In a July 2007 The McKinsey Quarterly study, email marketing spending scored the lowest projected increase in a list of popular online marketing tactics and finished with the highest projected decrease in spending over the next three years. While it’s true that, on a whole, online marketers are planning to pull back on email spending, consumers are still signing up to receive newsletters, promotional emails and new product and service announcements at a steady rate. Long story short, no matter what online marketers say, consumers are still asking for relationships with the brands they love and email is still a big part of that relationship.
Over the recent past, consumer patience with non-solicited email (spam) has fallen to an all-time low, there has been a steady increase in the adoption of more efficient information delivery methods such as RSS, and there has been a continued rise in the use of spam blockers. One would think that these forces would indeed put negative pressure on overall email use and spending by marketers. However, Penton Media Custom Research reports that of the online marketing tactics used by US marketers in February and March 2007, email marketing and email newsletters were used more often than any other tactic including banner ads, blogs, viral campaigns, search engine optimization and podcasts.
Adding to what Penton found, we recently conducted an online survey for a consumer packaged goods client where over 95% of the more than 800 respondents said that they prefer email communication as the primary means of brand communication, above RSS, text/mobile messaging and five other online marketing tactics. Beyond just preferring this method of information delivery, more than 90% said they prefer email communication more often than just once a month. Consumers are looking for relevant, targeted, personalized content from their favorite brands and beyond tolerating email communication, they are asking for it.
Consumers are asking for relationships from their preferred companies and are looking to build relationships with their favorite brands. According to Silverpop, retail marketers understand that building a relationship with consumers is important and leads to long-term sales. As such, retail marketers are making it easier to opt in and out of campaigns, and they are learning to ask customers for more than just e-mail addresses to help craft personalized messages. eMarketer states that in 2007, nearly six out of 10 companies will send their e-mail recipients to pre-populated Web forms if they want to opt-out, up from 30% who did so in 2005, making it easier to end communications on the consumer’s terms. In addition, nearly two-thirds of e-mail opt-out links in 2007 led to a page for registrants to make changes to their preferences. In 2005, only 12% of e-mail marketers did so. Not only does ease of opt-out help build a trusting relationship but taking consumers to a preference page instead of a simple opt-out may convince consumers that the company has something else of interest, even if they no longer want a particular communication.
Not only is it important to communicate with consumers when and how they want, but it is important to build trust from the beginning, by starting the conversation when a consumer asks for it. eMarketer reports that Mike Weston, managing director of Silverpop EMEA, believes effective e-mail marketing tends to resemble polite conversation. "There are rules of conversation," Mr. Weston said. "Companies that fail to respond when someone gives them an e-mail address are doing the equivalent of ignoring them face to face in a store."
If consumer desires aren’t enough to convince you to continue the use of email communication, listen to online marketers who reported to MarketingSherpa in March that more than one-half of US marketers stated that e-mail marketing produced the second best ROI of any marketing tactic. Only search engine optimization was more highly regarded for ROI. Yet, eMarketer predicts that US e-mail marketing spending will reach $1.65 billion in 2011, up from $1.5 billion in 2007, so the annual growth rate will slow from 5.6% in 2006 to 1.5% in 2011. Consumers are asking for relationships with brands and the ROI payouts are there, so why is email spending predicted to decline? Researchers believe that while the number of emails sent will actually continue to increase steadily, efficiencies in email delivery will offset those larger increases in number of emails sent by reducing costs. As such, email spending will increase at a slower rate than the rate at which the number of emails sent will increase.
Many people believe that email marketing is dead or is in the process of a slow death. However, consumers are still asking for brand relationships that are buoyed by email communication. I would highly recommend against using email as your only means of communication with consumers, but it should not be ignored in the face of negative publicity. In addition, the ROI payouts have been proven, so it shouldn’t be too difficult to sell your CMO on the tactic either.
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