Follow The Money

There is something going on in the e-mail space--something dramatic. One sign is the recent purchase of Bigfoot Interactive by Alliance Data Systems for $120 million, on $30 million in sales. A few months before that, Digital Impact sold for $140 million to Acxiom, who was in a bidding war with InfoUSA for the company. Datran Media reportedly recently closed on a $60 million round of investment (and since investors like to see a 10x return on their money, some significant money thinks that Datran is going to be worth upwards of $600 million in the next few years.)

And if you talk to investors who are quietly placing bets in this area, they tell you privately that e-mail is posed for a huge upswing.

Still, with all the talk about search and all the negative PR surrounding e-mail, how could all this be?

Well first, to paraphrase Mark Twain, "Reports of e-mail's death have been greatly exaggerated." According to JupiterResearch in a February 2005 report, while 77 percent of online marketers are using search as a marketing channel, 71 percent are using e-mail, a mere six percentage points behind.



Another report is even more startling. According to CMO Magazine (April 2005), if you look at all marketers, both offline and online, 70 percent say that e-mail marketing is in their future! Search placed only 36 percent in the survey; after e-mail, the next most popular marketing technique was word-of-mouth, at 43 percent.

I've repeated the DMA's return on investment report ad nauseam in this column: e-mail has the second highest ROI of any direct marketing channel, only behind telemarketing. And I've reported week after week about the traffic gains driven by e-mail marketing across the boards. According to a recent eMarketer study on e-mail, for small and mid-sized companies, e-mail is the great leveler that allows them to compete with their Fortune 500 cousins.

Yet with all that going for it, e-mail is still not given the attention it deserves within marketing organizations. According to a MarketingSherpa survey, 24 percent of marketers don't track open rates, 31 percent don't track clickthrough rates, and 52 percent don't know their conversation rates. And as I've pointed out over the last three weeks, many marketers don't even realize they are using e-mail!

Obviously some very smart and serious money is betting that marketers are soon going to wake up big time. Remember, you heard it here first.

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