That was the sound of your email service provider (ESP) being swallowed by a larger conglomerate.
It’s getting so you need a scorecard to keep track of this game. In just the past year or so, database marketing services vendors have been snapping up their email counterparts. Acxiom bought Digital Impact; Experian nabbed CheetahMail; Harte-Hanks acquired Postfuture; infoUSA snagged Yesmail; Alliance Data Systems’ Epsilon picked up BigFoot Interactive; JL Halsey bought Lyris in May; and, not yet sated, it snapped up EmailLabs this month. DoubleClick’s DARTMail is widely thought to be a sale waiting to happen.
Several of these buyers have let it be known they’re still shopping for ESPs. Others, such as Fair Isaac and Merkle, are expected to jump into the ESP game at any moment.
Whether your ESP is standalone or part of a conglomerate, it’s almost certainly gotten into analytics. Experian bought Web analytics firm Harvest Solutions. ExactTarget integrated its email platform with WebTrends. Digital River acquired both ESP BlueHornet and Web analytics provider Fireclick. Analytics players Coremetrics and WebSideStory have both built extensive partner programs. Each has integrated its platform with a number of ESP partners.
E-mail is moving from being a pure technology service to becoming part of an online marketing services palette. But how important is that to companies that send commercial email? And have all these ESPs gotten the technology part right before hitching up with larger partners that will try to up- and cross-sell their clients?
Not Ready for Prime Time Technology
Jupiter Research just issued its “E-mail Marketing Buyer’s Guide, 2005,” which evaluates 30 ESPs in depth.
An alarming number of them don’t include what the report calls “basic and mission-critical compliance features.” Testing and CAN-SPAM support were found in only 66 percent and 63 percent of applications, respectively. New FCC wireless domain suppression requirements are met by 60 percent of ESPs. The rest either charge a fee to meet the requirements or don’t meet them at all.
Shopping for an ESP? The prospect of being on the wrong side of compliance should be an instant deal breaker.
What do buyers look for? According to Jupiter Research’s report: cost, reputation, and delivery — in that order. Tactical and strategic abilities are among the last considerations. And although things may soon change, standout technical innovations haven’t been forthcoming in the ESP space for a long while.
For marketers concerned with price, David Daniels, author of Jupiter Research’s report, suggests seeking a two- to three-year engagement with an ESP to drive down the price. Forrester’s Shar VanBoskirk, who’s authoring a soon-to-be-published ESP study, believes “email service providers offer very similar services. It’s up to marketers to find the ESP that fits their needs.”
A fit may correspond more with corporate culture than tech requirements, she thinks. Service-oriented companies may want more of an agency approach, for example, while a high-tech concern may be more comfortable with an ESP focused on technology.
Is Bigger Better?
What about all those rollups? Are marketers better off with a standalone ESP or an agency that offers email as well as a wide variety of other services, online and off-?
“I don’t necessarily think that bigger is better,” Daniels told me. “That hypothesis certainly hasn’t been proven. They’re certainly not new. Experian tried this years ago with Exactis. Equifax tried this. DoubleClick. There are probably more examples of this not working than working.”
He points out that, for better or worse, email marketers remain islands unto themselves within marketing organizations. Rarely are they responsible for paid search or banner placement, and certainly not for offline marketing. Daniels believes the new rollups face a long, tough sales process. “You’ve got to convince three or four people that there’s value in bringing all this together.”
Even those marketers who do have a responsibility for the totality of online marketing likely outsource site search, publishing, and metrics to different vendors. “These disciplines within the Internet are still young enough. People don’t want to put all their eggs in one basket,” said Daniels.
Analytics is the exception. It certainly ought to be integrated into any email program. But higher-volume marketers who care about this already have relationships with Web metrics vendors.
Would you change analytics vendors to match an email program? “I’d have to retag my site and change my content development process,” reminds Daniels. “Web analytics are very embedded into the content production process. Switching analytics vendors is a much greater hump to get over than switching your ESP. ESPs really have to be focused on integration and the ease of integration.”
Large retailers also have relationships with data companies that often go back decades. Data organizations such as Epsilon may view Bigfoot’s clients as potential new customers, but it’s unlikely an organization of Sears’ proportions would switch data providers for the sake of their email programs.
Both Daniels and VanBoskirk expect ESP consolidation and acquisitions to continue. Bigger companies can offer more resources, and potentially better pricing, to clients who avail themselves of multiple services. But size, VanBoskirk reminded me, “doesn’t automatically equate to better service or more innovation.”
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