Email marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fund-raising messages to an audience. In its broadest sense, every email sent to a potential or current customer could be considered email marketing. However, the term is usually used to refer to:
- sending email messages with the purpose of enhancing the relationship of a merchant with its current or previous customers, to encourage customer loyalty and repeat business,
- sending email messages with the purpose of acquiring new customers or convincing current customers to purchase something immediately,
- adding advertisements to email messages sent by other companies to their customers, and
- sending email messages over the Internet, as email did and does exist outside the Internet (e.g., network email and FIDO).
Researchers estimate that United States firms alone spent US $400 million on email marketing in 2006.
Contents
[hide]Comparison to traditional mail
There are both advantages and disadvantages to using email marketing in comparison to traditional advertising mail.
Advantages
Email marketing (on the Internet) is popular with companies for several reasons:
- An exact return on investment can be tracked ("track to basket") and has proven to be high when done properly. Email marketing is often reported as second only to search marketing as the most effective online marketing tactic.[2]
- Advertisers can reach substantial numbers of email subscribers who have opted in (i.e., consented) to receive email communications on subjects of interest to them.
- Over half of Internet users check or send email on a typical day.[3]
- Email is popular with digital marketers, rising an estimated 15% in 2009 to £292m in the UK.
Disadvantages
A report issued by the email services company Return Path, as of mid-2008 email deliverability is still an issue for legitimate marketers. According to the report, legitimate email servers averaged a delivery rate of 56%; twenty percent of the messages were rejected, and eight percent were filtered.[5]
Companies considering the use of an email marketing program must make sure that their program does not violate spam laws such as the United States' Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM),[6] the European Privacy and Electronic Communications Regulations 2003, or their Internet service provider's acceptable use policy.
Opt-in email advertising, or permission marketing, is a method of advertising via email whereby the recipient of the advertisement has consented to receive it. This method is one of several developed by marketers to eliminate the disadvantages of email marketing.[7]
Opt-in email marketing may evolve into a technology that uses a handshake protocol between the sender and receiver.[7]This system is intended to eventually result in a high degree of satisfaction between consumers and marketers. If opt-in email advertising is used, the material that is emailed to consumers will be "anticipated". It is assumed that the consumer wants to receive it, which makes it unlike unsolicited advertisements sent to the consumer. Ideally, opt-in email advertisements will be more personal and relevant to the consumer than untargeted advertisements.
A common example of permission marketing is a newsletter sent to an advertising firm's customers. Such newsletters inform customers of upcoming events or promotions, or new products.[8] In this type of advertising, a company that wants to send a newsletter to their customers may ask them at the point of purchase if they would like to receive the newsletter.
With a foundation of opted-in contact information stored in their database, marketers can send out promotional materials automatically—known as Drip Marketing. They can also segment their promotions to specific market segments.[9]
Legal requirements
In 2002 the European Union introduced the Directive on Privacy and Electronic Communications. Article 13 of the Directive prohibits the use of email addresses for marketing purposes. The Directive establishes the opt-in regime, where unsolicited emails may be sent only with prior agreement of the recipient.
The directive has since been incorporated into the laws of member states. In the UK it is covered under the Privacy and Electronic Communications (EC Directive) Regulations 2003[10] and applies to all organisations that send out marketing by some form of electronic communication.
The CAN-SPAM Act of 2003 authorizes a US $16,000 penalty per violation for spamming each individual recipient. Therefore, many commercial email marketers within the United States utilize a service or special software to ensure compliance with the Act. A variety of older systems exist that do not ensure compliance with the Act. To comply with the Act's regulation of commercial email, services typically require users to authenticate their return address and include a valid physical address, provide a one-click unsubscribe feature, and prohibit importing lists of purchased addresses that may not have given valid permission.
In addition to satisfying legal requirements, email service providers (ESPs) began to help customers establish and manage their own email marketing campaigns. The service providers supply email templates and general best practices, as well as methods for handling subscriptions and cancellations automatically. Some ESPs will provide insight/assistance with deliverability issues for major email providers. They also provide statistics pertaining to the number of messages received and opened, and whether the recipients clicked on any links within the messages.
The CAN-SPAM Act was updated with some new regulations including a no fee provision for opting out, further definition of "sender", post office or private mail boxes count as a "valid physical postal address" and definition of "person". These new provisions went into effect on July 7, 2008.[11]
References
- ^ DMA: "The Power of Direct Marketing: ROI, Sales, Expenditures and Employment in the U.S., 2006-2007 Edition", Direct Marketing Association, October 2006
- ^ "New Survey Data: Email's ROI Makes Tactic Key for Marketers in 2009 ", MarketingSherpa, January 21, 2009
- ^ Pew Internet & American Life Project, "Tracking surveys", March 2000 – March 2007
- ^ MediaWeek: UK e-mail marketing predicted to rise 15% MediaWeek.co.uk
- ^ Return Path's Reputation Benchmark Report: "5 ways to increase deliverability", BtoB Magazine, July 2008
- ^ The CAN-SPAM Act of 2003 online at ftc.gov or PDF Version
- ^ a b Fairhead, N. (2003) “All hail the brave new world of permission marketing via email” (Media 16, August 2003)
- ^ Dilworth, Dianna. (2007) Ruth's Chris Steak House sends sizzling e-mails for special occasions, DMNews retrieved on February 19, 2008
- ^ O'Brian J. & Montazemia, A. (2004) Management Information Systems (Canada: McGraw-Hill Ryerson Ltd.)
- ^ Full text of Privacy and Electronic Communications (EC Directive) Regulations
- ^ FTC Approves New Rule Provision Under The CAN-SPAM Act
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