colley reported from Melbourne.