Canada should take the lead in the War on Spam. A coalition of government, corporate, and media agencies should introduce a prime-time television/radio advertising campaign urging consumers to boycott spammers and their usually overpriced and ineffective products: Internet users should never buy merchandise pitched in unsolicited
e-mail. When e-mail marketers cease to turn a profit, we can expect less spam.
We must appeal to the grass-root end users.
A relevant article from today's New York Times follows below.
Max Ledbetter
July 4, 2003
E-Mail Hucksterism, Offensive but Effective
By SAUL HANSELL
Every medium seems to have its signature hucksters, with advertising
messages that are annoying, repetitive, improbable — yet somehow
successful.
Ads in comic books once promoted Charles Atlas's Dynamic-Tension exercise programs. Late-night television sold Ronco's Veg-O-Matic food choppers. And in today's online world, if an e-mail subject line says, "Does Size Matter?" or "Increase Your Self Esteem," odds are that it involves an offer for pills promising to make your penis larger.
The unregulated herbal pills are highly profitable — they cost as
little as $2.50 a bottle to produce and sell for $50 or more — and the
marketing mechanism is cheap: an elaborate sales effort of millions of
unsolicited e-mail messages, or spam, each day.
Carrying medically impossible promises, a few million bottles of the
pills are sold annually by at least 50 companies, according to pill
makers and dealers, producing revenue of more than $100 million a year
for the so-called male enhancement industry.
"Every man feels he could use a little more sexual power, size and
stamina," said Gil Gerstein, co-owner of Eye Five, of Van Nuys, Calif.,
the maker of VP-RX, one of the most widely advertised brands.
The torrent of such messages is no small factor in a bipartisan push
for new federal legislation to restrict unsolicited e-mail.
But as Congress considers laws to crack down on spam, the decentralized
structure of the e-mail marketing industry shows how difficult the task
will be. Most pill makers, like Eye Five, sell their products
indirectly, through thousands of independent affiliates, a technique
pioneered online by Amazon.com. A dozen affiliates can end up mailing
the same message to similar lists of e-mail addresses, confounding
millions of computer users, including women, with multiple copies of
messages both inappropriate and unwanted.
The spammers are generally very small outfits, which hide their
identities by bouncing their messages off computers in countries with
lax regulation. The pill makers are more visible, defending themselves
by insisting that they have strict policies against spamming by
affiliates. They concede, though, that spammers often evade those
policies.
"It is impossible for us to control the marketing of all aspects of our
products," Mr. Gerstein said.
The pills are typically the same cocktail of herbal ingredients — like
yohimbé bark and horny goat weed — that are sold in health food stores
as sexual stimulants. These ingredients may indeed affect sexual
arousal, though not as much as prescription drugs like Viagra, said Dr.
John Bancroft, who runs the Kinsey Institute at Indiana University. But
they cannot permanently change the size or shape of a body part, he
said.
The marketing of products to improve male sexual performance did not
start with e-mail. It goes back to the beginning of the mail-order
business, when merchandise of this sort was shipped to customers in
plain brown wrappers. Men's sex magazines have long carried ads for
stimulants like Spanish fly (pulverized blister beetles) and
enlargement devices like vacuum pumps.
By now, though, sexual accessories have moved out of the shadows and
are discussed on cable television shows like "Sex and the City."
"Our whole industry is growing steadily because it is becoming
mainstream," said Ken Thomas, director of marketing for Topco Sales, a
leading maker of vacuum pumps and sex toys. (Topco does not sell penis
pills, he said, because they do not work.)
Critical to the success of the herbal-pill makers was the approval of
Pfizer's Viagra by the Food and Drug Administration in 1998, and the
mass-marketing campaign for the drug. "Pfizer opened the door by
putting erectile dysfunction on prime-time television," said Malcolm
Casselle, chief executive of Elima Biotronic, the maker of Opus-X, an
herbal concoction that is marketed as increasing sexual pleasure.
Mr. Casselle was a founder of NetNoir, a Web site for blacks, and an
executive at Pacific Century CyberWorks, the highflying Hong Kong
Internet company that crashed in 2001. Sex pills, he said, seemed like
a natural opportunity.
"You have a marketplace with no credible players — there is all that
spam and late-night infomercials," Mr. Casselle said. "The market is
ripe for consolidation, like coffee houses before Starbucks." The total
market for all sorts of herbal sexual pills, he estimates, is $1
billion to $2 billion a year.
The first penis enlargement pills were introduced about five years ago
by companies like HerbalO, of Chatsworth, Calif., and CP Direct of
Phoenix, maker of Longitude. They were sold in men's magazines and on
late-night TV, but soon migrated to the Internet, where there are
almost no boundaries on taste or language.
Scott Richter, president of OptInRealBig, which sells sexual products,
remarked, "A lot of people would be embarrassed and wouldn't walk in to
the Walgreen's and say, `I want to buy penis enlargement pills.' I
wouldn't."
The affiliate programs, created first to sell the pills on sexually
explicit Web sites, were quickly taken up by senders of spam. People
who had lists of e-mail addresses could count on being paid $20 to $50
for each pill order, with the distributors providing the graphics and
sales pitches used in the e-mail.
"Unfortunately, spam is a cheap game to get into," said Michael Clark,
managing partner of Herbal Partners, which sells more than 300,000
bottles a year of Herbal Vigor pills, largely through affiliates. A
marketer, he said, could arrange to send millions of spam messages a
day through a computer in Eastern Europe for $1,500 to $3,000 a month.
And a list containing 10 million e-mail addresses can cost just a few
hundred dollars.
"That means you only need to take in $150 a day to break even," Mr.
Clark said. "If you can send out 10 million e-mails a day from your
bedroom, and you make $50 a bottle, you can make a decent profit."
Most spammers, moreover, are affiliates for dozens of other kinds of
questionable merchandise — cable descramblers, credit-repair schemes
and other pills with dubious claims, like coral calcium, human-growth
hormone and illegal generic Viagra.
Mr. Richter said the biggest spammers take in $5,000 to $10,000 a day
selling penis pills. His company and Mr. Clark's Herbal Partners, among
others, say they have policies restricting e-mail marketing to people
who request it.
"If we have an affiliate and we get even one angry spam complaint," Mr.
Clark said, "we will cut them off and stop paying them." But he
acknowledged that a spammer with modest technical skills could create a
chain of untraceable Web sites so that complaints never made it back to
his company.
If hundreds of spammers are mailing to the same lists of names, hasn't
every potential customer bought a bottle already?
Not really, Mr. Clark says. "Wouldn't you think that at some point,
Pepsi has already reached everybody who would possibly drink Pepsi? But
they keep advertising," he said. With the pill messages, "guys delete
it and delete it and at some point, they start to wonder."
In addition to spam, there are hundreds of Web sites devoted almost
entirely to male enhancement, serving an eager if selective audience.
In May, Overture Services, a search-engine advertising firm, counted
117,332 searches for the term "penis enlargement" on its network, which
includes Yahoo's and Microsoft's search sites — fewer than the 141,267
searches for "New York Yankees" but far more than the 30,568 searches
for "New York Mets."
One site, PenisResource.com, was started in 1999 by David Wolfe, who
was 17 at the time.
"I needed to make money and I was looking for a very easy, not very
competitive market, that had a lot of traffic," Mr. Wolfe recalled in a
telephone interview last week.
After selling 35,000 copies of an electronic book he wrote on the
subject, he turned to selling pills as a more lucrative activity,
signing up for the affiliate program of a company that does business as
Albion Medical and sells pills under the Vig-RX brand.
Mr. Wolfe sold his site, which now gets more than 40,000 visitors a
week, to the company behind Albion, called Leading Edge Marketing,
which Mr. Wolfe says is run from Vancouver, British Columbia. "I
decided I would rather not be involved in what isn't the most ethical
of industries," he said.
Officials of Leading Edge declined to discuss their business, or even
their whereabouts, when contacted through their advertising agency,
Soho Digital of New York. Their Web site says they are paying marketing
affiliates $1 million a month, which if true would mean total sales at
least two to three times that.
The federal government, meanwhile, is prevented from clamping down on
misleading ads for such products because the law excludes nutritional
supplements from having to meet the same standards of safety and
effectiveness as drugs. As with other herbal supplements, states are
beginning to step into the breach by regulating sales claims and
practices regarding these pills.
Last year, CP Direct, the creator of Longitude, was shut down by the
attorney general of Arizona after users complained that they were being
charged for reorders they did not want and were not receiving credit
for refunds. The company had generated $74 million in sales, almost all
from Longitude, to more than 350,000 customers over two years.
Still, with all those people buying pills, why don't more men — or
their partners — complain about misleading claims of penile
enlargement?
Mr. Clark, of Herbal Partners, says that his company has sold several
hundred thousand bottles and has had fewer than 50 requests for
refunds. One reason is that while the pills do not alter physiology,
specialists say the concoctions can have a stimulating effect that some
people enjoy.
"Right away, you feel an increased sensation and feeling of sexuality,"
asserted Mr. Gerstein, who says he took his VP-RX for several weeks.
And some pills have been found to illegally include the active
ingredient of Viagra.
Dr. Bancroft of the Kinsey Institute said there had been a lot of
research into yohimbine, a major ingredient in most of the pill
formulas. It is a sexual stimulant, he said, "but it is
pharmacologically rather messy and not as good as newer drugs."
But the biggest reason complaints are so rare may be the desire to
avoid embarrassment.
"Who is going to take a penis pill maker to court," asked Kevin Blatt,
a former marketing executive at HerbalO, "and go in front of a jury of
their peers to say, `I bought a bottle of pills to enlarge my penis and
they didn't work?' "
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