At the end of September, Google announced a new offering – Customer Match. This will have an enormous impact on email marketing, both directly and indirectly, because others will follow suit. To understand why this is such a big deal, we need to understand a bit about the online advertising world.
In terms of marketing, spend email is a very small fish. Though a powerful and effective medium, it’s just a small part of any CMO’s digital budget because an overwhelming majority of the money goes into search and display. According a study by Statista on email marketing expenditure, U.S. spending on email marketing was an estimated $2 billion in 2014. That’s barely 4 percent of the estimated $50 billion spent on digital advertising from the same period.
The dominant player in search is Google, with over 64 percent of the U.S. desktop search market and over 80 percent of the mobile market. In display, it is still a major player; only recently having fallen to second place with 13 percent of the market, according to research from eMarketer.
A new product from Google is always important to note, but you may still be wondering how this relates to email. Despite rapid growth and enormous spending, digital advertising is facing some serious challenges. Response rates are exceptionally low and targeting is extremely hit-or-miss.
Targeting has historically been based on the use of third-party cookies, which are used to track users across sites and record their activity, to build up behavioral profiles used ad targeting.
Several factors are conspiring to undermine cookies as a means of targeting; the biggest of these is the rapid adoption of mobile devices. Cookies are device – or even browser – specific. Users with multiple devices, particularly mobile devices that often do not accept third-party cookies, become very hard to track.
To address this, the major players have started tracking users through their log-ins. This method is arguably a driver behind Facebook’s rapid growth in ad income. Facebook users stay logged in and offers authentication to external sites, thus allowing the social platform to track users across the Web and across devices.
Initially, Google created Google+ to keep users logged in, enabling them to do the same. Logged in Google users are tracked across Google properties and any site where Google delivers advertising or has tracking tags.
The thing all these log-ins have in common is an email address. This is where Customer Match comes in; it enables targeting based on your own customer email lists. Such a revelation has far reaching implications for email marketers and email marketing.
There are other providers that offer this type of capability – most notably Facebook with its Custom Audiences. However, Google is making this available right now on its dominant search platform, Ad Words, and is looking to spread it to its display network in 2016.
These capabilities blur the boundaries between marketing and advertising. Campaigns can cross channels with far greater accuracy and precision than ever before. This presents huge opportunities, but it also means behavior in one channel can directly affect others.
For example, Google Customer Match terms require uploading only off of first-party collected addresses. If you’ve been using email append, list purchase, potentially even co-registration, but have not been tracking which addresses came from where, this will impact your search and ad targeting. On the flip side, using Google Customer Match requires you to provide a mechanism for customers to opt-out of email marketing – search ads could cause email unsubscriptions.
The future of digital marketing is integrated and cross-channel, and email is the key to cross-channel identity. As the custodians and managers of our companies’ email lists this opens up a range of new challenges and opportunities.
I’ll go into more detail on how email marketers can utilize Customer Match and address the requirements and possibilities they present in a future article. But as you look ahead to the coming year, remember that this is a seminal event for email marketing; 2016 is the year when adoption of email-based targeting will take off. Do yourself a favor and plan accordingly.
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