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The Future of Email Marketing: Part 1

Contributing Editor Janet Roberts and I (Larry Chase) interviewed four of the leading email marketing gurus to see what this still-vibrant medium holds in store. Janet filtered these extensive interviews down to their essence. (Find Part 2 here.) LC

Email Marketing Forecast: Mostly Sunny

Don't believe the naysayers and media pundits who proclaim email is either dead or on the ropes. The medium that roared to life as a viable commercial channel in the 1990s has plenty of life left in it, as long as email marketers themselves don't kill it through misuse or abuse.

That's the word from four of the smartest people in the marketing field today. During interviews with Web Digest For Marketers, they sketched a generally positive view of email's future in the marketing mix, but also noted marketers must abandon the "one-size-fits-all" mentality and upgrade their tactics to meet audience expectations and keep the channel healthy.

Our panel of experts:

• Ken Magill, who writes the weekly Magilla Marketing column for DIRECT magazine
• Stefan Tornquist, MarketingSherpa's Research Director
• Julie Katz, email marketing industry analyst for Forrester Research
• Bill McCloskey, President and co-founder of Email Data Source, an email research firm specializing in marketing

We asked this group during individual conversations to look into the future and tell us what they see happening to email marketing and the people who practice it, as well as to provide examples of who's doing it well and what not to do.

We learned enough to fill two issues of Web Digest for Marketers. Here is Part One. Look for Part Two in a future email marketing issue.

1. It's time to expand your definition of email beyond the messages in your inbox.

"Email is electronic messaging," says DIRECT magazine's Ken Magill, the take-no-prisoners media watchdog who reports on the good, the bad, the awful and the silly in the email marketing universe. "Be it text, cell phone to cell phone, whatever – if it's sent electronically, it's email, and it's not going to die."

Some say social networks such as Twitter, LinkedIn, MySpace and Facebook threaten email because of closed-loop structures limiting communication among members. However, our gurus say social networks actually have vital email components.

"Email is actually highly integrated into social networking as a marketing channel," says Email Data Source's Bill McCloskey, whose company specializes in "competitive intelligence" for email marketers and keeps a close eye on what works in the email space. "People call them social networks but they are driven by email. If a social network doesn't have good email, I don't go to it."

There is a digital divide brewing, however, as younger users spurn email for text messaging and social networks.

"They seem to absorb more and more media, but they're not wild about email," says MarketingSherpa's Stefan Tornquist, who guides the research that drives much of the information-sharing on MarketingSherpa. "The 18-to-24s are not as likely to subscribe to email newsletters."

However, email use may change as this "hyperwired generation," as Tornquist calls them, sees their email use evolve.

"If they get into the workplace, their email use will rise, whether they want it to or not," he said. "Sooner or later, you're going to have Outlook, you're going to have a BlackBerry, or both. Mobile devices are more important, but if you're the kind of person who produces a lot of paperwork, you've got to have a laptop or desktop to produce it."

The takeaway: Be sure your email messages are readable on different platforms and other formats. What looks good on your high-powered desktop may be a big blank white space on a cell phone.

2. Spam won't kill email as a commercial channel. Marketers themselves might bring that about by over-mailing and sending irrelevant messages.

"To keep the channel viable, and to not have users defect to other channels, it's important to be more responsible with the channel," says Forrester's Julie Katz.

"What we're hearing is marketers saying, 'We are sending a lot because we can't slow down.' They're sending a lot because their competition is, but it's clear that their customers are getting frustrated with the volume of email. That shows in the declines in clickthrough rates and revenue per email sent. They need to scale back a little bit and be more responsible or they're going to kill the channel."

Tornquist draws a parallel between email marketing and revitalized oil drilling in Pennsylvania thanks to high overseas prices.

"If you think about the early days of the oil industry, we drilled too many holes and pumped too fast and reduced the oil presses," he says. "We still have all of these wells producing oil, but they got slower and less efficient. In the last 10 years, that's how we've treated email lists. We sent email to anyone who opted in any time we needed revenue."

All this electronic over pumping has helped to push down CTRs several percentage points, from 15% a few years ago to an average 9% currently. However, conversion rates are holding steady, he said.

The definition of spam has shifted, too. Once it was strictly junk mail; today, it's "anything (subscribers) don't want," Tornquist said.

The symbol of this discontent? The "Report Spam" button, which is now found in almost every email client. Marketers might hate this development, but Magill urges them to learn from it rather than fight it.

"It's the most beautiful invention in email's 10 years, because it lets the users decide what is spam and what isn't."

Not that Magill has fallen in with the anti-spam crowd. Instead, he sees easy reporting as a wake-up call to get marketers to clean up their acts and keep the channel healthy.

"ISPs are under no obligation to deliver your junk," he says. "You are taxing someone else's resources and someone else is paying employees to handle your stuff, so the ISPs have every right to block your garbage if they want. You will be closed to that channel, and you will have no recourse but to clean your list."

The takeaway: Clean up your act yourself, or your subscribers will defect and the ISPs will either route your emails to their junk folders or block them completely.

3. What do pizza vendors, food marketers and ski resorts have in common? Subscriber-focused email marketing programs that give readers more control in what they receive.

Bill McCloskey: "The pizza (delivery) industry has incorporated integration. They try things early and are heavy experimenters. I have seen very elaborate email campaigns. Email is great for driving people to specific events. You order your pizza online, get your pizza order in for the next ballgame, and it costs less online than over the phone. The pizza industry has embraced all channels and drives it with great email delivery."

Ken Magill: "Intrawest ski resorts. They let you tailor your profile and do multi-pronged email campaigns. They have two constituencies: visitors and locals. You can sign up for alerts when the snow reaches x number of inches. Someone has to compile that report every day anyway, so why not put it in an email? ... They don't just make money from skiing and lodging but from spas and shopping, too. They dropped a lot of their direct mail and have a program that sends countdown email. Not daily, but messaging that's specific to their stay (such as) directions and lists of events because there are other options for these people."

Julie Katz: "Kraft Foods. They ask for a lot of feedback from their newsletter subscribers to modify how their email program is run. They insert surveys in their email messages and then share the results broadly across the subscriber group. For example, they asked if subscribers would be interested in receiving Kraft updates via mobile when they're in the store to help with food shopping, recipe lists, etc., and you could see from the responses that over 95% were not interested. Being open like that, collecting and sharing data, this is interesting."

4. If you're a B-to-B vendor, try to think like a publisher, who has to consider what readers want to read, not what you want to tell them.

"Newsletters play an important role in B-to-B," says Tornquist. "If you are producing a house newsletter for current customers, they might well find occasional updates useful to them. For prospects, if they're reading your newsletter, it's because they're interested in your take on the work.

"You need to think like a publisher, to provide relevant content. For a house newsletter, the one job is to keep the lines of communication open. This does not mean pummeling subscribers with news like, 'Here's who we're working with.' In a world where there's a lot of content, differentiate yourself by thinking like a good reporter and looking for what would be most useful to your readers and your prospects."

The takeaway: Wrap your news or offers in useful content, which delivers higher value, makes you look more authoritative and increases the email's shelf life.

In Part Two: The experts weigh in on deliverability, keeping email top of mind in the executive suite and using the right metrics to measure your email program's effectiveness.

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