• by Bill McCloskey , November 1, 2006

The Direct Marketing Association released its latest Power of Direct economic-impact study last week, and the figures surrounding e-mail were quite amazing. The data has been mentioned in a few columns but bears repeating: The ROI for e-mail marketing was $57.25 for every dollar spent. The ROI of all non-e-mail-related online marketing was $22.52, less than half. And yet marketers only spent around $300 million on e-mail marketing efforts, compared to $12 billion for non-e-mail-related marketing--$12 billion to get a return that is less than half of what can be achieved in e-mail.

We also know that the return on e-mail is much higher for companies that segment their e-mail marketing offers, so the $57.25 is really just a drop in the bucket compared to what the ROI potential is for e-mail.

We also know that companies are not spending enough in their e-mail marketing efforts. As we reported, less than a third of the retail sites we monitored that had an e-mail program in place actually sent a welcome letter and followed up with regular e-mail communications within a 30-day period of sign-up.

We also know that, especially for retail, e-mail is considered the largest demand-generating medium for online retailers.

So where is the disconnect: e-mail provides over twice the ROI, but companies now invest only 02.5% of what they put into other Internet marketing channels? Someone is getting taken for a ride.

This conundrum will drive, in large part, the agenda for the upcoming E-mail Insiders conference. Rather than take a rah-rah approach to e-mail marketing, we decided to approach it from the opposite point of view, and will have the marketers themselves begin the conference by talking not about what is right with e-mail marketing, but what is wrong. The idea is to throw the gauntlet down, examine this disconnect, and then spend the next few days seeing if we can dig our way out into the sunlight again.

Day one is dedicated to the marketers and their problems. Day two is dedicated to the vendors and their solutions. Day three is dedicated to the research and statistics that will shine a light on both days.

I think that this format will be unique and hopefully valuable. I hope to see you there.