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in email marketing
The trick: Getting through without turning off users
By Marty Beard
With the threat of anthrax reaching epic proportions, some leading marketers are understandably wondering if consumers will ever again open unsolicited envelopes without some worry.
Those concerns, along with the looming recession and the slashing of marketing budgets, are increasingly making email look like an attractive and inexpensive alternative to direct mail.
Yet email marketing is not problem-free, nor is it going to entirely replace mailed-delivery marketing pitches, according to a recent study by Jupiter Media Metrix.
Spending on email marketing is expected to grow dramatically in the next five years as it gains increasing acceptance among consumers.
Yet that growth by its very nature will present email marketers a major challenge: How do you get your message through all the clutter and read by the people you most want to reach?
In sum, marketers will be facing many of the same problems they've faced over recent years with land mail, until the anthrax scares began a month ago.
"Email marketing absolutely works, with the caveat that there are going to be a lot more email marketing messages in people’s mailboxes over the next couple of years," says Jupiter Media Metrix analyst Jared Blank.
"Emails, while inexpensive to send out, can be very expensive for a company if they’re not used correctly."
Total spending on email marketing is projected to reach $9.4 billion in 2006, compared to $1 billion this year.
Spending on email marketing campaigns to keep existing customers should hit $4.7 billion in 2006, up from $580 million this year.
About a third of companies surveyed by Jupiter Media Metrix say that more than 5 percent of their overall marketing budgets was allocated to email marketing this year.
A major problem marketers will face is the rise of unsolicited junk email--spam. In 2006, the average user will receive 1,400 spam messages, with some 206 billion spam messages sent out over the year, according to the Jupiter Media Metrix study.
And as volume rises, both for spam and opt-in messages, consumers are reacting as expected.
An August report from Forrester Research revealed that in 2000 half of the online consumers it surveyed felt email was a good way to learn about new products and promotions. This year just 38 percent felt that way.
Forrester found that consumers are half as likely to purchase an item advertised in an email this year as they were last year.
So how will marketers get their messages through all the clutter, without turning off consumers in the process?
It can be done, says Jupiter's Blank.
Marketers need to keep three caveats in mind in order for an email campaign to be effective. Emails should not go out too often, they should be relevant, and consumers should have opted to receive them.
Frequency is key. Thirty-four percent of consumers say they’d like to receive email solicitations weekly, 21 percent monthly, and 10 percent less than monthly. Just 9 percent want email messages daily.
Over-delivery risks opt-outs, which are on the rise generally, indicating that people are receiving the emails often enough to be annoyed by them.
A relevant email is one that goes out to a highly qualified list of consumers who have ideally already bought something from the company, and it also pertains to something the consumer already has.
For example, Hewlett Packard tested a campaign for consumers who already own HP products. The campaign’s goal: attracting people to its web site.
A traditional direct mailing went out to one million people and netted HP 2,700 web site visitors at a cost of $163 a head, while an email campaign to 600,000 people drove 3,555 consumers to its web site at a cost of $7 a head.
"An email doesn’t have to be one-to-one communication," Blank says. "It’s simply about breaking consumers into manageable groups, figuring out who bought a DVD player six months ago, and sending them messages for DVDs. It’s as simple as that."
Opt-in emailing is obviously superior to spam, but one problem Jupiter points out is that a lot of consumers have a hard time distinguishing between completely unsolicited marketing email and marketing email they opted into.
To solve that problem, Jupiter suggests that marketers give consumers the chance to confirm that they have opted to receive email messages.
"Most companies forget that you can test your messages very quickly and very inexpensively," Blank says. "You can send out a series of test messages, and within 48 hours you’ll know what the optimal campaign is. That’s a huge improvement over off-line marketing."
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Average Email Marketing Costs, 2000 and 2001 |
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Acquisition, 2000 |
Acquisition, 2001 |
Retention, 2000 |
Retention, 2001 |
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| Media CPM |
$200 |
$125 |
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| Deliver CPM |
$30 |
$15 |
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| Click-through rate |
7% |
5% |
10% |
8% |
| Conversion |
2.5% |
2% |
5% |
3% |
| Cost/conversion |
$114 |
$125 |
$6 |
$6.25 |
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Source: Jupiter Media Metrix |
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October 31, 2001 © 2001 Media Life
-Marty Beard is a staff writer for Media Life.
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