Email Marketing Has Many Advantages,
and a Few Drawbacks
by Chad Rueffert


According to Jupiter Research Center, spending on email marketing will grow to $9.4 billion by 2006.  The biggest reason?  Because it works.

There are three reasons why email marketing is experiencing such rapid growth and why more and more companies will be using it over the next five years.


Higher response rates than direct mail and banner advertisements 

According to John Messner of Popular Demand, email offers typically garner 5-15% response rates, as opposed to the 1-2% typical for direct mail.  Nielsen/NetRAtings reports that banner advertising usually gets a 0.39% rate.  Higher response rates, of course, lead to higher conversion and sales percentages.  Part of the reason for these high response rates is the “opt-in” mailing list.  Offers are being sent only to people who have expressed an interest in the product or company, and are therefore far more likely to pay attention to the email. 


Email Marketing Is Fast and Flexible

Response time for a direct mail piece can be as long as three weeks.  For email, the response time is usually less than 48 hours. Imagine the competitive advantage you can create offering a new product to market via email when your competition is using more traditional methods.  Additionally, because of the speed of the response, you can ascertain the effectiveness of your offer almost immediately, and make changes to improve effectiveness.  And because of the ease of implementation, multiple offers can be tested all at once to different target markets.  The results of your email testing can be extrapolated into your direct mail and traditional media advertising as well.


Email Marketing is Cost Effective

Along with the time savings inherent in email marketing, there are several other cost benefits associated with communicating in this format.  There are no printing costs, no postage costs, no media costs, and, in some cases, reduced creative costs.  According to Messner, the conversion cost for an email campaign is around $6, as opposed to $18 for a direct mail campaign.


Perhaps because of the initial effectiveness of email marketing as a promotional tool, many companies were quick to jump onto the bandwagon, and as a result, the initial novelty of the medium is quickly wearing off and email marketing is experiencing the same life cycle as television and radio did before it.  Over the next five years, the competitive advantage email marketing had over other advertising tactics will wear off.  Keep the following three points in mind when determining whether email marketing should be a major part of your company’s overall marketing plan.


Email Marketing is being abused

Much like the proliferation of junk mail, “spam” marketing will result in an overabundance of messages to potential customers, which always results in lower response rates.  According to Jupiter, by 2006, the average person will receive over 1400 unsolicited email over the period of a year.  Kristin Zhivago, editor of Marketing Technology, puts it this way. 


“It’s become easier to ignore email than direct mail.  A large, oversized postcard with a clear, relevant message will at least be glanced at on its way to the trash can, and it may even register.  The email message that is never opened won’t even be seen.  No wonder email response rates are plummeting today.”


The proliferation of “spam” or unsolicited emails, has led to the rise of groups dedicated to cleaning up your inbox.  And though organizations like Mail Abuse Prevention System (www.mailabuse.com) are trying to ensure that all email communications are “consensual” , it is unlikely that spam will ever be completely eliminated.


Creativity and genuine value are still important

The days of extremely inexpensive, text only email offers are quickly disappearing, and email marketing will become more expensive as more people make use of it.  According to Jupiter, HTML formatted messages, which are like mini-webpages with photos and graphics in your in-box, will be the most prevalent form of email by 2006, and currently get almost thwice the click-through rates as plain text email.  This means higher creative costs in order to grab the attention of the consumer.  And, of course, once everyone is using HTML offers, innovative companies will begin utilizing even more impressive methods, such as video and audio.


So, like all aspects of advertising, conveying your message in a creative way will be imperative, as will offering something to the consumer that has actual value to it.


“All marketing vehicles go through the same cycle,” wrote Zhivago in her February 2001 article.  “At first, it’s new and interesting.  Everyone pays attention.  Then, lazy and greedy people start to abuse the medium.  After a while, there’s more noise than signal, and people tune out.  Does this mean email marketing is dead?  No.  It means that if you want to succeed, you had better be very, very good.”


Email advertising is no longer a “do it yourself” marketing tool

Research shows that companies that outsource their email marketing achieve buy rates as much as 4 times higher than those that handle their own campaigns.  Creating the right mailing lists, determining the appropriate creative strategy, designing appealing graphics, writing compelling copy, and tracking the effectiveness of an email campaign are all important aspects of effective email marketing, and are probably best handled by a professional in the field.


In the long run, the high response rates, speed, flexibility and cost effectiveness of email marketing should far outweigh the drawbacks -- specially as more and more people use email as their primary communication tool. Every serious marketer should be adding email tactics into their overall marketing plans.