Commentary

Reading The Tea Leaves

Let's look at the e-mail marketing tea leaves, based on our assessment of market trends and analysis of client success, subscriber feedback and use of best practices across both B2B and B2C markets.


1. Marketers will pay more attention to their e-mail reputation. Authentication is not the Holy Grail--ISPs and corporate receivers decide whether or not to accept and deliver your e-mail based on your sender reputation. Every sender has a reputation, but "good reputation" in this context means: low complaint rates (a complaint is recorded every time a subscriber hits the "report spam" button); few bad addresses (unknown users); no spam trap addresses (fake addresses created by receivers to catch poor list management practices); and good sending infrastructure. To help marketers manage their reputation, during 2006 more ISPs will start to provide actionable information through feedback loops and commercial services. These tools will enable marketers to know exactly what part of their reputation is causing delivery problems.

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2. Multi-channel e-mail marketing will rise. Audiences in both B2C and especially B2B are fragmenting, along with the proliferation of new digital channels like RSS, podcasting and SMS. Online advertising spending will rise, with an emphasis on campaigns that reach across channels to create interactive subscriber experiences. Vendors--CRM, e-mail broadcasters, ad agencies--will introduce new diagnostic and analysis tools to isolate the right mix for each product. Marketers, frustrated by historical data management tools that are inadequate for multichannel decision-making, will search for more relevant analytical tools that reflect the diverse and extended realm of multichannel marketing


3. Subscribers will be segmented by lifetime value and sales potential. Not all subscribers are created equal. Sending the same message to everyone on your list will continue to provide only mediocre return. Marketers will begin to apply direct marketing predictive modeling and response optimization to create subscriber experiences that reflect the value of each. Self-segmentation will play an increased role, as marketers capture targeting information from the moment of sign-up. To capitalize on this opportunity, marketers will begin to overlay behavior and demographic data to customize transactional e-mails, triggered context e-mails, and micro-sites to capture more prospects in the market.


4. Marketers will get engaged with their subscribers' interests. Many marketers have e-mail files more than half filled with inactive subscribers--no open, click or conversion/response in the past six to 12 months. It is difficult to re-engage with these subscribers via e-mail when they have already tuned e-mail out. Marketers will begin retention programs sooner--studying welcome messages, early engagement series and quarterly re-engagement strategies.

Creativity and the "art" as well as science of marketing will be employed, as old last-minute reliables like "free shipping" cease to provide an exponential response. Consumers will become increasingly deadened to the proliferation and frequency of free shipping offers, requiring that marketers use this more judiciously, as in response to shopping cart abandonment.


5. As online ad inventory tightens up, e-mail will start to look more attractive to advertisers. As more top publishers sell out prime inventory, the need for new revenue sources and new ad space will lead everyone to e-mail. In addition to increased demand for third-party stand-alone e-mail offers, advertisers will find inventory in e-mail newsletters by top-brand sites to be a viable alternative to front-page real estate. Publishers will create packages with e-mail and also create new e-mail products designed specifically to satisfy advertisers' needs. Publishers will also take steps to better quantify the value of their e-mail ad space. The net effect of this trend will be an overall increase in the stature of the value of e-mail marketing for both prospect acquisition as well as customer retention.

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