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A benchmarking survey from the DMA Email Marketing Council showed that email volumes rose by about a third from the start to the end of Q4 2004.

In December, more than 10.7 million emails were sent out by Email Service Providers (ESPs), representing 75 per cent of the industry.

A sector breakdown (see graph) reveals that retail clients were by far the biggest email broadcasters, followed by FMCG, travel and leisure and media. With retailers enjoying the largest customer base of all the sectors, it is not surprising that they dominate. Most retailers also have an online offering, so email is the ideal channel for driving on and offline sales.

One trend to emerge is the growing polarisation of the market around lower-volume and higher-volume players. Most suppliers continue to operate at the low-volume end of the market - defined as less than five million messages a month - while a significant, but smaller, chunk are in the 15 million-plus area.

Richard Gibson, chairman of the Council's Benchmarking Hub, doesn't see this changing dramatically in the future. "It isn't likely that we'll see a wholesale migration from low-volume to high-volume ESPs," he says.

"Some players see themselves as providing scalable application service provider (ASP) technology platforms, while others prefer to adopt a more intimate relationship with clients."

Regardless of the type of work ESPs carry out on behalf of clients, issues around email deliverability will always be a concern. An encouraging sign is that the level of soft bounces is at its lowest since the survey was first conduced in Q2 2004. Across B2C and B2B acquisition and retention activity, the soft bounce rate averaged 4.9 per cent. This drop from previous quarters can be partly attributed to a re-classification of the type of different bounce backs as ESPs get to grips with interrogating error messages.

The percentage of suppliers who can place a commercial value on non-delivery is growing. In Q4, almost a third of clients were able to assign a commercial value on non-delivered emails, up from 11 per cent in Q2.

As clients and their ESPs monitor conversion and delivery rates more closely, putting a figure on those emails that never make it into the inbox is becoming easier.