E-mail marketing

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E-mail marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fundraising 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 old customers and to encourage customer loyalty and repeat business.
  • Sending e-mails with the purpose of acquiring new customers or convincing old customers to buy something immediately.
  • Adding advertisements in e-mails sent by other companies to their customers.
  • E-mails that are being sent on the Internet (E-mail did and does exist outside the Internet, Network E-mail, FIDO etc.)

Researchers estimate that US firms alone spent $400 million on e-mail marketing in 2006.[1]

Contents

[edit] Advantages

E-mail marketing (on the Internet) is popular with companies because:

  • Compared to other media investments such as direct mail or printed newsletters, it is less expensive.
  • Return on investment has proven to be high when done properly and e-mail marketing is often reported as second only to search marketing as the most effective online marketing tactic.[2]
  • It is instant, as opposed to a mailed advertisement, an e-mail arrives in a few seconds or minutes.
  • It lets the advertiser "push" the message to its audience, as opposed to a website that waits for customers to come in.
  • It is easy to track. An advertiser can track users via web bugs, bounce messages, un-subscribes, read-receipts, click-throughs, etc. These can be used to measure open rates, positive or negative responses, corrolate sales with marketing.
  • Advertisers can reach substantial numbers of e-mail subscribers who have opted in (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.[3]
  • Specific types of interaction with messages can trigger other messages to be automatically delivered.

[edit] Disadvantages

Many companies use e-mail marketing to communicate with existing customers, but many other companies send unsolicited bulk e-mail, also known as spam.

Illicit e-mail marketing antedates legitimate e-mail marketing, since on the early Internet (see Arpanet) it was not permitted to use the medium for commercial purposes. As a result, marketers attempting to establish themselves as legitimate businesses in e-mail marketing have had an uphill battle, hampered also by criminal spam operations billing themselves as legitimate.

It is frequently difficult for observers to distinguish between legitimate and spam e-mail marketing. First off, spammers attempt to represent themselves as legitimate operators, obfuscating the issue. Second, direct-marketing political groups such as the U.S. Direct Marketing Association (DMA) have pressured legislatures to legalize activities which many Internet operators consider to be spamming, such as the sending of "opt-out" unsolicited commercial e-mail. Third, the sheer volume of spam e-mail has led some users to mistake legitimate commercial e-mail (for instance, a mailing list to which the user subscribed) for spam — especially when the two have a similar appearance, as when messages include HTML and flashy graphics.

Due to the volume of spam e-mail on the Internet, spam filters are essential to most users. Some marketers report that legitimate commercial e-mails frequently get caught by filters, and hidden; however, it is somewhat less common for e-mail users to complain that spam filters block legitimate mail.

Companies considering an e-mail marketing program must make sure that their program does not violate spam laws such as the United States' CAN-SPAM Act (Controlling the Assault of Non-Solicited Pornography and Marketing Act)[4], the European Privacy & Electronic Communications Regulations 2003 or their Internet provider's acceptable use policy. Even if a company follows the law, if Internet mail administrators find that it is sending spam it is likely to be listed in blacklists such as SPEWS.

[edit] E-mail Marketing Services and CAN-SPAM Compliance

Because the CAN-SPAM Act of 2003 authorizes an USD 11,000 penalty per violation for spamming each individual recipient, many commercial e-mail marketers within the United States utilize a service or special software that helps ensure compliance with the Act. A variety of older systems exist which do not ensure compliance with the Act. To comply with the Act's regulation of commercial e-mail, services typically: require users to authenticate their return address and include a valid physical address, provide a one-click unsubscribe feature, and prohibit importing lists of purchased addresses which may not have given valid permission.

In addition to satisfying legal requirements, service providers stepped in to help customers to set up and manage their own e-mail marketing campaigns. The services provide e-mail templates, automatically handle subscriptions and removals, and generate statistics on how many messages were received and openned, and whether the recipients clicked on any links within the messages.

[edit] E-mail Marketing after CAN-SPAM: Opt-in E-mail Advertising

Opt-in e-mail advertising or permission marketing is a method of advertising by electronic mail wherein the recipient of the advertisement has consented to receive it. It is one of several ways developed by marketers to eliminate the disadvantages of e-mail marketing.[5]

E-mail has become a very popular mode of communication across the world. It has also become extremely popular to advertise through . Some of the many advantages of advertising through e-mail are the direct contact with the consumer and is “inexpensive, flexible, and simple to implement” (Fairhead, 2003). There are also disadvantages attached to e-mail advertising such as, alienating the consumer because of overload to messages or the advertisement getting deleted without getting read.

Permission e-mail marketing may evolve into a technology that uses a handshake protocol between sender and receiver (Fairhaed, 2003). This system is intended to eventually result in a high degree of satisfaction between consumers and marketers. 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 (often referred to as spam). Ideally, opt-in e-mail advertisements will be more personal and relevant to the consumer than untargetted advertisements.

A common example of permission marketing is a newsletter sent to a firm’s customers. Newsletters like this are a way to let customers know about 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 this newsletter.

With a foundation of opted-in contact information stored in a database, marketers can automatically send out promotional materials. The marketers can also segment their promotions to specific market segments.[6]

[edit] E-mail marketing terms

Auto-responders
Automatic replies sent by the e-mail software of the recipient after receipt of an e-mail.
Bounce messages
e-mail sent back to the server that originally sent the e-mail.
Bounce rate
Ratio of bounced e-mails to total e-mails sent.
Bulk, bulking
Terms used by spammers to refer to their line of work. Mostly synonymous with spam or UCE.
Call to action
Words in the e-mail that entice recipients to do something.
Click-through
The action of clicking on a link.
Click-through rate (CTR)
Ratio of click-throughs to total e-mails sent.
Commercial e-mail
Any e-mail sent for commercial purpose; for instance, an advertisement to buy a product or service, an order confirmation from an online store, or a paid subscription periodical delivered by e-mail. Commercial e-mail is not synonymous with spam; see unsolicited commercial e-mail below.
Demographic
Characteristic of a group of e-mail recipients.
Double opt-in
A term coined by spammers to refer to the normal operation of secure electronic mailing list software. A new subscriber first gives his/her address to the list software (for instance, on a Web page) and then confirms subscription after receiving an e-mail asking if it was really him/her. This ensures that no person can subscribe someone else out of malice or error. The intention of the term "double opt-in" is to make it appear that the confirmation is a duplication of effort; and thus, to justify not confirming subscriptions. Mail system administrators and non-spam mailing list operators refer to confirmed subscription or closed-loop opt-in.
Double opt-out
Same as Opt-In, but the recipient unsubscribes instead of subscribes. Borderline spam operations frequently make it difficult to unsubscribe from lists, in order to keep their lists large. Hard-core spam operations make it impossible -- they treat opt-out requests as confirmations that the address works and is read.
E-mail Blast
An e-mail sent to multiple recipients, intended to inform them of announcements, events or changes. A variety of methods can be used to send the same e-mail to multiple recipients: for example: using options within an e-mail program, using the mail merge option within a word processing program, or using a commercial e-mail list programs.
Express consent
A recipient agrees actively to subscribe by checking a box on a web form, paper form or by telephone. A recipient not unchecking a box is not express consent.
False positives
E-mail that is not spam but is labeled spam by a spam filter of the recipient. Note that e-mail marketers may have different opinions of what is "spam" than e-mail recipients.
Format
E-mails can be sent in plain text, HTML, or Microsoft's rich text format.
Hard bounce
Bounced e-mail that could never get through because the e-mail address doesn't exist or the domain doesn't exist.
List broker
Reseller of lists of e-mail addresses.
List building
Process of generating a list of e-mail addresses for use in e-mail campaigns.
List host
Web service that provides tools to manage large e-mail address databases and to distribute large quantities of e-mails.
List manager
Owner or operator of opt-in e-mail newsletters or databases. Also software used to maintain a mailing list.
Look and feel
Appearance, layout, design, functions & anything not directly related to the actual message on an e-mail.
Open rate
E-mail open rate measures the ratio of e-mails "opened" to the number sent or "delivered." The ratio is calculated in various ways, the most popular is: e-mails delivered (sent - hard bounces) /unique opens.
Opt-in
The action of agreeing to receive e-mails from a particular company, group of companies or associated companies, by subscribing to an e-mail list.
Opt-out
A mailing list which transmits e-mails to people who have not subscribed and lets them "opt-out" from the list. The subscribers' e-mail addresses may be harvested from the web, USENET, or other mailing lists. ISP policies and some regions' laws consider this equivalent to spamming.
Personalization
The use of technology and customer information to tailor e-mails between a business and each individual customer. Using information previously obtained about the customer, the e-mail is altered to fit that customer's stated needs as well as needs perceived by the business based on the available customer information, for the purpose of better serving the customer by anticipating needs, making the interaction efficient and satisfying for both parties and building a relationship that encourages the customer to return for subsequent purchases.
Privacy
The Privacy Act of 1974, Public Law 93-579, safeguards privacy through creating four procedural rights in personal data. It requires government agencies to show an individual any records kept on him/her; also requires agencies to follow "fair information practices" when gathering and handling personal data. It places restrictions on how agencies can share an individual's data with other people and agencies and also lets individuals sue the government for violating its provisions.
Rental list
A mailing list that can only be used once or for a limited time. The user of the list pays the owner of the list less money than if he/she would have bought the list outright. Note that this term is usually used for lists generated by address harvesting or other means; the investment made by the list creator does not correlate with the permission of the e-mail recipients. Many firms who "rent" or "buy" a list face spam complaints afterward from persons who never subscribed.
Segmentation (or Targeting)
The use of previously gathered information to send e-mails of a particular offer to a subset of the list.
Soft bounce
A soft bounce is an e-mail that gets as far as the recipient's mail server but is bounced back undelivered before it gets to the intended recipient. it might occur because the recipient's inbox is full. A soft bounce message may be deliverable at another time or may be forwarded manually by the network administrator in charge of redirecting mail on the recipient's domain. On the other hand, a hard bounce is an e-mail message that has been returned to the sender because the recipient's address is invalid.
Spam or UBE (Unsolicited Bulk e-mail)
From the sender's point-of-view, spam is a form of bulk mail, often sent to a list obtained by companies that specialize in creating e-mail distribution lists. To the receiver, it usually seems like junk e-mail. Spam is equivalent to unsolicited telemarketing calls except that the user pays for part of the message since everyone shares the cost of maintaining the Internet. Spammers typically send a piece of e-mail to a distribution list in the millions, expecting that only a tiny number of readers will respond to their offer. The term spam is said to derive from a famous Monty Python sketch ("Well, we have Spam, tomato & Spam, egg & Spam, Egg, bacon & Spam...") that was current when spam first began arriving on the Internet. SPAM is a trademarked Hormel meat product that was well-known in the U.S. Armed Forces during World War II.
Spam filter
Software that is usually installed in the users e-mail client, with the purpose of avoiding spam e-mail to get into the client's inbox or at least to be flagged as such.
Subject line
It is one of the most important issues in e-mail marketing. The better the subject line of an e-mail, the better probability of being opened by the recipient.
Targeting (or segmentation)
Sending e-mails to a subset of a mailing list based on a specific filter, trying to improve CTR and/or open ratios.
Tracking
The act of reporting CTR, open ratios, bounces, etc.
Trigger based messaging
Triggering a message based on an event or interaction with a previous message. Popular for customers who request more information
Unique click
During a particular period, a visitor to a website could click several times on a particular link, but during that period it is counted only as one and considered a unique visitor.
Unsolicited commercial e-mail (UCE)
The subset of e-mail spam that is also commercial, usually of an advertising nature, sent at the expense of the recipient without his or her permission. Sending UCE is an offense against all major ISPs' terms of service, and is a crime in some jurisdictions.

[edit] Trigger Scoring

Trigger Scoring is a way of profiling a web audience through behavioural & trend analysis, most commonly applied to E-mail Marketing.

A Trigger Scoring Campaign will segment an e-mail database (or “list”) into qualified profile groups. This allows Online Marketers to target profile groups with highly relevent and engaging content.

A Trigger can be in the form of an Open, Click, Site Session, Page View or whatever the web publisher has defined. Each Trigger is given a value and the user accumulates an overall score over a period of time based on how many Triggers they actioned.

List segmenting or 'qualifying' is done when an e-mail database is scored at the campaign end. Users with high, medium or low scores are streamed onto varying strength email campaigns.

  1. ^ DMA: "The Power of Direct Marketing: ROI, Sales, Expenditures and Employment in the U.S., 2006-2007 Edition", Direct Marketing Association, October 2006
  2. ^ Brownlow, M: "Why do email marketing?", Email Marketing Reports, March 2007
  3. ^ Pew Internet & American Life Project, "Tracking surveys", March 2000 – December 2006
  4. ^ The CAN-SPAM Act of 2003 online at ftc.gov or PDF Version
  5. ^ Fairhead, N. (2003) “All hail the brave new world of permission marketing via email” (Media 16, August 2003)
  6. ^ O'Brian J. & Montazemia, A. (2004) Management Information Systems (Canada: McGraw-Hill Ryerson Ltd.)

[edit] External links

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