Today’s Forecast: A Bright Tomorrow

I’m a sucker for eMarketer’s reports. It must be the charts and graphs in the red-and-black color scheme. All that data, so neatly compiled and artfully presented…

It could also be because the future of email marketing looks bright, according to the recently released eMail Marketing Report.

The dollar forecasts alone should make you feel good, no matter what side of the equation you’re on. Dollars spent on email marketing are expected to rise from $1 billion in 2000 to almost $4.6 billion by the end of 2003.

I contacted Jonathan Jackson, eMarketer’s senior email marketing analyst and chief author, to get the scoop behind the report. What surprised him in putting it together? What results were different from those he expected?

Here are a few of his comments, along with some of my observations.

First of all, no big surprises, Jackson said. As in the early days of the banner ad, there is “built-up momentum” that bodes well for email marketing’s continued growth as a piece of the online and offline marketing pie.

One notable statistic: Email advertising will double as a percentage of total online advertising dollars — from 7 percent of the total in 2000 to 14 percent in 2003.

Still, it’s interesting to note that spending on email marketing is significantly lower than it is for banner ads. According to Jackson, the most recent figures (2000) from the Interactive Advertising Bureau state that 52 percent of e-advertising spending was for banners, compared with only 2 percent for email.

Jackson thinks the 2 percent for email sounds low. He expects “a steady ramp-up in online advertising expenditures overall, with a particular spike in spending on email advertising.”

Front- Versus Back-Seat Driver

An interesting chicken-and-egg discussion popped up recently on the Ad/Marketing discussion list, debating which is more important: email marketing or your Web site?

It was prompted by an “email manifesto” issued by Nonprofit Online News Publisher Michael Gilbert, who essentially says this: Without an email strategy to drive visitors to your site, all the time, money, and technology spent on Web sites are wasted.

Jackson takes up this issue in his new report, asking whether email is a front- or back-seat driver of site traffic. “Definitely a front-seat driver,” he says, acknowledging that the numbers in the report are probably outdated.

According to a 1999 study by IMT Strategies, 46.0 percent of Internet users discover new Web sites through search engines; 20.3 percent by word of mouth; and 19.9 percent by random surfing. Then the percentages drop off steeply. TV sends 1.4 percent to sites; email sends 1.2 percent; and banner ads trail at a mere 0.9 percent.

I’d be interested to hear your thoughts on which strategy should come first: email or Web?

Will Response Rates Drop?

Email marketing is still behind banner advertising in its life cycle. Thus, the “newness factor” giving email response rates a lift may last only a few more quarters, according to Jackson.

It could be that developing a coherent email marketing strategy and then launching a systematic, long-term program is just more complicated than it is for banner advertising. From getting and keeping permission to dealing with privacy issues to testing multiple lists, offers, and creative, email marketing can be daunting.

(Luckily, there are agencies, consultants, and a myriad vendor solutions standing by to help!)

Roadblocks to B2B Email

As for B2B email marketing, Jackson is bothered by the roadblocks that make it more difficult to execute with the latest bells and whistles. It’s still harder to find good rental lists, for example, while corporate firewalls “are stripping out some of the fun stuff” (in some cases HTML, in many cases audio or video-streaming attachments).

I asked Jackson what numbers he had to back this up — and there aren’t any that he knows of. The corporate firewall problem remains anecdotal. If anyone has stats to support (or disprove) the notion that B2B creative is limited by firewalls, let me know.

A Great Free Trial

Finally, I can’t resist passing along this tip: You can spend 24 hours — for free — mining eMarketer’s new eStat Database for all the stats and facts you could possibly want that relate to email and online marketing.

If you are really energetic and focused, you can download virtually all of the charts contained in the new eMail Marketing Report during your free trial. (Continued access to the database costs $2,500 per seat.)

Go to eMarketer’s home page to sign up for the free trial. The clock starts ticking as soon as your username and password are sent.

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