An e-mail newsletter is a great way to build relationships that drive leads, sales, engagement and/or retention. But what many organizations overlook is that it can also be a tool to generate third-party advertising revenue for your business.
Many organizations are reporting on the growth of e-mail and online advertising and marketing:
- In April eMarketer reported that the Internet’s share of total media ad spend is rising by at least one percentage point every year. It cites a shift in dollars as marketers spend more on Internet advertising and less on ads in traditional (offline) media.
- Forrester Research projected that spending on e-mail marketing in the U.S. will grow steadily to $2 billion by 2014, which is almost an 11 percent compound annual growth rate (June). It cites falling CPMs (define) and high ROI (define) as key factors.
- Borrell Associates, in a May report, noted that e-mail advertising is skyrocketing while its traditional (offline) counterpart plummets.
- The Interactive Advertising Bureau credits e-mail advertising, including banner ads, links or advertiser sponsorships that appear in e-mail newsletters, e-mail marketing campaigns and other commercial e-mail communications, with generating $468 million in revenue in 2008, up from $424 million in 2007.
While advertising in e-mail newsletters is a small portion of these big numbers, it can be a significant contributor to your bottom line if done properly.
Many large publishers rely on the same ad sales team to sell both print and online placements. This makes sense, since anyone buying offline advertising is a good candidate to buy online. But e-mail newsletter advertising is a different animal from print, and a different sales approach needs to be taken.
Here are some keys to success for selling e-mail newsletter advertising:
Online offers quantitative data on performance, which most offline channels (like print advertising) do not. Many ad sales reps shy away from the numbers because they aren’t used to selling this way and they don’t necessarily understand them. This is a mistake.
To those unfamiliar with e-mail a 23.4 percent open rate, 7.6 percent overall click-through rate and 0.30 percent average click-through rate on banner advertising doesn’t look very impressive. Many print sales reps are embarrassed by what they see as “low” figures. But when you compare these to industry benchmarks, the picture is much brighter.
The EpsilonQ1 2009 E-mail Trends and Benchmarks Report pegs average open rates at 22.1 percent and overall click-through rates at 6.1 percent. DoubleClick’s 2008 Year-in-Review Benchmarks Report cites an average banner ad click-through rate of 0.10 percent. A side-by-side comparison can educate buyers unfamiliar with e-mail newsletter advertising and make the case for the value of spending a portion of their ad budget with you.
Put Thought Into the Ad Sizes you Offer
Not all banner advertising is equal; size does matter. The DoubleClick 2008 Year-in-Review Benchmarks Report cites average click-through rates on static image banner ads from 0.37 percent to 0.07 percent, depending on their size. While some larger ad formats are difficult to accommodate in an e-mail newsletter, there are a variety of smaller formats that work nicely.
When you design your e-mail newsletter, be sure to include ads in standard sizes and to incorporate, whenever possible, the ad sizes shown to drive higher click-through rates.
I come from the publishing world, so I understand the importance of keeping editorial separate from advertising. You don’t want readers to think your editorial is being influenced by who advertises in your publication.
One mistake that many newsletters make however is completely separating advertising from editorial. I am currently revamping an e-mail newsletter template for a client that has had editorial in the body and almost all the advertising in the right-hand column. This makes it easy for readers to just read the editorial and skip the advertising.
Don’t do this. While you don’t want to overwhelm your readers with advertising (we’ll cover the 60-40 rule in my next column), commingling these spaces with the editorial content will help them be seen. Just be sure to note what is advertising, either by shading the background or including the word “advertising” or “sponsorship” at the top of the ad in a small font. This usually isn’t necessary for traditional banner ads, but can be important for text advertising and anything that doesn’t “look” like an ad.
In my next column, I’ll cover four more tips for effective ways to generate revenue from advertising in your e-mail newsletter.