SPONSORED SUPPLEMENT:
E-Mail Marketing Options
Consumers are inundated with e-mail marketing
messages today.
Smart marketers know how to get their messages opened.
There’s no doubt that today’s e-mailboxes are getting as full as home mailboxes with marketing offers. Last year, 300 billion e-mail messages moved across the Internet—50% more than all the mail delivered by the U.S. Postal Service—and 17% were marketing offers, says New York City-based researchers The Winterberry Group. That number will grow to 600 million in 2005.
The proportion of e-mail marketing messages will more than double to 40% in 2005, Winterberry predicts. That means marketing messages will grow from 51 billion last year to 240 billion in three years—a near quintupling of marketing messages while overall messages double.
It’s no wonder that consumers are getting jaded about e-mail marketing. And so, many marketers are getting the word that consumers respond better to marketing messages from someone they know and trust. As a result, the portion of opt-in e-mail messages is growing. Already 10% of e-mail messages are opt-in messages, Winterberry estimates. That will grow to 25% in 2005. “E-mail users continue to make a clear distinction between their disdain for e-mail from companies with which they have no relationships and the value they find in e-mail from companies with which they have entered into permission relationships,” says Winterberry’s report “E-Mail Marketing: Robust Growth in a Consolidating Industry” that came out in December. “Permission, thus, is not a passing fad but will continue to be a condition to which marketers must adhere in order to make e-mail an effective marketing tool.”
Growing concern
Indeed, say companies that help e-mail marketers crack the code in getting the right e-mail to the right prospect at the right time, that concern will only grow. Consumers, who receive on average 7.5 e-mail messages a day, are sensitive to the volume of e-mails because they pay for the privilege of receiving e-mails. “There’s personal ownership of that e-mail space,” says Karen Talavera, vice president of marketing for Chicago-based MarketsOnDemand, which offers a suite of marketing services to retail and other industries. “It doesn’t cost the sender a whole lot to send e-mail messages, but it does cost the recipient time and money to receive them.”
What is sensitivity today could grow to outright animosity as the cost of owning an e-mailbox goes up, she says. A number of services that today offer unlimited e-mail capacity are restricting use and charging for greater capacity. A basic fee will get the user only so much space and anyone who logs on to find a mailbox full of marketing messages while letters from friends and relatives are getting bounced back will surely not feel favorably toward the companies who clogged the box. “Legitimate marketers, if they want to get a response and not get in trouble with consumers, better ask for permission,” Talavera says.
Sending messages only to opt-in consumers is one way that vendors of e-mail marketing services address the issue of making sure customers open their e-mail messages. Another approach is that followed by New York-based 24/7 Real Media Inc., which also targets retail and other industries with marketing services. 24/7 Real Media is creating a brand name in marketing so when consumers see messages coming from 24/7 Real Media, they will trust the brand and view the message. It is similar to the aura that TV networks or well established large consumer publications have created around their brands and the credibility consumers afford them when they view marketing in those media. “Our goal is to build a strong brand with consumers; we believe that will reduce opt-outs,” says Will Tifft, senior vice president and general manager of the mail and network product marketing divisions of 24/7 Real Media. “People will have a high level of confidence when they see a message from us that it’s quality.”
Multi-channel marketing
Vendors also are encouraging clients to dovetail e-mail marketing programs with traditional direct mail. “The mindset with our company is that e-mail should be a regular part of the marketing mix,” Talavera says. “It’s part of any customer acquisition and retention program.” To create lists that allow retailers to market via e-mail and direct mail, MarketsOnDemand offers a new e-mail append service, in which it will find and attach e-mail addresses for all customers of a retailer. “Some retailers have databases of millions of customers who have done business with them for decades, but it’s often difficult to get a critical mass of e-mail addresses for those customers,” she says.
The best way merchants have of getting e-mail addresses on their own is to encourage their customers to visit their web sites and register. It is therefore crucial that retailers provide value to customers for registering at a site. “The more value customers perceive they are getting at a site, the more likely they are to register and the more information they will provide,” Talavera says.
But she notes site registration will get only a portion of customers. “They’ll never get 100% of their offline customers to come to the web site,” she says. MarketsOnDemand can match the retailer’s customer database with other databases to connect customers with e-mail addresses at an average cost of 50 cents per name. Underscoring the importance of MarketsOnDemand’s commitment to opt-in e-mail marketing, Talavera notes, “We’ll do it only for marketers who want to append e-mails to their own customer lists. We won’t append to just any old list.”
Evidence that appending e-mail addresses to customer lists results in marketing that customers pay attention to comes from the success that Overtons, a boating supplies retailer, experienced with MarketsOnDemand’s e-mail append service. Open rates for e-mail messages from Overtons to customers averaged 15% and were as high as 25%. Click-through rates averaged 5% and opt-out rates were under 2%.
24/7 Real Media, which counts Stamps.com, BankRate.com and Scholarships.com among its clients, also encourages multiple approaches. It is building on its core offerings of list brokerage and management by expanding its e-mail service bureau offerings. “We have more closely aligned our e-mail division with our promotions division,” Tifft says. “We are able to package our data-capturing services and account-acquisition programs much more aggressively.”
Understanding motivation
Combining the services allows 24/7 Real Media, which has a database of 38 million names, to understand what motivates consumers. For instance, the company knows what percent of recipients will respond to an e-mail coupon that the consumer redeems in a store. “Because we’ve had most of the names for more than a year, we have a sense of what works for those names,” Tifft says. He notes, however, that no behavioral information is attached to individual names; it’s aggregated to groups. “We are absolutely within industry norms for privacy,” he says.
Knowing what the consumers in the e-mail database will respond to is a relatively new development in the e-mail marketing business, Tifft says. “There are any number of companies who can claim they have 25 million names in their database,” he says, “but very few can claim that they are managing that database to the customer experience.”
Understanding what motivates consumers and having the right list with the right ingredients will be a key part of 24/7 Real Media’s success, Tifft says. “It will be critical to enhance the quality of the list and move toward a more qualified e-mail user and away from thinking that a name is a name is a name,” he says.
That trend is already developing as marketers gain a better understanding of how e-mail marketing works. “Users are becoming more sophisticated,” Tifft says. “They’re more used to doing e-mail marketing, they know what will work and so there’s not as much testing.”
Soon, retailers will be looking more and more at the return they attain on their marketing investment, Tifft says. “It used to be about capturing names with no need to target,” he says. “But now it’s becoming a direct marketing business and everyone’s doing ROI.”
Growing numbers of e-mails, increasing numbers of consumers getting e-mail addresses and retailers growing more sophisticated in their use of e-mail marketing may all point to a maturing market, but there’s plenty of opportunity left, Talavera says. Among the challenges that will continue to face the industry, she predicts, will be the need to maintain current e-mail addresses in a market where the average e-mail address changes every year; large corporations’ increasing filtering of employee e-mails, which will cause consumers to switch e-mail addresses to personal accounts; and the consolidation of e-mail addresses as consumers react to higher prices that e-mail services will charge. “Once marketers get good e-mail coverage, they’ll still have to maintain the lists to keep them current,” Talavera says. “There will be some segments that will always need this service.”
