Email Goes Public

One of the takeaways for me at last week's Email Insider Summit was my perception that we are in the early stages of a tide shift when it comes to email marketing. The feeling that I got was that large company interest in email as a marketing tool was being diluted by a plethora of cool new toys like social networks, mobile marketing, and other shiny objects of interest. Many of the big individuals in the email space are being reassigned and reorganized, and many of the stalwarts of the industry may soon be spending their time thinking of other things.

Contrast that with the rock-show enthusiasm I witnessed at the ExactTarget users group a few months ago; here it was the small and medium-sized businesses that were charged up about email marketing. These companies don't have the luxury of navel-gazing on new technologies and platforms that may or may not work. They are focused on proven platforms like email, and hungry for information on how to make their email marketing programs better.



So it was interesting to read about the planned IPO of ExactTarget following on the heels of Constant Contact's IPO. The S1 filings provide interesting reading -- or, as one insider called it, the open kimono of the email marketing industry.

From the S1:

"The demand for email marketing products and services is large and growing, driven by organizations' desires to leverage the efficiency and effectiveness of this marketing channel. According to Forrester Research, the size of the U.S. email market for technology and services related to integration, strategy, delivery, creative and analytics is expected to grow from $2.3 billion in 2007 to $3.5 billion in 2010, representing a compound annual growth rate of 15%. We believe these segments of the market will grow at a higher rate due to increased outsourcing to email providers as well as growth in event-triggered email communications. Additionally, we believe our total addressable market opportunity will be larger as organizations embrace emerging one-to-one marketing technologies such as short messaging service, or SMS, really simple syndication, or RSS, web landing pages and voice automated solutions."

The first nine months of 2007 saw ExactTarget's revenue increase $12 million to $34 million. Earnings rose to $2.1 million. And a good chunk of the revenue came from the thousands of small and medium-sized businesses that ExactTarget services.

Looking at both companies' filings should give investors some positive insights into what is going on in email marketing. It is a field driven by the little guy who use the power of email as a way of leveling the playing field.

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