Livingsocial had hired some (very talented pilots) to do dot matrix skywriting as advertising.

It was quite impressive, actually. Mostly because the pilots were so technically precise, but also because they were conveying useful information in short phrases.

Besides the “Livingsocial loves you” shown here, we also saw deals and even a URL at one point. There was enough breeze over the bay that messages didn’t hang around long (the blur going from top left to bottom right is writing from the pass about 5 minutes earlier). But it was eye catching and there were tons of people taking photos.

It would be interesting to hear how effective a campaign this is. Does Livingsocial see signups as a result of skywriting? Or is this just general brand awareness on their part?

As an aside, the cousins said they received emails from both Livingsocial and Groupon, but that Groupon just sent so much mail it was getting annoying.

The full report is well worth a read, but the take home messages are clear.

First, your email program can play a critical role in alerting your subscribers to changes in operations, winding down operations or liquidation sales.
Oddly, bankrupt retailers usually give anonymous website visitors more information that they give to email subscribers. This is a huge missed opportunity to drive sales, and it’s also disrespectful to your brands’ most loyal customers. The time during which you’re liquidating or exploring your options is a poor time to alienate dedicated subscribers.
And second, and even more importantly, brands that appear to be headed for extinction often find a second life. Examples include the rebirth of Pets.com as a community site run by PetSmart, the takeover of CompUSA.com by TigerDirect parent Systemax, and the rescue of RedEnvelope by new owners. Because of this, maintaining email relationships with your best customers is critical to preserving the value of your brand as much as possible during a transaction.

One thing that was clear to me while I was looking at the report, is that the companies who did things badly weren’t thinking about email marketing as one of their assets during the shutdown process. In one case, the company never even mentioned they were going out of business in their email marketing, the mail just stopped one day. This same company prominently mentioned the going out of business on their website, so it was clearly a failure of the marketing department to communicate over email.

As an aside, Smith-Harmon have their own email marketing program well managed. When I downloaded the report, I agreed to receive email from them. Within 5 minutes of me signing up for the program I received a welcome message welcoming me to the program, giving me some real content and not relying on images. Kudos to them for walking the walk.

I am sure, if asked, all the advertised companies would say they have no knowledge of spamming by their vendors. I’m sure they would say that their vendors tell them I opted in to the email and must have just forgotten. I am sure that this isn’t really spam.

Except it really is spam. Real companies with real brands do use the services of spammers. When caught they loudly protest their innocence and talk about rogue affiliates. In the best cases they will “fire” the affiliate and then look the other way when the affiliate signs back up.

Spam is sending mail to people who never requested it. Hiring someone to do it for you doesn’t mean you aren’t a spammer. With the economy tanking and companies trying to maximize their bottom line, more and more name brands seem to be jumping on the spam bandwagon. It is not an unexpected development, but it will mean more aggressive spam filtering and more difficult email delivery for everyone.

Briefly, once you sign up with this company, you set your mail client to use their SMTP server. As all of your mail goes through their server is it “wrapped” with a HTML template of your choosing. All of your email is now branded with that template, allowing you to formally advertise your business even during the course of standard business communications.

There are multiple ways this can negatively impact a specific brand.

1. Sending a branded email to someone is like going to their house to sell them something. Sure, they might be polite to you and not throw you out on your ear, but they’re going to think about inviting you over again. Email senders should always be cognizant of intruding on their recipients.
2. People hit the “this is spam” button for a lot of reasons, including they don’t like how an email looks. Shiny, branded emails may be good for a first contact, but recipients may get tired of the clutter during ongoing discussions and communications.
3. The company provides identical templates for various franchises. This means that mail from different franchise owners will look very similar to each other. This may cause recipient confusion when they try to remember if they opted out of a specific email. If they think they did, or they opted out of someone else’s wrapped email, they may resort to hitting “this is spam” instead of  didn’t I opt out of this?

Overall, I think this type of aggressive branding can work, but has enough challenges and pitfalls that without a clear plan for use it, this may end up being just the kind of negative branding Seth Godin was talking about last week

There are also a number of delivery concerns involved.

1. WrapMail users are all sharing a smarthost. This means that if one over aggressive user decides to send mail to their entire address book, or to that list of qualified leads they purchased for $99.99, then that negative reputation is going to spill over onto the mail of other WrapMail users. One or two bad customers is going to hurt all customers.
2. Even if every WrapMail user is only uses this for personal email, and never sends bulk or unwanted mail the reputation of the smarthost may be compromised. Some viruses are stealing credentials and sending mail out through smarthosts. One WrapMail user missing one critical virus update can get the smarthost IP blocked on public lists and cause major delivery problems for all their users.
3. Because of the shared smarthost, WrapMail users cannot sign up for whitelists or feedback loops. While these are not always useful or necessary for corporate mail servers, they can be helpful. Particularly in this case where visual markers in the mail may confuse some recipients into thinking this is some sort of bulk mail.
4. Each WrapMail user will need to understand the implications of wrapping email with advertising. CAN SPAM applies to commercial email whose primary purpose is advertising or promoting a commercial product or service. Wrapping advertising around an email may turn a normal business email into an advertising email and thus subject to the limits applied by CAN SPAM.

Overall, I think this may be a tricky business model for WrapMail to succeed with. The underlying premise is actually quite good: one to one email tends to be much more relevant to individual end users. Why not add some advertising to those highly relevant and wanted emails? This is exactly the type of mail companies should send.

It remains to be seen if WrapMail can manage their customers in a way that minimizes abuse and maximizes delivery. In an ideal world, there would be no delivery problems from this type of setup. The world of email marketing is less than ideal.