E-mail marketing is by far the most cost-effective means to reach an audience, regardless of potential interference from spammers, according to an industry association in the know.
Recently published information from the Direct Marketing Association, based in New York City, points to a return on investment of almost US$50 for every dollar spent on direct e-mail marketing campaigns. In the U.S. alone, marketers will spend US$500 million this year on e-mail marketing, expected to generate approximately US$22 billion in sales. Expenditure will increase about 18 per cent over last year.
The reason for the growth in the market is simple, said Stephanie Hendicks, a spokesperson for the DMA: e-mail is cheap.
“E-mail has the highest ROI, in large part because you can send a lot of e-mail messages for a dollar,” he said. “The cost of producing a catalogue or a direct mail piece is so much higher. In general, e-mail is still a very important part of a broader marketing mix for almost anyone.”
It’s hard to find fault with the economics of reaching millions of people via e-mail, said Ed Cartwright, a spokesperson for the Canadian Marketing Association, based in Toronto. The CMA doesn’t track ROI or expenditure the same way as the DMA, but Cartwright that Canadian e-mail marketing efforts follow much the same trends as those measured in the U.S.
E-mail is also valuable to marketers because it can be measured so succinctly, said Barry Abel, vice-president of field operations for Message Systems, an e-mail solutions provider based in Columbia, Md.
Message Systems can track the number of messages that were received, how many were opened and whether or not they landed in an inbox or junk folder first.
“Would you rather send (consumers) a huge catalogue or a targeting piece of information that’s specific to them. If you’re targeting someone who’s interested in soccer, you don’t want to send them a catalogue of football equipment,” said Abel.
Abel said the direct marketing e-mail market has probably only reached half of its potential. He expects it to grow at its current pace or better.
However, said Abel, getting a message out isn’t just a matter of blanketing e-mail lists and praying for results. In order to optimize the number of recipients that receive an e-mail, Message Systems carefully studies the spam policies of major e-mail players like Yahoo, Microsoft Hotmail and Google Gmail to ensure that they are in compliance with their approaches.
“That is the major area of concern. ISPs are being much more cautious. Because it is a business, the less mail that they can take in, the cheaper it is for them to operate. Their interests are: serve their customer and cut their costs,” said Abel.
But strict ISP spam policies can work to a marketer’s advantage, said Cartwright. By cutting down on the amount of junk, it’s more likely that a targeted e-mail won’t get lost in the spam mix – provided that e-mail is of genuine use to the recipient and addresses his or her interests directly.
“No one’s going to open mail if you’re inundated with crap,” added Abel. He said that marketers need to be on their toes now that the holiday marketing season is approaching.
“People should be considering these best practices even more. People will be receiving more e-mail in this period and ISPs will continue to tighten up their security.”
Hendricks agreed, but cautioned that marketers shouldn’t ignore other media outlets like print and conventional Web advertising just because the economics behind e-mail are so tempting.