Preparing for the Future of E-mail Marketing

I have long argued that the future for marketing lies in one-to-one communication rather than mass broadcasts. The movement to digital, interactive media makes this inevitable. The only question in my mind is when and how it will come about.

If you’d asked me 15 years ago when I thought one-to-one communications would be the norm in direct marketing, I would probably have said by the end of the millennium. But I was vastly overly optimistic. What I’ve learned in the intervening period is that this type of change happens in fits, that the route is far from direct, and that while some things change very rapidly others take far, far longer than one would expect.

Take e-mail marketing for example. Though every e-mail service provider offers segmentation, personalization, and dynamic capabilities, many companies still do not take advantage of them. It was several years ago that industry thought-leaders started chanting the mantra “it’s no longer about batch and blast.” Despite this, today in many areas it really still is. For sure, I see some companies doing impressive things with dynamic messaging, building mailings with complex templates inserting content based on preferences, behaviors, and demographics. By and large though, what I see increasing year-on-year is the size of campaigns rather than the sophistication of those campaigns. The majority uses little more than simple segmentation and many don’t even do that.

There are a variety of reasons for this and one can point to lack of time and resources, the complexity of dynamic messaging, poor data quality, lack of sophisticated tools, and so on. I suspect one of the major causes is the medium itself. E-mail still delivers such a high return on investment (ROI) from simple bulk messaging that many marketers see little need to do much else. The cost of sending e-mail, the CPM (define), has been falling year-on-year with marketers pushing for ever lower pricing and service providers acquiescing to those requests.

The pressure toward one-to-one communications still exists and is building. I’ve mentioned the “it’s no longer about batch and blast” mantra. That was superseded by a focus on the importance of relevance (or relevancy, as some put it). This year’s watchword is engagement. This is led in part by the focus on social networking that relies so heavily on an engaged audience. Interestingly though, it’s not just marketers who are interested in engagement. ISPs are beginning to measure engagement and use it in their spam blocking calculations. They’re doing this because their subscribers are saying that they’re unhappy with the volume of communications they’re receiving.

The goal of advertising and marketing is to generate a positive ROI (define) by selling products and services. This will be done most effectively by those marketers that create engaged audiences by providing relevant and timely communications implemented through one-to-one, integrated, interactive, digital communications.

That’s a great mouthful of aspirational marketer speak, but so what? What does it mean in practice?

Clearly, marketers have to deal with the day-to-day. We have to execute campaigns needed this quarter, we have to ensure our companies’ efforts pay off now. Additionally, true one-to-one communications are hard. They require a range of capabilities and substantial expertise. These requirements are compounded by the need to integrate communications across platforms and media. The one-to-one future requires great data management and manipulation capabilities, a strong understanding of your customers, the ability to test and analyze, the ability to truly personalize communications, and processes for creating and testing context flexibly. All those buzzwords – CRM, dynamic messaging, API, multivariate testing, profile centers, behavioral targeting – are foundational technologies that need to be tested and implemented today.

What separates the great marketers from the run of the mill is the ability to look ahead, to see what’s coming, and where things are heading. Those that see the future, prepare for it, and start paving the way to it today will be the thought leaders of tomorrow.

Are you preparing for the future, or just dealing with the day-to-day?

Derek is off today. This column was originally published on May 13, 2010 on ClickZ.

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