Is E-Mail Marketing a $12 Billion Industry?

  |  June 4, 2009   |  Comments

A debate over the sector's size could potentially result in better e-mail experiences for consumers. Here's why.

A bit of controversy was generated in recent weeks by media research firm Borrell Associates, which published a report that pegged the e-mail marketing industry at $12 billion. According to the report, "...last year, email advertising quietly moved to the No. 1 online ad category spot, surpassing all other forms of interactive advertising."

Problem is, this number is light years beyond the nearest high estimate of the market, prompting quite a bit of discussion on the Inbox Insiders list, a private invitation-only discussion list made up of top stakeholders in e-mail marketing.

Of course, the main issue is: What are you counting when you count the number? And you also may be asking yourself is: Why does it matter?

For instance, the Interactive Advertising Bureau placed the e-mail industry at about $500 million or about 2 percent of all online ad spending in 2008. But the IAB has a specific focus as an online publisher organization and its number is focused on and limited to the money being spent on advertising and sponsorships in e-mail newsletters.

In a follow-up article on its site, Borrell Associates makes the case for its numbers and states that traditional methods of calculating a market size are flawed as a Web measurement. The size of traditional media are calculated by adding up revenue of various media outlets and coming up with a number, a finite universe in the traditional media world of print, TV, and radio. But how do you calculate that number based on the revenue on the Web where the "media outlets" is incalculable?

Borrell does it by looking at spend, rather than revenue, and calculates based on publicly available sources, the money being spent at e-mail service providers such as Constant Contact, and adds that to the mix. Not included in the final number are items like the costs of actually producing the e-mail creative. But the money spent in delivering the message is included, just as postage is included in calculating the size of the direct marketing industry.

Why does any of this matter? The addressable market size is a figure used by venture capitalists and others when deciding whether to invest in e-mail marketing companies.

Investment means innovation, better e-mail products, more services to choose from, and a healthy e-mail channel. A larger addressable market also means more press time is devoted to covering e-mail; CEOs and boards start paying more attention to the channel and they free up funds to build out their own e-mail marketing channel. And that means a bigger addressable market, which means more investment, which means better and more varied products.

But the real number that will drive everything is rarely addressed at all: the revenue generated by the e-mail marketing channel -- the traffic driven by e-mail as a retention tool and as a source for new customers. This number that must be focused on, addressed, and evangelized because this number will take the e-mail marketing industry to a new level of serious thought and attention. And that will make e-mail a better experience for the consumer as well.

Join us for a one-day Online Marketing Summit in a city near you from May 5 to July 1, 2009. Choose from one of 16 events designed to help interactive marketers do their jobs more effectively. All sessions are new this year and cover such topics as social media, e-mail marketing, search, and integrated marketing.

ClickZ Live Chicago Learn Digital Marketing Insights From Leading Brands!
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda, or register and attend one of the best ClickZ events yet!

ABOUT THE AUTHOR

Bill McCloskey

Bill McCloskey is the founder and chief evangelist for Email Data Source, a competitive intelligence resource for e-mail marketers. He was named one of online advertising's 50 most influential people by "Media" magazine and one of the 100 people to know by "BtoB Magazine." He's been a recognized pioneer in interactive advertising for over 10 years.

COMMENTSCommenting policy

comments powered by Disqus

Get ClickZ Email newsletters delivered right to your inbox. Subscribe today!

COMMENTS

UPCOMING EVENTS

UPCOMING TRAINING

Featured White Papers

Google My Business Listings Demystified

Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.

5 Ways to Personalize Beyond the Subject Line

5 Ways to Personalize Beyond the Subject Line
82 percent of shoppers say they would buy more items from a brand if the emails they sent were more personalized. This white paper offer five tactics that will personalize your email beyond the subject line and drive real business growth.

WEBINARS

    Information currently unavailable

Resources

Jobs

    • Executive Assistant
      Executive Assistant (Agora Inc. ) - BaltimoreAgora Inc., an international publishing company, located in the Mt. Vernon district of Baltimore, MD...
    • Paid Search Specialist
      Paid Search Specialist (Boathouse, Inc.) - Waltham  Boathouse is looking for a Paid Search Specialist to work as a part of the Digital Acquisition...
    • Paid Search / Search Engine Marketing (SEM, PPC) Specialist
      Paid Search / Search Engine Marketing (SEM, PPC) Specialist (HeBS Digital) - New YorkJOB TITLE:     Paid Search / Search Engine Marketing...