February 7, 2008, 12:00 AM

Spending on e-mail marketing to top $2 billion by 2012, study forecasts

Business-to-consumer marketers will account for the largest share of U.S. e-mail spending at $1.8 billion in 2012, JupiterResearch reports. Failure to refine lists is one reason e-mail activity and e-mail spending keeps rising, it says.

Overall spending on marketing e-mail in the U.S. is expected to grow from $1.2 billion last year to $2.1 billion by 2012, with b2c e-mail continuing to represent the largest share of that total, according to findings from JupiterResearch. B2c marketers, who accounted for $1.1 billion of total e-mail marketing spending in 2007, are expected to increase spending to $1.8 billion by 2012, for a compounded annual growth rate of 12%.

Jupiter’s report, “U.S. E-mail Marketing Forecast, 2007 to 2012,” attributes the large growth in the b2c sector in part to ever-larger lists and to the failure of many marketers to refine lists with targeting and reactivation tactics. According to Jupiter, 73% of b2c marketers, for example, don’t use e-mail click-through behavior to segment lists for subsequent mailings, and most marketers don’t use reactivation tactics-special offers, for instance-when subscribers remain unresponsive.

While b2c marketers include some publishing sites whose revenue is tied to list size, the failure to refine lists “is detrimental to delivery and will aid in the increased spending," Jupiter notes.

As the result of greater e-mail spending and activity and the resulting “marketing clutter," even subscribed e-mail will increasingly fight for attention in consumers’ in-boxes, says Jupiter. As a result, marketers will have to embrace tactics that boost e-mail relevance, such as dynamic content and multivariate testing of offers and messaging.

Jupiter notes that its figures do not include spending on services from interactive agencies that may include e-mail marketing, which could as much as double the research company’s forecast for overall spending on e-mail marketing.

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