DMA Study Asserts Telemarketing Yields Greater ROI Than Email

One year after coming out with a study stating that e-mail marketing yields more than three times the return on investment as telemarketing, the Direct Marketing Association has reversed course, and now says that telephone marketing gives the highest return rate.

A summary of the study, dated Sunday and published on the Direct Marketing Association's Web site, shows that the average cost per telemarketing contact is $2.50, and the average revenue is $45.37, for a return on investment index of 18.2, calculated by dividing revenue by cost. For e-mail marketing, the return on investment index was 16, calculated based on an average cost per contact of 10 cents and revenue per contact of $1.60.

But a similar study conducted last year by the Direct Marketing Association showed a return on investment index of only 4.2 for telemarketing, based on an average revenue of $6.17 per contact and cost of $1.45. Last year's study also showed that e-mail marketing had the highest return on investment index--14.2--based on average revenue of $1.28 per contact and average cost of 9 cents a contact.

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Representatives of the Direct Marketing Association did not respond by press time to telephone calls asking for an explanation for the year-to-year change or the sevenfold increase in revenue per contact of telemarketing calls. It was unclear whether the Direct Marketing Association's methodology changed from last year.

Industry observers say that Sunday's Direct Marketing Association report appears to be out of line with other industry research showing that e-mail marketing is more cost-effective than telemarketing, said David Daniels, a research director at Jupiter Research. "It seems to contradict conventional wisdom, and the direction we've seen most of the industry going in," said Daniels.

At the same time, another study released yesterday showed that consumers seem to prefer e-mail marketing to telemarketing. According to the study, most consumers--54 percent--hope that e-mail marketing replaces telemarketing.

Consumers' preference for e-mail pitches over telephone calls isn't surprising, said Jeff Hinz, senior vice president, director client services at media shop ID Media, NY. "E-mail marketing is not as intrusive. It's about control. E-mail marketing gives the consumer the sense of control," he said, adding that consumers could decide whether and when to read their e-mails, as opposed to a phone call that's usually either answered or ignored in the moment.

DoubleClick's 2004 report also found that most consumers--57 percent--receive permission-based e-marketing from online merchants, meaning that they have chosen to receive e-mails from those merchants. Fifty-five percent of consumers receive permission-based e-mails from brick-and-mortar retailers, and 45 percent receive such e-mails from catalog companies.

Nearly one in three survey respondents--32 percent--reported clicking through an e-mail to make a purchase, up from 28 percent last year.

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