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Companies Spend More on Email Than PPC; 39% Have No Clue of ROI



Wouldn’t it make sense that if you spent more money on email marketing than pay-per-click marketing, you’d have a reasonable explanation for that choice?

Well, according to the data discovered in Econsultancy’s 2010 Email Marketing Census, companies are spending more on email marketing (17% of online budgets) than PPC (16%) despite not fully understanding the return on investment (ROI) achieved or taking advantage of one of the most important benefits of email marketing: segmentation.

When you run PPC campaign, you attempt to segment your target audience by using different ad creative and targeted landing pages. You wouldn’t bring a “window shopper” to a landing page that displayed only one product, would you? So it’s a shock that many companies are still not using segmentation to target their email campaigns and deliver messages, or offers, that are tailored to their customers’ known interests and buying habits. Think about that. When you email your existing customers, you already know at least a little about their buying preferences, so why would you not segment them so that they receive tailored email messages?

With this lack of fine-tuning of their email marketing efforts, it is no wonder that 39% of companies quizzed have no idea what their ROI is from email marketing. Almost forty per cent of those that are spending more on email marketing than search, have no idea why they do so! That is astounding – but even more astounding is that 33% of agencies who manage their clients email marketing campaigns have no clue either!

Companies have become complacent with their email marketing campaigns. They’ve put them on “auto-pilot” and have focused too much on fine-tuning their search and social media efforts that they’ve neglected a channel that can create new sales and keep existing customers happy.

Let 2010 be the year that we realise there’s so much more we can do to improve our ROI from email marketing.

  • David

    What size companies are in the survey?

    I manage a small ecommerce website ($500k – $1M annual sales) and the lack of integration (or an API) with our autoresponder makes it difficult to segment our email list.

    I would assume that enterprise-level autoresponders have extensive capabilities to segment…and if you’re managing somebody else’s campaigns, you really should be trying all opportunities to increase your clients’ profitability.

    As for ROI, I rarely look at the number. Somewhere in the neighborhood of $1 of email advertising brings in $30 in gross revenue. We haven’t run PPC in 2 years, mainly because it there was no ROI in it for us at that time.

    Looking to PPC again this year.

  • Sue Anne

    Any marketing program that isn’t tracking ROI on some level is just throwing away money.