September 4, 2008, 12:00 AM

Marketers learning how to better target consumers with e-mail, study says

Amid rising interest among consumers for new forms of marketing like social media and online video, e-mail marketers are learning to turn more toward transactional e-mails and newsletters that can double as marketing tools, Forrester Research says.

Paul Demery

Managing Editor, B2B E-commerce

Amid rising interest among consumers for new forms of marketing like social media and online video, e-mail marketers are learning to turn more toward transactional e-mails and newsletters that can double as marketing tools, Forrester Research Inc. says.

Growth in spending on e-mail marketing in the retail industry will slow down over the next few years, as marketers turn more toward emerging advertising media like online video, social media and interactive display ads, Forrester says.

Retail industry marketers, faced with increased competition in e-mail and search marketing, will focus more on advertising channels that offer new ways to engage consumers and support branding efforts, Forrester says in the study, “Retail Interactive Marketing Spend Grows Steadily,” which was authored by Forrester analyst Shar VanBoskirk with input from analyst Sarah Glass.

Spending on e-mail marketing in the retail industry will grow at a compound annual growth rate of 10%, rising from $1.04 billion in 2007 to $1.64 billion in 2012, the study says. The sharpest growth during the period will occur in 2008 over 2007, when spending on e-mail marketing will grow 20% before tapering off to a growth rate of 6% in 2011 over 2010 and 1% in 2012 over 2001, Forrester says.

By comparison, retail industry spending on emerging channels marketing-including social media and rich media display ads that can act as mini-sites-will experience the sharpest average growth-75%-from 2007 to 2012, rising from $104 million last year to $1.59 billion in 2012. Spending on online video marketing will be a close second, with average growth of 73%, rising from $158 million last year to $2.32 billion in 2012.

Search marketing, however, will continue to dominate the marketing field, as spending grows at an average 24% from $2.82 billion in 2007 to $8.27 billion in 2012. Online display advertising will also remain important, as it grows at an average of 20% from $2.07 billion last year to $5 billion in 2012.

In a separate report, “US Email Marketing Volume Forecast, 2008-2013,” authored by Julie Katz, Forrester notes that small and mid-sized marketers will seek to better engage consumers through e-mail marketing by focusing less on promotional e-mail and more on newsletters, transactional messages like order confirmations, and messages triggered by particular consumer activity.

“Promotional e-mail is building to a saturation point,” Forrester says, noting that 77% of recently surveyed online consumers said they were annoyed with e-mail volume. “As a result, marketers will embrace other types of e-mail communication that cut down on clutter and reach their audiences in a more targeted fashion.”

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