Commentary

What Verizon-AOL Deal Could Mean For Email Marketers

by Chad White , May 19, 2015

While all of the buzz around Verizon’s $4.4 billion purchase of AOL is about adding more content, video, and ad generation to the mobile company’s distribution platform, the acquisition will also likely affect email marketers.

AOL is one of the oldest and most experienced inbox providers — and, in terms of webmail rendering, is one of the absolute best. However, because AOL has almost always been more focused on content, its webmail market share has suffered since its heyday.

Currently, AOL Mail is the 10th most popular email client overall. As of April 15, 2.25% of all webmail email opens and 0.67% of all email opens took place in AOL Mail, according to an analysis of more than 1 billion email opens by Litmus.

Verizon also provides email inbox services. It operates Verizon- and FiOS-branded email inboxes that collectively have an email market share that is a small fraction of AOL’s.

It doesn’t make sense for Verizon to operate multiple inbox platforms, so it’s very likely to consolidate AOL Mail, almost assuredly rebranding it. Focusing resources on a single webmail client and backend would likely free up some resources to make some improvements to better compete with Google and Microsoft.

But even without major improvements, the consolidation, plus a rebranding, plus better promotion and visibility within the Verizon ecosystem, could lead to a doubling of AOL Mail’s current email marketing share over the next 12 to 18 months. That would put the company back in the race with Yahoo Mail and Outlook.com, especially if Microsoft fumbles the transition of users from Outlook.com to Office 365.

AOL's Mobile Email Client

The mobile email client in AOL’s mobile app is considerably less impressive, and takes even more of a backseat to its content offerings. That app only supports AOL email accounts, and doesn’t support alt text or media queries for responsive design.

Since Verizon is a mobile communications company, it’s a safe assumption that there will be a revamp of the AOL mobile email client and that it will be more front and center in the future. The addition of media query support should be at the top of the to-do list.

With webmail market share in a slow decline and mobile email client market share still creeping higher, the mobile email client is clearly the more important of the two.

And if I were to dream a little dream, Verizon would be the ideal company to create a unified inbox with email, SMS, and mobile content (e.g., photos, videos) in the same place across both webmail and mobile clients.

The Opportunity

AOL Mail’s email market share may seem small, but it’s a base to build from. Just ask Facebook how difficult it is to launch an email client and have it stick.

At the other end of the spectrum, look what Google and Microsoft have built on the back of email. Google has an entire ecosystem of SaaS apps built around Gmail, which are making serious headway into enterprise organizations. And Microsoft has made a fortune off Outlook and the Office apps that tie into it — and is now working with Salesforce to integrate it with CRM.

Will Verizon treat AOL Mail — and email in general — as a strategic asset, following in the footsteps of Google and Microsoft? I think there’s a good chance it will, and that over time the result will be better-rendering emails. What do you think?

aol, email, m&a

3 comments about "What Verizon-AOL Deal Could Mean For Email Marketers".

Check to receive email when comments are posted.

Len Shneyder from Message Systems, June 18, 2015 at 1:11 p.m.
I think I'm a little less bullish on what Verizon + AOL means for email marketers. AOL, depending on where you look, has barely 2 million dialup subscribers, as for mailboxes they are less than 10 million. That 8% has to be a diminishing metric on a fast slope decline. I think, in terms of email, it means very little. People won't flock back to AOL, and they won't gain a ton of new traffic from FIOS or Verizon customers. I think it simply will slow the decay but not change the inevitable conclusion.
Reply

Chad White from Litmus, June 19, 2015 at 5:09 p.m.

Hi, Len. I'm not suggesting that Verizon will help rebuild AOL, but rather that AOL can help Verizon with its email platform. AOL is a dying brand, but when folded into Verizon their assets (including AOL Mail) can make a meaningful impact. Of course, time will tell, but there are very few email clients with significant marketshare. AOL Mail is one of them (if just barely).

Len Shneyder from Message Systems, June 22, 2015 at 11:55 a.m.

That's a good point, and I mostly agree with you there. I think the one discrepancy that no one knows, other than the good folks at Verizon, is if it's at all necessary. I kind of think of ISP email acocunts vs. the mailbox providers (Yahoo!, Gmail and Outlook.com), as having less marketshare and overall user bases. I've never personally used my Comcast email address; it sits dormant and forwards email to my Gmail where the bulk of my adult email history lives, or at least the last decade or so. I don't think I'm unique in this. So I guess what I'm saying is that I don't know that AOL's email client poses a major revamp/opportunity for Verizon's email client because there's probably very little demand. Just my $0.02 Cheers!