Digital Thoughts: The Return of Email?
by Sam Harrelson
RSS, web
placements, registration path lead generation, rich media,
contextual desktop advertising and a whole host of other
suitors stand eagerly at the door awaiting to take the place
of our once beloved email marketing channel. Email was the
golden child of online direct response marketing.
Advertisers and agencies threw money at email marketing
firms who could tout their 15 million name file. It seemed
as if the good days would only get better and soon email
marketing looked a good deal like a boom town during the
California Gold Rush in 1849.
However,
the gold eventually ran out, and those who came for riches
often found disappointment. Many returned to their lives
back East, but a few stalwarts stayed around, determined to
build a new life and find fortune somehow in the California
sun. The same scenario can be observed in email marketing,
except many of the gold-diggers went to Boca Raton rather
than the Sierra Nevada’s for their riches. The mad rush of
1999-2001 in email marketing found a saturated market full
of spam-angry consumers who were seeking relief from the
inundation of their inboxes. Tough state laws and finally
CAN-SPAM was passed, and the email marketing was thrust into
the spotlight and tainted with the stain of spam.
Over the
last two weeks, I’ve had conversations with a few major
agencies known for their email marketing specialty and
networks who were once heavily dependent on the email
channel for their revenue. Most reported that as much as
90-95% of their revenue came from email marketing just a
year to eighteen months ago. However, they consistently
said that the revenue their agency or network receives from
email has dropped by 50-75% but their overall revenues have
continued to increase. This paradox is solved by these
players’ abilities to diversify away from email marketing
and find alternate channels such as desktop and web
placement that have made up for the slack left in the email
vacuum. Even without email, they are all seeing
profitability.
That
amazed me. How can these networks and agencies so heavily
dependent on email just a year or so ago accommodate the
devaluation of email marketing quickly enough to see their
overall revenue increase rather than decrease? The answer
lies in our industry’s incredible ability to quickly adjust
to market forces. I would attribute this to the industry’s
free-market nature that stresses efficiency and
optimization. However, this reliance on marketing forces
has also been one of the downfalls of online direct response
marketing, particularly the email marketing sector because
the early days of email marketing resembled a gold rush boom
town where the law was enforced rather sparingly and
marketers were allowed to use whatever means they saw fit to
make the most revenue.
Now that
the email marketing industry has undergone closer scrutiny
and calls for transparency, there is a great opportunity for
growth in the space. The barrier to entry for profitable
and responsible email marketing is much higher than just a
year or two years ago, and therefore it can be assumed that
the players in the sector are able to provide better
services to their clients. If email can find its footing
and stress permission, responsibility and transparency to
consumers and advertisers, it stands to reposition itself as
a channel of quality communication between marketers and the
public.
Sam Harrelson
is the Co-Editor of the Digital Moses Confidential. Send comments and questions
to sam@digitalmoses.com
