PennMedia to Launch Content Syndication Firm

E-mail newsletter ad network PennMedia said Thursday that it will form a new email marketing company, called Relatemail, to sell private-label versions of PennMedia’s newsletters.

Through a joint venture with marketing services firm Prosper Business Development, Mokena, Ill.-based PennMedia will offer businesses the opportunity to use newsletter content to develop their relationships with customers.

PennMedia handles ad sales for about 800 newsletters covering a variety of topics, including jokes, recipes, travel tips, and investment advice. Through the new company, Web sites whose customers are interested in particular subject areas can distribute newsletters, which carry the Web site’s branding, on those topics. The company didn’t disclose how the newsletter publishers would benefit, but presumably there would be a revenue share.

“As email marketing expenditures continue to grow, marketers have recognized they must get beyond pure self-promotion and vanity email,” said PennMedia chief executive officer Jaffer Ali. “E-mail fatigue is a real issue now facing marketers. Consumers are becoming put off by the torrent of ads in their inboxes, just because they checked a box sometime in the past.”

Marketers “need customer relationship tools that increase brand awareness and enhance customer relationships in an unobtrusive and cost-effective way,” he said.

The new venture’s founding companies are thus banking that PennMedia’s newsletters make a compelling incentive for affiliates’ visitors to sign up, and an enticing reason for marketers to buy into the program.

“They’ll be the only advertiser in those newsletters, which will be branded with their name, delivered from them, and contains only their promotional announcements,” said Prosper president Gary Drenik. “It gives them access to a phenomenal infrastructure.”

Drenik said the new venture came about in response to email marketers’ need for what he termed “a higher degree” of relationship marketing.

“It’s not going out to rent tired lists — this is somebody saying, ‘I want to get that newsletter because I want the content.’ And it’s private-labeled, so [marketers] build an affinity and manage the affinity through the content,” he said.

The companies also said Relatemail’s clients will be able to advertise at a discount rate across PennMedia’s newsletter ad network.

Relatemail will be based out of Prosper’s Columbus, Ohio headquarters. Prosper is in the business of providing marketing consultation and productivity services for clients including ADVO, Gannett Magazines and Sprint.

Prosper and PennMedia will each own a half of the new company. Additional financial terms of the venture were not disclosed.

However, the deal does mark PennMedia’s second recent vertical investment. In September, PennMedia announced it had taken a majority stake in SendOutMail.com, a startup newsletter distributor for publishers of opt-in email newsletters.

Thus, in addition to creating, distributing and repping its newsletters, Thursday’s deal gives PennMedia an additional way to monetize and broaden its readership.

“Because we so strongly believe that email newsletters are the best online medium, we are actively investing in new ventures that will enable us to continually provide the full spectrum of newsletter marketing solutions,” Ali said.