Over 50 percent of large organizations have made cuts to their marketing budgets in response to the economy. We are seeing budgets shift from brand to direct and from offline to online. With the current downturn, companies are investing in and have very high expectations of their interactive channels that drive ROI.
Email ROI far surpasses other channels and will continue to do so.
The Direct Marketers Association estimates that marketers gain 45.06 dollars in return on investment for every dollar they spend on email campaigns. That compares with 7.28 dollars for catalogs and 15.55 dollars for direct mail pieces. Also, 75 percent of marketers state that email marketing is a good investment in a downturn economy according to the Marketing Sherpa Benchmark 2009. Email marketing is fast, cost-effective and measurable. All things that are critical for marketers when they are being asked to do more with less.
The Interactive Market and Email Marketing is slated for growth and exciting new changes.
No doubt about it, interactive marketing is super exciting these days. Exploring the relationship between email and social networking, and email and mobile marketing are prominent goals for email marketers in 2009. Expect to see many more integrated marketing campaigns which drive higher results in a way consumers expect and like.
The forecast for email marketing is bright. The DMA states email will have driven 28 billion dollars in 2008 and will drive 32.6 billion dollars in 2009. Forrester predicts that retailers and wholesalers will send 158 billion marketing emails this year; that is expected to increase 63 percent to 258 billion in 2013.
While the growth is there, it is our job as email marketers to ensure our customers do not become turned off with the volume of irrelevant email. We need to put the customer first and deliver personalized and relevant email, not simply increase the frequency on them.
The following is a common myth. Marketing organizations have a fully optimized email marketing channel.
No question there is opportunity for every company to optimize email marketing in the evolving interactive market. Here are a few supporting stats from the Forrester presentation Benchmark Your Email Organization:
40 percent of marketers do not have a formal email strategy documented or enforced.
32 percent of marketers have used some form of behavioral or preference based targeting (most still only experimenting).
Most marketers are still only using basic metrics to gauge response. Only 39 percent track ROI, and only 15 percent track LTV.
70 percent of marketers are not using advanced analytics to measure response.
21 percent of marketers have no plan for managing email frequency.
The majority of marketers are either not testing, or only performing adhoc testing (nothing formal).
Hit List Opportunities:
We see most of our clients looking to optimize their email channel in 2009. In fact, they are
depending on it to drive revenue and engagement. Opportunities we see front and center are:
1. Adopting a more customer focused email marketing strategy and using email to establish a dialog with prospects and customers by:
Adding relevancy via segmentation and dynamic population of content
Adding automated lifecycle and triggered campaigns on top of base communications (Welcome, Conversion, Activation)
Stepping up efforts to understand and market to customer preferences and behavior
2. Investing in tools and infrastructure to support more sophisticated communications such as:
Segmentation/Targeting based on eMessaging behavior
Predictive Modeling to optimize targeting
3. Integrating email with other channels such as social networking and mobile.
4. Developing formalized test plans and reporting mechanism.
5. Planning for list growth with a close eye on growing active subscribers and customers.
In summary, email budgets should grow, not be cut. Investments in testing, best practices, measurement and, most importantly, providing relevant content will generate powerful ROI in 2009.