Posted June 15, 2009 5:55 pm by with 14 comments

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Forrester Research says that marketers say they see ROI on email marketing that’s two to three times higher than any other form of direct marketing. 66% of marketers agree that email is the most cost-effective marketing tool at their company.

So why shouldn’t you waste money on email marketing?

Because wasting money is bad—and why waste money when you can make sure your email marketing is even more cost effective?

The Forrester study takes a look at the email marketing forecast for the next five years, and there’s good news: email will continue to grow in popularity among users and marketers alike. Total spending on email marketing will soar to $2B in 2014 (up from $1.2B this year):
forrester email
Of course, this popularity means that there’s a lot more competition for email users’ time—and a lot more messages bombarding them, and likely to be perceived as spam. With more than 9000 messages per inbox annually by 2014, users will become even more discriminating about what they read.

One of the effects of this is that “retention email”—permission-based email messages targeted at keeping customers—will become increasingly important. This will grow to more than 40% of total email messages annually. This effect also highlights how important it is to make sure that your messages are well-targeted and stand out from the crowd.

Forrester offers a few suggestions in this area:

  • Embrace relevancy-empowering tactics, specifically segmentation and dynamic content, as we try to do more with less in the current economy. Also look for innovations coming in this area.
  • Increase the use of services, social sharing, and data integration. Because of the integration of the social services in the email inbox (creating what Forrester calls the “social inbox”), email marketers may have to do as the Facebookers do. They should also use more “web analytics data, [build] more robust subscriber
    profiles, [use] engagement-based targeting, and [use] share-to-social mechanisms.”
  • Make today’s best practices tomorrow’s required practices. In addition to maintaining good, current email lists (see more below), marketers will also see behavior-driven engagement messaging tactics, such as sending unique
    messaging to “clickers” and “non-clickers,” become commonplace. Relevant email marketers and ESPs will see growth.

Also, to further increase the cost-effectiveness of email campaigns, be sure to practice good “list hygiene”—remove bouncing addresses, dedupe, malformed addresses, etc. By 2014 companies will be wasting up to $144M on email messages that never reach consumers’ mailboxes. Forrester also recommends sender- and message-level authentication and reputation services to make sure your messages aren’t accidentally caught in ISPs’ spam filters.

What do you think? Do you use email marketing? Do you think its future is looking bright?

  • Those are some great information, and that’s a lot f money spent just on marketing…

  • Not so sure on the title of this, very confusing as the whole article points to spending money on email marketing.

    Jaan Kanellis’s last blog post..Time For FaceBook Vanity URLs on Saturday June 13th, 2009

  • The whole article is about how not to waste the money you spend on email marketing:

    “So why shouldn’t you waste money on email marketing?

    “Because wasting money is bad—and why waste money when you can make sure your email marketing is even more cost effective?”

  • Interesting research data, Jordan:) However, I wonder how much the market of spam filters will grow by 2014. It will be interesting to see where the technology will bring us with filtering the informaiton we really need and are interested in instead just dumping ev erything in our inboxes.

    ToddySM’s last blog post..Does your blog content suck and why?

  • Tim

    Have to agree Jaan, the commentary wrapped around this makes no sense. Whose wasting money here? Not sure what McCollum’s expertise supposedly is, her LinkedIn says she is a former SEO copywriter, but clearly it is not in media mix management. What this study suggests is intelligent and proper growth of the email channel and marketers wising up to not “waste” money on branded search terms with Google and to put their money into areas that will grow sales at their companies.

  • Hi, Tim, and welcome to Marketing Pilgrim. If you took the time to read my response to Jaan’s comment, or the article itself, I believe it’s abundantly clear that the article is about how not to waste the money you spend on email marketing by doing it effectively. As I’ve quoted from the article already in the comments:

    “So why shouldn’t you waste money on email marketing?

    “Because wasting money is bad—and why waste money when you can make sure your email marketing is even more cost effective?”

    The rest of the article is about that very subject.

    Here in the blogosphere, sometimes we attract interest to articles with a tongue-in-cheek title that seems to contradict what the article says. Cf:

    But, hey, if you want to go comment on those stories and imply that Andy and I don’t know anything about Google, search or blogging, that’d be great.

    I guess I’m going to have to clarify that that’s sarcasm. Please note that this kind of personal attack is a violation of our comment policy. You might have noticed in your extensive background check that I actually did some email marketing while I was with an agency, and I’m the editor here.

  • Thanks for the replies Jordan and I understand what you were trying for from the content of the article to the title, just thought it was a little confusing that is all.

    Jaan Kanellis’s last blog post..PR Sculpting?Told Ya So

  • That’s okay, Jaan. I know you, so I know it’s not just some random drive-by comment trying to cast aspersions on me personally. I can see how you might be confused; I just thought that I addressed the sarcasm/intent of the title in the body of the article.

    Apparently that was a part that was easy to skip!

  • mstrunk

    Jordan: thanks for the article. I like the data, but I do understand comments about the confusion on the “wasting money” comments. It was a worthy try a creating a twist to the editorial – but it’s not delivering for the reader. This is not casting aspersions – just feedback on your article. 🙂 looking forward to reading more.

  • I’m sorry that it went over your head. But there’s a huge difference between saying “didn’t work for me” and “I looked this person up on LinkedIn and obviously she has no idea what she’s talking about”—that’s what really bugged me.

  • Thanks Jordan for the article. It’s interesting to see the interest level still rise along with the spending despite the emergence of social media which can be used as alternative route to reach our intended audience.

    Would it be because cost of email marketing will fall? Will anti-spam filters be sophisticated enough to conquer spammers so performance will improve dramatically? Or maybe adhering to best practice (mailing list cleanup and segmentation) and exploring new grounds (extending reach by connecting email with social media) will be enough to keep us from wasting our email marketing dollars.

    I haven’t read Forrester’s entire report but I was wondering if these are also included. Thanks again.

  • The study actually points out that social networks’ use of email notification reinforces the importance of email (the “social inbox”).

    IMO, even if anti-spam filters improve, performance is still going to be a challenge, since a lot of people sign up for email, but later forget and consider those messages spam.

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