Why e-mail is destined to remain the best-performing, yet least appreciated marketing medium.
Advertising in television is tough. It's expensive, it's competitive, and it's cutthroat. The channel has withstood the transition from over-the-air transmission to cable to HD. It survived the invention of the VCR, DVD, and DVR. And so far, it has survived the Internet.
The fact that television has survived as a legitimate marketing channel - and has even thrived - this far into the "time-shifting" era of today's Internet is tribute not only to its near-universal reach, stable format, and desirable content, but perhaps most importantly to its ad-selling model.
In a post a couple of weeks ago, Mark Cuban, the Dallas Mavericks and HDNet owner who made his fortune selling Broadcast.com to Yahoo for almost $6 billion, makes the case that the reason TV has survived where CDs, DVDs, magazines, and newspapers have failed is because TV is sold in aggregated, not single, advertising units.
TV monetization sounds a lot like retention and acquisition e-mail marketing to me.
Like television, e-mail is almost always sold as a large undifferentiated unit. That unit is "audience." If you are an advertiser and you want to market your product in the e-mail channel, you are buying in a very similar way to TV - you find a newsletter (aka channel) or publisher network (aka network) and you get the rate card. The publisher tells you what the audience looks like and quotes you a price based on the audience size, the content (show) it's running against, and the time of the deployment (prime time).
Television doesn't always appear very targeted. But have you ever watched the evening national network news? It's almost all denture ads and personal incontinence products. In cable, there are some services that allow spot-buying, but for the most part, you buy the whole audience or none at all, and you're buying the audience that Nielsen says is watching that show - audience selection without any sophisticated behavioral or demographic mapping.
E-mail is a little more flexible in this regard - if you're lucky you may find a publisher who's willing to sell you a fraction of their audience - such as "female purchasers," but as soon as you try to cherry pick your target audience, your CPM rates soar and campaign turnaround gets slower and slower.
Audience measurement is an inexact science in both television and e-mail. The biggest mystery to any media buyer purchasing television or e-mail is: with all the cable boxes and the website sign-up forms, why don't we know more?
Compared to Internet display advertising, with its behavioral and demographic targeting, audience reporting, heat-mapping, ad verification, and frequency control, TV and e-mail are practically stone-aged. Does your cable box fire pixels and drop cookies, or even keep track and suggest shows you should watch? Neither does mine. If you spend all of your time watching monster trucks and Ultimate Fighting and fishing shows, you should probably be seeing more John Deere and less Jenny Craig, right? Nope. In TV, you cannot buy by the drink - only by the bottle. What's in the bottle?
Who knows! And no one's telling.
Both television and e-mail are long overdue for a change in their audience selling models. In display, we've seen the rise of demand side platforms and exchanges. Companies like eXelate, BlueKai, and Acerno track the sites you visit and sell your pageviews in predictive segments. Companies like Rapleaf find you on social sites and sell your data to marketers based on your demographic. Media6Degrees, 33Across, and Lotame create segments based on affinity.
Barely any of this audience purchasing sophistication has crept into e-mail, and none has made its way into TV ad buying. As a result, advertisers get a monolithic audience experience that doesn't account for all the different people seeing their content.
Boxee and Google TV are trying to shake things up and change the way TV is watched and bought. When can we expect to see the same sort of shake up in e-mail? Until e-mail becomes more like display and tools are built to do things other than to block spam, it's destined to remain the best-performing, yet least appreciated marketing medium ever devised by mankind.
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As president of LiveIntent, Dave Hendricks has overall responsibility for revenue, finance, legal, and operations. Prior to joining LiveIntent before its 2009 Series A, Dave was EVP of operations at PulsePoint (then known as Datran Media), where he worked with LiveIntent founder and CEO Matt Keiser and ran Datran's ESP StormPost. Before all that, Dave held senior roles at data management companies InfoUSA and Experian. A member of the founding executive team at ExperianCheetahMail, Dave began his email adventure at Pioneering ESP MessageMedia after running global partnerships for Oracle Corp. Dave was named one of Silicon Alley Insiders Top 100 technologists in 2011 and is active in several IAB Committees including Mobile and Email. Follow him on Twitter @davehendricks.
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