Email Marketing Is (Not) Dead
Think for a moment about your typical day. How many times do you check your email? How long can you go without checking it before curiosity gets the best of you and you simply cannot resist the urge any longer?
Emily is a typical 30-something professional. She first looks at her iPhone sometime between getting out of bed and her first cup of coffee. She glances at it after her shower but before getting dressed and then again after brushing her teeth. She stops to reply to a message before leaving for the commute to work, and then responds to messages for a few minutes on the bus.
When Emily arrives at the office, she fires up her laptop and plows through a few emails before the 9 a.m. staff meeting. During the meeting she glances down at her phone a few times (any email?). Before 10:30, she sneaks a peek at least once, if not twice, at her iPhone to see whether something urgent has come in. She does another quick check between phone calls, takes a few minutes to reply to the morning meeting notes that were sent around the office, and she’s off to lunch.
The workday is not yet five hours old and Emily has been in her inbox more than a dozen times.
Emily is not an unusual case study in today’s on-the-go but in-the-know business world. She depends on her email for the news of the day, her vital work documents and meeting notices, notifications that friends have posted new information on their social networking profiles, ads and coupons from retailers, as well as information from online daily deal sites, notifications from the local arts center of new dramatic productions, and the occasional message from mom.
Try telling Emily email is dead.
Is it really? Well, take a moment to think about how you start your day. How often in your routine do you pick up your smart phone or tablet, or walk by your computer only to wiggle the mouse and see how many notifications your inbox shows? Do you check your email from bed? While combing your hair? While eating breakfast? Is it hard for you not to check messages while having dinner with your friends or family?
Now think about the totality of your day—work or otherwise. When you’re using a device connected to the Internet, we’re willing to bet checking email is one of your top three tasks, if not the number one thing you do. You might also read blog posts, update social networking sites, and search for products or information and the like, but you probably always come back to your inbox.
In fact, we’re pretty sure you’ve checked your email today. Some of you may have even paused a moment ago, put down the book and glanced at your inbox. (It’s okay. DJ stopped after the Emily part and checked his.) Email has become what we do online. It’s ubiquitous and a huge part of our daily routine. For many of us, it’s the first thing we do in the morning. (Jason is guilty of that one.) For some, it’s the last thing we do before closing our eyes at night. We are a world addicted to email.
Email Is Dead?
If you type “email is dead” into Google to see how many references are online that include that phrase (use quotation marks to get an exact phrase match), you’ll find more than one million results. Lots of people are saying email is dead. To put it into perspective, similar searches return just 12,000 results for “LinkedIn is dead,” 46,000 for “Google+ is dead,” and 309,000 for “social media is dead.” If you believe what people are saying online, it would appear most major communications mediums are dying.
“Email is not dead. But email IS changing,” declares Mark Brownlow’s counterpoint website EmailIsNotDead.com.1 Brownlow is the journalist, blogger, and independent publisher behind the notable industry resource Email Marketing Reports.2 When asked why he created EmailIsNotDead.com, Brownlow told us that “it was just a spur of the moment, half-serious, half-a-laugh decision when the media was full of ‘email is dead’ headlines. Got fed up of these absolute black and white statements about one channel or the other: I prefer to live in the gray areas.”
The Email Is Not Dead site is chock-full of statistics and research Brownlow has collected to thwart any naysayers. A tour through the major ones paints a convincing picture.
Ninety-four percent of people send or read email! That’s more than 9 in every 10 human beings. That’s according to Pew Internet and American Life Project’s Generations 2010 report.3 Frankly, we’re a little worried about the 6 percent. Don’t they know what they’re missing? Ninety-four percent!
Email is dead?
The 94 percent figure is for all online adults. Certainly the numbers change by age bracket, right? Not really—teens (ages 12 to 17) come in at 73 percent, presumably because the younger members of that age group might not yet have a use for or be allowed to use emails. Millennials (ages 18 to 33) stand at 96 percent. The use of daily email by Generation X (ages 33 to 45) is 94 percent, and 91 percent of young Boomers (ages 46 to 55) use email. The drop-off beyond isn’t significant. Older Boomers (56 to 64), the Silent Generation (65 to 73), and the G.I. Generation (74 and up) register email usage at 93, 90, and 88 percent, respectively.
The Pew Internet and American Life Project’s Generations 2010 report states that email is the number-one online activity, ahead of generic search (87 percent of all U.S. adults), looking for health information (83 percent), and getting news (75 percent).
Email is dead?
To put a different spin on the sheer volume of the American consumer’s email addiction, in 2009, David Daniels (then of Forrester Research) predicted the number of online adults who regularly use email would grow to 153 million by 2014.4 A more recent study by the Radicati Group, Inc. stated in 2011 that “the number of worldwide email accounts is expected to increase from an installed base [active accounts, which have been accessed at least once within the last three months] of 3.1 billion in 2011 to nearly 4.1 billion by year-end 2015. This represents an average annual growth rate of 7 percent over the next four years.”5
Email is dead?
Email is so ingrained in most people’s daily routines and habits that one email account isn’t enough. We’d be willing to bet you maintain at least two email accounts—one for work, another for personal communications. If you are in school, have recently graduated, or are an active alumnus, it’s quite possible you have a third. You may even have a fourth as a catch-all email account for email marketing or social network notifications and updates. Name another product or service that you can’t get by with just one of that is dying as an industry.
“But social media is killing email. So is mobile!”
We’ve heard that from naysayers, too. If you can reach out to people on Facebook or Twitter, why on earth would you clutter their inbox? That’s been the stance of many a social media pundit in the last decade. They claim that social media has (or will) kill email. These folks just aren’t doing their homework. If anything, social media is increasing the use of email. According to a well-done whitepaper called “View from the Digital Inbox 2011,” from Merckle, a customer relationship management agency, people who use social networks are more likely to be what it terms “hyper email checkers,” meaning someone who checks email four or more times each day.6
Merckle’s report also suggests that mobile email users tend to fall into the same category. Forty-three percent of mobile email users check their email four or more times per day, compared to 29 percent of those who do not use email on a mobile device.
“But people check for personal emails, not commercial ones.”
Merckle’s data shows that in regard to the amount of time people spend on email (meaning reading and responding to it) by type (categorized as friends and family, commercial, work, and other), email marketing—that which is classified as “commercial”—has risen steadily from 23 percent in 2007 to 30 percent in 2010. During that same time period, emails to friends and family have fallen from 43 percent to 37 percent. Work and other types of email have remained fairly steady as a percentage of overall email.
This data can be interpreted a couple different ways:
- As the volume of commercial email has risen, so has the amount of time people spend reading and interacting with it (clicking, sharing, and so on).
- Marketers might be getting smarter about sending timely, relevant, valuable content to their subscribers; thus, people are spending more time engaging with those email marketing messages.
What is not clear from the Merckle study is how click-throughs and conversions (sales, webinar sign-ups, and so on) are being impacted by the rise in time spent interacting with commercial email. In the long run, these metrics might be more important for marketers.
Either way, what is apparent is that consumers are shifting their email consumption time in favor of commercial emails.
Finally, regardless of the user’s age, email is the preferred method of communication for commercial messages—by far. Merckle reports that 74 percent of all online adults say so. Compared to direct mail, email is preferred at a rate of five to one.
There are 2.9 billion email accounts in the world. 2.9 BILLION! To put that number in perspective, the world population is around 7 billion.7 People send 56 million non-spam email messages per day. At least, they did in 2010 according to the Radicati Group.8 Comparing that figure to the total accounts and daily activity of Facebook, Twitter, Google+, and websites, you can start to see how alive email really is (see Figure IN.1).
Figure IN.1. A comparison of the total accounts and daily activity of Facebook, Twitter, Google+, and websites along with email show a distinct advantage of using the true inbox as a source for Internet users’ information.10, 11, 12, 13 (Figure source: http://smartertools.files.wordpress.com/2011/08/infographic_abs_final.png)
As you can see, a vast difference exists in both the number of accounts and the activity in the channel.
Email is dead?
To clarify, the 188 million emails sent per day in 2010 does not include spam emails. Unfortunately, spam exists. It can be defined in a few ways:
- From a consumer perspective, spam is any unwanted email.
- From the legal perspective, spam is email that does not comply with the requirements of the CAN-SPAM Act—a bill signed into law in the United States in 2003 (and updated in 2008) that outlines rules and requirements for sending commercial email.9
- From an Internet Service Provider (ISP) perspective, spam is a message that contains viruses or malicious content.
As it stands, the worldwide email spam rate is at 70.5 percent.14 That’s right—nearly three out of every four emails sent around the world is spam. What that means is that the true total of all emails sent per day in 2010 was somewhere north of 550 million! If email truly were dead, do you think those spammers would waste their time?
If you look beyond the spam, you can see that permission-based, commercial emails reach the inbox. That is to say, emails that the person has subscribed to voluntarily, opted into purposefully, but that are also commercial in nature, arrive intact. In fact, 76.5 percent of all permission-based, opt-in emails make it to inboxes around the world.15 The other 23.5 percent either get lost (15.1 percent) or land in the spam or junk folder (8.4 percent).
Yes, people do welcome companies to their inboxes. Although 50 percent of all email in the average user’s inbox is newsletters and deals, they are typically email marketing efforts the user opted in to receive.16
Email versus Email Marketing
All the statistics in the world fail to tell the true story of email. Although we try to give you a holistic look of email marketing in this book, drawing some distinctions and bringing some clarity to the world of electronic mail communications is also probably good. This allows us to level set what we’ll cover and what we might not.
Knowing the difference between email and email marketing is important. Email consists of messages between friends, families, co-workers, and colleagues. It is generally one message sent to one person, or one message sent to a small group of people. Email is usually meant as a way to communicate ideas, ask questions, request information, and so on.
Email marketing, on the other hand, is a marketing channel that allows individuals and companies to communicate en masse with their customers, prospects, fans, and subscribers. For many businesses, email marketing is the channel to alert people to upcoming events, new business developments, and new product and service announcements. From a business-to-consumer (B2C) perspective, email marketing is often a key driver of sales. It is also powerful for business-to-business (B2B) communications.
We are focused on the latter of those two: email marketing. It can be, and often is, the glue that holds a company’s marketing together. You can focus on customer acquisition, which can start with giving prospects a compelling reason to subscribe to an electronic communication from you. Your email marketing can then guide them through the consideration and trial stages all the way to purchase, repeat purchase, loyalty, and even advocacy. Why? Because you have their email addresses and they’ve identified themselves as at least minimally interested in you or your product. If you then segment, or divide your audience into subgroups, and communicate with them appropriately, you can nurse them along every step through your marketing funnel.
You can focus on customer retention, delivering timely, relevant messages to existing customers that drive top-of-mind awareness, increased involvement, increased purchase, and even recommendations and referrals. Why? Because you have their email addresses. They don’t mind the occasional outreach. By communicating with them appropriately, you can lead them through a repeat buying cycle or build them into loyal advocates for your brand.
You can focus on demand generation, teasing customers about new products or opportunities to enhance or enrich their experiences with or around your product. Why? Because you have their email addresses. They’ve raised their hand and said, “Yeah. I want to hear from this company.” By designing communications that deliver the appropriate messages at the appropriate times, you can work them into a frenzy, demanding you let them pay you more money for more stuff.
And the list goes on.
Email marketing is not only not dead, but it is the cornerstone of many a successful digital marketing campaign. Why? Because it is effective, and when we say effective, we have to talk about the all-important business metric behind any marketing effort: ROI.
The ROI of Email Marketing
Honestly, the first 40 or so years of email’s existence have been bumpy. While this new, fast, and convenient channel has revolutionized the speed and efficiency of business in some ways, it has also turned consumers off in others. Remember the 550 million spam messages sent each day?
It’s a wonder email has lasted this long, right? But where there’s a survivor, there’s a reason, and the main reason email marketing has been able to weather government intervention and regulation, business experimentation—including both successes and failures, and consumer frustrations is wrapped up in three letters: ROI.
If you haven’t heard the acronym, short for return on investment, you’ve not been around smart business people much. Nothing happens in successful business without someone scrutinizing the return on investment of various campaigns, programs, efforts, and processes. Nearly every CEO and most CMOs (chief marketing officers) ask, “What’s our ROI there?” daily.
Understanding ROI is surprisingly simple, even for the math averse. It is a mathematical formula where you subtract the amount of money you invest in something from the amount of money you made, and then divide by the amount of money you invested (see Figure IN.2).
Figure IN.2. You calculate return on investment by subtracting the amount of money spent on a project from the amount of money made on a project, then dividing that number by the amount of money spent on the project. If the result is a percentage more than 100 percent, you have positive ROI.
The result is a decimal number that can be translated into a percentage. If your percentage is above 100, you have a positive ROI. Your revenue exceeded your expense. Depending on your business, the amount of money you charge for your product or service, and the breadth or depth of your prospective audience, among other factors, a good ROI could be 105 percent, 150 percent, or 1000 percent. The higher, the better because that means more return for the effort (investment).
ROI can also be translated into dollars using that same equation. An ROI of 1.00 means you got one dollar back for every one dollar spent, so you can say your ROI rate is $1.00. A 200 percent ROI then translates to a $2.00 dollar return rate. It’s just a different way of expressing the value you’re getting back. For every dollar you put into the effort you get X or Y dollars in return.
For the past few years, the Direct Marketing Association (DMA) has calculated and reported the overall industry return on investment rate of email marketing. Its findings might surprise you.
Email marketing brought in $40.56 for every dollar spent on the efforts in 2011, the DMA reported.17 That’s an ROI of more than 4000 percent! Compare that to the other communications mechanisms the DMA also reports and you start to see why businesses would (or should) bother and why two guys like us might think writing a book about email marketing is a good idea.
Is a catalog an effective way to market? The catalog industry drove a dollar-return rate of $7.30 in 2011. Search engine marketing, often described as the one area of digital marketing that has proven its worth, comes in at $22.24 for every dollar spent. That’s good, but it’s not $40.56. Internet display advertising, which is a smoke-and-mirrors way of saying banner ads, came in at $19.72. Social networking spend turned around a rate of $12.71. Mobile marketing in 2011 drove a dollar return rate of $10.51. Although we assume both social networking and mobile marketing rates have nowhere to go but up, they have a while to go before they get to the efficiency level of email marketing.