Combine the Olympics, an election year, offset by the recession in the EU and what do you get? A revised perspective of global advertising spend, according to Bruce Biegel, senior managing director of Winterberry Group. Speaking at DMA a few weeks ago, he unveiled his market outlook for advertising spend, indicating continued growth in virtually all markets, with the exception of Western Europe.
While the markets have shown a shift in spend from traditional (outdoor, television, newspapers, magazines, radio, yellow pages - $131 billion ) to direct and digital, election years mask the real shift that is occurring. Net is, online marketing continues to capture share of advertising spend to over $40 billion in 2012. Biegel spoke about the meteoric rise of mobile, shift in how real-time bidding is influencing display advertising, and the continued connection of social, mobile and email as multichannel still remains the golden child for marketers.
We’ve seen these market growth projections trending similarly for the past 10 years, yet what makes this noteworthy is the so-called demise of email engagement rates. As I’ve reported over the last few years, the email industry continues to send more email, with growth estimates in excess of 40%-50% year over year. We’ve seen more sophistication in email that allows marketers to send more targeted, timely campaigns and programs. We are seeing innovation in the real-time space, not just real-time content, but real-time decisioning and interaction management. We are seeing much closer alignment of the social and mobile channels with email due to consumer time/place shifting. While many report the demise of the open rate and click through performance, the game has changed for many and the portfolio of communications advertisers/marketers send today through email are much more evolved than they were in the past.
According to the email industry will continue to grow and reach $1.88B by the end of this year, despite lowered engagement rates, an impressive 14.5% compound annual growth rate from 2009. The real question we have to address: Is the engagement rate really declining for email? As a statistician would say, if you don’t like the result, analyze it differently. As I said in my column a few months ago, if you are categorizing engagement rates by macro trends in clicks and opens you are judging the weather outside by the temperature inside. Let me give you a few point to balance this opinion:
- Mobile growth is going nuts. Tablets, smart phones, point of sale, location based targeting and m-commerce - combined 37% CAGR over the last three years, the consume rise mobile and mobile email is part of that growth.
- Rise in online targeting (audience management), leads to more data driven engagement cross channel
- Search retargeting and local search driving new methods to apply relevance with “intent.”
All rising trends rely on the email channel in one form or another. And while most will agree the email inbox has changed to the mobile inbox, the behaviors still conform to the four fundamentals of consumer email value exchange (notification, informational, promotion and social).
The changing consumer is a real positive. No longer are we waiting for Tuesday at 8 a.m. to send that newsletter, or Thursday afternoon to bait the mall shopper. Consumers are not just answering email at their desk or during lunch, they are answering it while waiting in line, while driving, while riding an elevator. If you do enough of something, you form habits. I wrote a column in 2010 on “The Consumer and ‘Habits’,” that is worthy of mention. 95% of human behavior is controlled by the unconscious mind. I believe email has almost reached that tipping point, where it’s just done whenever there is a free moment, not necessarily with intent except to pass time. If you increase the touch points and decrease “direct conversion expectations” you have an evolved interaction that can last and diversify as the channels evolve.
“Some people grumble that roses have thorns, I am grateful that thorns have roses” (Alphonse Karr)