Email Gets Real
email marketing, one of the most powerful online advertising methods, is growing by leaps and bounds and getting more sophisticated every day. Gone are the days of being limited to plain text in a “form letter” type format. Those that continue to market this way are likely to be left behind by a whirlwind of new options that aim to produce greater customer loyalty and long-term ROI. However, since many of these technologies are just now becoming available, it pays to be skeptical given that many have not yet proven themselves, especially in maintaining their “novelty” in the long term.
According to a recent report by Jupiter Research, email marketing revenues will grow from $164 million in 1999 to $7.3 billion in 2005, and per-user message volume will increase 40 times. Given this clutter, companies will have increased difficulty maintaining high response rates and low unsubscribe rates. Integrating email with other media types, channels, and data will be a key factor in maintaining high response rates, according to Jupiter. Increased personalization will also play a key role.
According to Bill McCloskey of Emerging Interest, a Nyack, NY-based consulting and research firm specializing in new email advertising technologies, the largest current trend is the development of email as a separate platform. “Things like rich media email allow for a completely new delivery platform and allow for high impact messages using video, audio, and animation while providing a secure transactional e-commerce platform on the back end,” explains McCloskey. He compares this revolution to Amazon.com’s 1-click ordering technology. A similar technology is now available for enabling purchases directly from email. Before looking at buying within email, it pays to look at personalized rich media email advertising since it provides a foundation for generating sales. McCloskey describes it as delivering all elements of a website in an email. He says it is very cost-effective since it can be personalized on the fly by connecting to a database of demographic and behavioral information. “Rich media allows media buyers and planners to determine ROI and track results in a way never available before,” says McCloskey. In fact, any information that can be stored in a database can now be used to automatically customize the text, audio, and visual elements of individual email messages for a strong emotional impact and bond with the recipient.
One company leading the charge with this type of personalization is West Hills, CA-based Dynamics Direct. “We look at how to take a TV commercial campaign and put it in an email inbox,” says Roberta Berrent, vice president of marketing for Dynamics Direct. “However, this is like when there used to be a local shopkeeper who knew your name.” She likens the ability of recipients to opt out of email to viewers zipping and zapping TV commercials. Stamps.com is one company that has used Dynamics Direct’s personalization technology in a limited fashion to say the recipient’s name, “increasing ROI over our existing outbound campaign at a cost of 10 cents per opened email,” explains David Dreyer, senior marketing manager for Stamps.com, although he couldn’t release exact figures.
“Personalized streaming email is the big development now,” says Jeanniey Mullen, vice president and general manager of Grey E-mail, the email arm of Grey Direct, the first ad agency to build full-service email marketing capability. She says streams can be encapsulated to 4K to solve the “last mile” delivery problem. According to Mullen, this rich personalized email is most successful in the entertainment and B2B sectors. The nature of the medium naturally lends itself to entertainment, and she says it can help get past the gatekeeper, while grabbing immediate attention for B2B.
Mullen says the companies using (standard) email most are those migrating from offline marketing since it is cheaper, faster, and more targeted. The B2B sector has barely scratched the surface, using email mostly for lead generation and prospecting. But the real question is just how effective is personalized rich email and at what cost. While limited data exist so far, Mullen says the opening rate (the portion of recipients that opens the messages) is generally three times higher than html or text, with a forwarding rate four times better, making it a useful, viral marketing tool. “Because these emails are exciting and entertaining, people forward them,” says Mullen. She adds that costs are difficult to nail down since they are incremental versus desired results, but are generally double the cost of text plus any production costs. Berrent at Dynamics Direct says that in simultaneous text-only versus personalized rich media email tests, the opening rate was generally two to three times higher for rich media, which corresponds with Mullen’s numbers. She agrees that costs vary greatly but are quite comparable to non-data driven rich media email.
David Jacobsen, Interactive Strategist for TBWA Chiat/Day in New York, says “you build loyalty with personalization. The more you can identify the customer, the more you can personalize and improve retention and loyalty. A constant communication is most efficient and improves ROI.” He adds that increased creativity can lead to more success, but that it is not always true. Berrent says that it is difficult to tell which particular elements of an email have the most positive effect and that testing all variables is required for each campaign. Of course, none of this speaks to the branding impact or the bottom-line revenue that can be attributed to personalization, let alone the ability to maintain long-term novelty. These issues will likely become clearer as the technology becomes more widespread.
While personalization is one aspect that may improve email advertising in the long run, buying within an email may take it a step further. “Rich media email allows an entire package—front-end graphics, interactivity, and customer conversion with encryption,” says McCloskey. A company that has just released such an offering is Los Angeles-based Radical Communication. With its RadicalMail technology, an entire (secure) transaction can be completed in the body of a message, shortening the distance to a purchase. Costs for this service are minimal, on the order of several cents per email. Cybuy, a competitor, offers a similar service, but opens another browser window from the email where the transaction takes place. “All-in-the-email works well with simple transactions such as registrations,” says Mullen. “It’s not as effective where you need to give access to additional information.” Again drawing on limited data, she says registrations have seen a 15 percent increase over sending recipients to landing pages. Perhaps what media professionals will relish most is the back-end tracking capabilities all this new technology provides. Anything a recipient does can be tracked, which “helps justify choices to clients,” says McCloskey.
Media buyers and planners must also keep in mind the privacy issues these technologies raise. “Companies tend to be careful, and most players only use opt-in lists,” explains McCloskey. As Jim Campbell, vice president of marketing for TargitMail, a leading permission-based direct email marketing firm based in Portsmouth, NH that houses one of the largest opt-in email databases, puts it, “there’s a question of how much opt-in is enough. We go through several steps before sending anyone anything.” He says this is the first thing media buyers and planners should ask a company they approach for doing permission-based email. Jacobsen recommends working with such a firm only when an in-house list is available. Grey’s Mullen adds that response to some opt-in lists is decreasing since they are rented multiple times. Of course, clear disclosure of any back-end tracking practices should always be made.
Push-to-talk buttons are emerging for email campaigns, similar to those used on sites for visitors to ask for help. “The inclusion of something as simple as a human voice in email can increase effectiveness and sales, building comfort toward the company,” says McCloskey. Mullen says this is most appropriate for industries where there’s a need to talk to someone, such as car rentals. She adds this has greatly decreased abandon rates, leading to more closed sales in several campaigns. Costs for the service are normally about $1 per click.
Wireless email is just emerging in the U.S. “If wireless email is to succeed, it will need to be permission-based,” says McCloskey. “The question is what will happen with the next generation of wireless, and it’s too early to tell.” He adds that he doesn’t see wireless email as a killer app. Jacobsen says he is doing wireless ads with Vindigo and AvantGo that allow recipients to opt-in to email, but that it’s too early to gauge results.
Electronic brochures are also being used in B2B email, replacing costly physical ones while encouraging pass-along. Sony used an animated character to speak an email in a branding campaign for Battledome.com. “Gizmos” are also emerging, which are rich media viral applications that appear as icons on the desktop and allow friends to send each other movie trailers, for example. Enliven has developed a technology for capturing email addresses directly from banner ads.
As these examples show, new forms of email advertising are emerging constantly. However, the basics must not be forgotten. “Simple links in emails are working better than banners in emails since they are less like ads,” says Mullen. TargitMail’s Campbell adds that linking to a flash page, for example, addresses the fact that some ISPs strip rich media codes from messages, another concern that should be addressed when using an outside firm. Campbell also notes that a good subject line is always important to encourage opening in the first place, citing a highly effective one that offered a chance to win a Mercedes.
A good lesson here is that making something look too much like a sales pitch (even if it is) can be a turn-off and that it’s important not to get too wrapped up in the technology and lose sight of basic advertising principles. “There are so many companies offering email solutions,” reflects Jacobsen. “It’s a constant balancing act of trying new things versus those that are proven. The question becomes: Is it helping the advertiser or the consumer?” Hopefully, with a little care and responsibility, the answer is both.
Freelance writer David Cotriss can be reached at email@example.com.