ONLINE MARKETING: E-mail Power

Across the globe, it is not a just a great way of
communication, but is fast becoming an important marketing tool for planners.
The E-mail Marketing Report, recently published by the US-based eMarketer,
reads, “If you’re not using e-mail for customer retention or to target a
market to your customers, then you may be missing a competitive advantage.”
E-mail marketing is an effective tool that successful businesses and marketers
are using to increase profits. Also, about 63.2% of all dollars spent on e-mail
in 1999 were devoted to customer retention, not acquisitions. Excerpts from the
report:

Marketing explosion

E-mail has definitely arrived as the ultimate tool in a Web
marketer’s arsenal. It’s efficient for targeting particular groups, it can
be tailored to the recipients’ interests, it allows an instant response and it’s
cheap to implement. More importantly, permission e-mail, when done correctly, is
an optimal tool for customer retention and relationship building.

Cuts cost

Both solicited and permission-based e-mail can be
significantly cheaper than traditional direct marketing methods such as postal
direct mail and telemarketing programs.

Volume marketing

E-mail is now the closest thing Web marketers have to a
killer app. It is the dominant Internet application as measured by the
percentage of users and total message volume online. In 1999, over 394 billion
e-mail messages were delivered in the US compared to 202 billion packets of mail
by the US postal service.

Online advertising

US companies spent $3.6 billion advertising on the Internet
in 1999, and this figure will increase to $6.1 billion in 2000. By 2004, it will
reach $21 billion. E-advertising’s growth is driven by its potential to become
the ultimate, targeted communications vehicle. However, the development of
online measurement tools continues to be a challenge, as is the slow evolution
of optimal models, techniques and strategies for marketing on the Web. In
response, new approaches such as e-mail, personalization, affiliate marketing
and web-based promotions continue to evolve.

Spending: $1 bn in 2000

Total e-mail marketing spend in the US in 1999 was $422
million, including $179 million spent on e-mail ads. In 2000, these figures will
rise to $1.1 billion and $496 million, respectively. By end-2003, organizations
in the US will spend $4.6 billion, including $2.2 billion on e-mail advertising.

E-mail advertising to grow

E-mail advertising will grow from a share of 3% of Web
advertising dollars in 1998 to 13% in 2003. E-mail advertising revenues include
dollars spent on sponsored newsletters and discussion lists, rented opt-in
lists, co-marketing, endorsed e-mails and unsolicited bulk e-mail deployment.

Mass application

By end-2003, there will be 140 million e-mail users,
representing 61.5% of the total US population of adults and teens (aged over
14).

10% of all e-mails is spam

In 1999, Americans received 38.6 billion unsolicited e-mail
messages. That figure will rise to 53.6 billion by end-2000 and 75.6 billion by
2003. Although the absolute number of UCE messages will increase over the
forecast period, it will decline as a percentage of commercial messages and
total e-mails received. Technology, consumer backlash, peer pressure from the
ISP and business communities, and regulatory and legal developments will all
serve to constrain spam activity, as will the increasing availability of
legitimate opt-in vehicles. On an average, e-mail users in the US currently
receive about ten UCE messages per week, up from nine in 1999.

Permission e-mail is 12%

Permission e-mail includes opt-in mailing lists, e-mail
newsletters, discussion list subscriptions, and customer relationship and
retention e-mail. The volume is expected to increase from 64 billion to 227
billion by 2003, or 22% of the email volume.

E-mail volume: 10 bn by 2003

E-mail volume in the US will grow from 536.3 million in 1999
to 10.5 billion messages in 2003. The growth could render many traditional
alternatives redundant. A 1999 US government study concluded that the Internet
and electronic billing may render postal service extinct.

Marketing e-mails received regularly

In Arthur Andersen’s online panel survey, Knowledge Systems
and Research, nearly two-thirds of online users said that they regularly receive
mails from an online company. Also, three in ten online users received more than
20 marketing e-mails per week and 11% received more than 50 such e-mails per
week.

E-mail overload

While e-mail usage is surging because it’s convenient,
saves time and facilitates communication between friends, family and co-workers,
it also increasingly interrupts and disrupts work life. E-mail users feel they
waste a lot of time managing the flood of e-mails they receive–much of it
either unsolicited commercial messages or subscription messages that pile up.

E-mail checking frequency

In a survey, about 93% of respondents reported checking their
e-mail at least daily, including 43% who check it more than once a day and 36%
who check it more than five times a day. The survey was done online and hence
skewed towards heavy Internet users. DQ

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