Broadband Gains Impact E-Mail Optimization

A profound shift in Internet access and online marketing is accelerating. They say speed kills, which may mean bad news for dial-up access providers as well as marketers who don’t focus on email optimization in a changing marketplace.

The Market Shift

AOL, the largest provider of Internet access services, recently announced its first-ever quarterly decline in dial-up subscribers. The other dial-up providers that make up the “Big Three,” MSN and EarthLink, are also experiencing either flat or negative growth.

At the same time, high-speed broadband subscriptions are jumping. According to a recent Nielsen//NetRatings study, the number of broadband users has increased by nearly 60 percent year over year, which starkly contrasts with the surprising 10 percent drop in the number of people who use dial-up access at home. Broadband users now account for an impressive 31 percent of the at-home unique Internet audience, which was estimated at 108 million in December 2002. Analysts expect the broadband adoption trend to continue as the high-speed infrastructure continues to expand.

The escalation in broadband use among consumers has appeared to catch many of the big dial-up providers off-guard. MSN, for example, has not grown its subscriber base despite spending millions of dollars to promote its new “butterfly” brand. As a marketer, don’t let the accelerated adoption of broadband catch you off-guard. The growing popularity of broadband presents email marketers with tremendous opportunities and even potential pitfalls. So what does it mean to marketers looking to optimize their email communication efforts in the new marketplace? Here’s a look at the opportunities and potential pitfalls to stay on top of.

Opportunities

The promise of a broadband world is exciting and can offer many thrilling opportunities for marketers, including:

  • Improved optimization. No one enjoys long load times when opening an email or attachment from a business, colleague, friend, or family member. When you’re dealing with dial-up recipients, keeping an email’s file size as small as possible is a priority, so text-only and small HTML files are the optimal formats for the slower-connection crowd.

    Unfortunately, using these simpler formats means marketers get less information in their reports and fewer variables to test. Therefore, these formats offer less data that can be leveraged to optimize future campaigns.

    The emergence of broadband allows marketers and individuals to dialogue via more information-rich messaging with fewer file-size constraints. This is a boon for marketers who love to slice and dice their database, systematically test different variables, and optimize every subsequent campaign based on previous results and profile information.

  • Better online experience. Another bonus of a high-speed connection is an improved overall online experience. After a recipient clicks on a link in an email, the landing page will load much more quickly, thereby providing a smoother path to conversion. Broadband users also tend to spend more time online and view more than twice as many pages as narrowband subscribers. More time online equals more time with your marketing messages and brand, which can lead to higher loyalty. In addition, this means marketers have more opportunities to collect richer preference information from their customers — great reasons to be pumped about the adoption of high-speed access.
  • Greater rich media use. Rich media email (Flash, streaming audio/video) was supposed to take email marketing by storm and deliver the “television experience” directly to the inbox, but it didn’t exactly happen as quickly as originally anticipated. Well, the storm clouds may finally start to gather now that more people are logging on to the Internet at higher connection speeds, which improves the probability of recipients accepting and appreciating rich media email messages. Why is this important? Well, rich media may just help you get the results you desire. Still, it depends.

    Don’t go with rich media just for the sake of using it. Use the power and advantages of email to test the creative — but do so only when it’s relevant to the product/service, goal of the message, and the industry. Using it in categories such as automotive and events may make sense, because of the nature of the message and product. In one side-by-side test we recently conducted for a client, a Flash email version had a 40 percent higher CTR than the traditional HTML version. That’s powerful — but only when it’s reaching a critical mass. Luckily, that’s getting there thanks to the increased adoption of broadband.

Now for the potential pitfalls.

Pitfalls

There are many things you should consider before you jump on the broadband marketing bandwagon. Here are some quick and important areas to keep in mind as millions make the move to broadband:

  • Missing customers. Are you tracking your unsubscribes and bounces rates? Although relevance and value play an enormous part in unsubscribes, bounce rates can also be a potentially negative byproduct of millions of people changing to a new ISP or upgrading to broadband. Marketers must be conscious of market conditions and bounce rates to optimize delivery and to avoid an email list becoming littered with invalid email addresses.

  • A wildcard: Microsoft Outlook 11. Microsoft is expected to ship a new version of its hugely popular Outlook email client later this year. According to the scuttlebutt, Outlook 11 has a default setting to convert all incoming messages to text format when they are viewed in the preview window. HTML and rich media would be served only if the message is opened. If users do not actively change the default settings, then response rates could be negatively impacted, since HTML outperforms text in most cases.

    In addition, the ability to determine if the recipient’s email client supports HTML could be hampered, along with the ability to tell if an email has been opened. Since Outlook is the most widespread email client in use, the possible outcome is that all of your super HTML and rich media email plans could be thrown a curveball. Outlook 11 is still in beta, but this is definitely looming as a potentially huge issue for all email marketers. Stay tuned for more information on this topic in the future.

What to Do?

Though developing a rich media campaign may make sense for some, it still may be premature for others — however, preparing for the future is a must for everyone. Marketers must watch industry trends and develop strategies to address a rapidly changing marketplace to maintain competitive advantage. Here are optimization tips you can implement today to be prepared for tomorrow:

  1. Comprehensive preference center and survey strategy. Capture connection speed, and survey consumers about their preferences and interests regarding the formats they would like to receive (text, HTML, even rich media — you may be surprised). Assess the value and relevance of rich media to your various customer segments and specific product or service offering. Use the preference page as a mechanism for customers to update their email addresses at their convenience.

  2. Relevant testing to access the value. Next, build a segment of broadband users for a rich media test campaign. It’s not always easy, but do what you can with the data you have. Look at your list composition and build a separate segment containing known broadband users within your customer list. For example, optonline.net (Optimum Online) and rr.com (Road Runner)> are telltale broadband domains, and even the most basic email campaign management tools can sort a list by domain. Though dial-up access users can view rich media email in many cases, the experience is typically not as vivid, so the safer scenario is to get your feet wet with your broadband segment.
  3. Touch point analysis/strategy. Leverage all customer touch points to ensure you have accurate email addresses on file. If you identify a segment of highly profitable customers with undeliverable email addresses, it may be worth reaching out to them by mail or phone to collect their new email addresses.
  4. E-mail change of address (ECOA). Another good solution to explore is a permission-based ECOA program. List turnover is highly common in email marketing; in fact, studies have found approximately 30 percent of email addresses change each year. Given consumers’ accelerated switching of ISPs, marketers must develop a recapture strategy if the aforementioned strategies fail. An ECOA program matches your “dead” addresses with more current email addresses that have been given to the ECOA provider on an opt-in basis. Consumers either give permission up front to allow marketers to receive updates or ask ECOA services to inform them and ask their permission at the time of the marketer’s request for an updated address.

    An ongoing ECOA program can help reconnect with valuable segments and may recapture up to 5 to 10 percent of lost addresses each year. Remember, success begins and often ends with the accuracy of your list. It’s tough enough to acquire new customers today — can you afford to let your best customers slip away just because they’ve changed their email addresses?

The Final Word

Build a strategy that takes into consideration relevance, the changing marketplace, the composition of you email list, your customer touch points, and the numerous internal/external resources available to you. And, for now, continue to create campaigns geared toward the lowest common dominator based on your available database intelligence. In summary, play it safe, but start building your competitive advantages today for a future that will most likely be dominated by broadband.

Until next time…

Al D.

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