Email Marketing

E-mail marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fund-raising messages to an audience. In its broadest sense, every e-mail sent to a potential or current customer could be considered e-mail marketing. However, the term is usually used to refer to:

• sending e-mails with the purpose of enhancing the relationship of a merchant with its current or previous customers, to encourage customer loyalty and repeat business
• sending e-mails with the purpose of acquiring new customers or convincing current customers to purchase something immediately
• adding advertisements to e-mails sent by other companies to their customers

Researchers estimate that United States firms alone spent US $400 million on e-mail marketing in 2006.

Comparison to traditional mail

There are both advantages and disadvantages to using e-mail marketing in comparison to traditional advertising mail.

Advantages

E-mail marketing (on the Internet) is popular with companies for several reasons:

• An exact return on investment can be tracked (“track to basket”) and has proven to be high when done properly. E-mail marketing is often reported as second only to search marketing as the most effective online marketing tactic
• Advertisers can reach substantial numbers of e-mail subscribers who have opted in (i.e., consented) to receive e-mail communications on subjects of interest to them
• Over half of Internet users check or send e-mail on a typical day

Disadvantages

A report issued by the e-mail services company Return Path, as of mid-2008 e-mail deliverability is still an issue for legitimate marketers. According to the report, legitimate e-mail servers averaged a delivery rate of 56%; twenty percent of the messages were rejected, and eight percent were filtered.

Companies considering the use of an e-mail marketing program must make sure that their program does not violate spam laws such as the United States’ (CAN-SPAM) Act, the European Privacy and Electronic Communications Regulations 2003, or their Internet service provider’s acceptable use policy.

Opt-in e-mail advertising

Opt-in e-mail advertising, or permission marketing, is a method of advertising via e-mail whereby the recipient of the advertisement has consented to receive it. This method is one of several developed by marketers to eliminate the disadvantages of e-mail marketing.

Opt-in e-mail marketing may evolve into a technology that uses a handshake protocol between the sender and receiver. If opt-in e-mail advertising is used, the material that is e-mailed to consumers will be “anticipated”. It is assumed that the consumer wants to receive it, which makes it unlike unsolicited advertisements sent to the consumer. Ideally, opt-in e-mail advertisements will be more personal and relevant to the consumer than untargeted advertisements.

A common example of permission marketing is a newsletter sent to an advertising firm’s customers. Such newsletters inform customers of upcoming events or promotions, or new products. In this type of advertising, a company that wants to send a newsletter to their customers may ask them at the point of purchase if they would like to receive the newsletter.

With a foundation of opted-in contact information stored in their database, marketers can send out promotional materials automatically—known as Drip Marketing. They can also segment their promotions to specific market segments.