Commentary

Motivation for 2010

Welcome to 2010!   It's the beginning of the year, and I don't feel complete without laying out some lofty predictions.   2009 has been an interesting year on many levels: the economy, financial systems, jobs, wars, a new president.  From an online marketing perspective, it was a nice end to the year.  Online sales were up this holiday season, and consumers seem to be a little more positive about spending. 

Our industry has had an interesting time this year, as well.  Email has a great ROI and budgets for email are increasing slightly.  How would I grade 2009?

Technology and Innovation:   Grade:  B-   I didn't see any dramatic innovation in the email channel in 2009, nor did I see companies invest that heavily in email platforms.  While many platforms have evolved and are certainly more sophisticated today, I wasn't that impressed with any major product launches in 2010 that stretched our use of the channel or capabilities.  There was some innovation within marketing automation players, but none was earth shattering. It was more a process of reaching parity with some of the long-time ESPs.

Investment: Grade:  C+.  Aside from ExactTarget's rounds of funding, it's been a rather slow year, with only a few small acquisitions.  No major moves in the space.  There's been talk of a few ESPs and IPOs, but little movement in the M&A area and little investment in these companies.  Best described as a year of survival.  

Integration of Email with other channels: Grade: B.  This wasn't the year of mobile.  We are still talking about mobile in the same context as 2008.  This was a year of social!  While technology innovation and data integration with social efforts is still in its infancy, more agencies are pressing the platforms and organizations to combine social marketing with relationship marketing and email.  Yet aside from share to social, no major strides in combining measurement platforms with email. 

I do think 2010 has a lot of potential for this channel.  We have survived the times.  The strong companies are still around, and the small companies are still surviving.   I predict the following:

Social relationship marketing -- I'm a firm believer that social behavioral data will be as valuable to us as cookie-level data is to targeting and site side personalization.  The major data providers will combine this view with household level data and contextual sharing to offer marketers a broader view of the consumer and how they interact through their networks.  Along with a long-tail view of the consumer and growing databases, it will force marketers and service providers to innovate and take some risks in this area. 

Predicting the Consumer:   We've been doing the same things for 10+ years.  Same strategies, same approaches and seem to be recycling things.  The next generation must develop some predictive nature to our programs.  Who is likely to be a long-time subscriber?  What triggers will help predict engagement through the email channel?  What triggers in early lifecycle will predict higher engagement value?  What is the threshold to discounting and price elasticity and how does the email channel influence this?  What cross channels are best to build the most valuable experience and relationship?   

We will hear more about predictive targeting and communication planning, rather than mass personalization and dynamic content this year.  Those are means of doing things, but we need more thinking in "what if" scenarios to really add more value through the channel.

CPM Commoditization:  We are already seeing the price of sending email shrinking.  I believe we'll see more of this in 2010.  The platforms can mostly do whatever you need to do -- and the service level support from the ESPs will be an expectation, not a value add.  Thus, CPMs will decline and in some forms become a commodity that is highly negotiated.  Consider that 30% of companies will switch ESPs in the next year; this will create a natural competitive flow to this pricing.

Data Privacy:  We, as consumers, will completely freak out when we realize what information is available about us for anyone that wants to buy it.  While I see great value in this data from a marketing side, there will be consumer backlash in controls of online social data that will be the buzz in the last half of 2010. 

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