On the face of it, everything in the email marketing garden is looking rosy. As the medium becomes more established, an increasing number of companies are turning to email to personalise their communications with their customers, for a fraction of the cost of running a direct-mail campaign.
Emailing volumes are up by an impressive 30 per cent in the first quarter of 2006, compared with Q1 2005, according to the Direct Marketing Association (DMA), while clickthrough rates for retention emails are holding steady at 10 per cent. It's also good news on the acquisition front, with rates increasing from six per cent to eight per cent. Research from email service provider (ESP) CheetahMail reveals that in December, 5.9 per cent of clickthroughs from marketing emails led to a transaction, with an average order value of £40 for the month, peaking at £130 at the end of December.
Yet there's a considerable cloud on the horizon: deliverability. As the volume of spam continues to increase, internet service providers (ISPs) are raising their game in the fight to protect their customers' inboxes with the result that, along with the spam, legitimate marketing emails that consumers have opted in to receive are now being blocked. In the DMA's most recent National Email Benchmarking Report, the number of ESPs reporting that five per cent or more of their retention emails had been blocked in error in Q2 2006, had doubled, compared with Q1. So how big a problem is email deliverability, and what can the ESPs do about it?
"I have a lot of sympathy with the ISPs, who are trying to cope with so much spam," says Simone Barratt, managing director of e-Dialog UK. "They are playing the role of gatekeepers, and sometimes they block some legitimate email along with the spam. But it's a huge cost for them and I am in favour of the efforts they are making to try to block spam."
Matthew Keller, commercial director at Redeye International, also appreciates the problem that ISPs face.
"They are caught between a rock and a hard place," he says. "The consumer is their customer, so that has to be their primary focus. They can't be seen to side on an industry-wide level with the mailers. Even if their customers hit a button to say that an email is spam when they had signed up to receive it, the ISP's role is not to say it isn't."
Email etiquette
e-Dialog's Barratt points to four key tactics that ESPs need to employ to help maintain good deliverability rates. These include: getting the permissions right when the email address is first captured; list hygiene, in terms of removing people from your mailing lists when they ask you to do so; maintaining good relationships with the ISPs and, most importantly, sending good emails in the first instance.
"If you're sending emails to people who want them and you're sending the right sort of messages, they will not opt out and complain about you to the ISPs, which is one of the key things that gets you blocked," she says.
This strikes a chord with Jason McNamara, head of Alterian's online division, who says the key to emails staying in the consumer's inbox is the ability to control and manage two things: relevancy and permission.
"Permission is easy," says McNamara. "You either have permission to email an individual or you don't. Relevancy is key to deliverability. Marketers can't control much of what happens with ISPs and email authentication as it relates to delivery, but they can control relevancy."
As McNamara points out, relevancy also gives the best return on investment.
"Given that 88 per cent of email is delivered, that only leaves 12 per cent to make any improvement on," he says. "Research has shown that relevant email generates nine times the revenue and 18 times the profit. If you work the numbers, it becomes very clear that a marketer's time is best spent making the 88 per cent delivered relevant, to improve overall conversion rates and campaign ROI."
After the email itself, the relationship an ESP enjoys with an ISP is probably the second most important factor in maintaining good deliverability rates.
"It's critical to build relationships with ISPs so that they recognise that email originating from your servers is legitimate." says Tom Morgan, managing director of email agency EDR.
But there's more to it than personal relationships. It's also a question of understanding how each ISP works.
"ISP relations used to be the phone number of someone to call if we accidentally sent some spam," says Dax Hamman, international operations manager at Bluestreak. "Now we have a throttle control that allows us to regulate the speed at which we deliver emails to any given ISP or domain. This allows us to cope if an ISP is maxed out and, in some instances, to stay below certain thresholds, say 30,000 mails per hour, that we know are considered to be more favourable by an ISP."
And, as Mike Weston, managing director of Silverpop points out, the deliverability landscape changes fast, as individual ISPs bring in new rules to cope with spam.
"What you can do today will not necessarily work tomorrow or with a different ISP," he says. And however good an ESP's or brand's relationship is with a client, it can only take them so far.
"A lot of companies in our business talk about the importance of having good relationships with the ISPs," adds Weston. "This might help when something goes wrong the first time. But if you have not got the basics right, no amount of personal relationship will help you the second or third time round. If you are doing things the wrong way, you are going to get a problem sooner or later, and sweet talking your way out of it will not work for long. ISPs have no vested interest in getting a message through. It's far easier for them to say no."
Payment plan
The latest initiative in the battle against spam is Goodmail. This service accredits ESPs and individual client companies and then, for a fee, guarantees that their emails will be delivered to its ISP partners. Part of the fee is paid to the ISP. Goodmail-certified emails are flagged in the consumer's inbox to identify them. The service has been operating in the US since May 2006, initially with AOL and now also with Yahoo! and it is set to launch in the UK with AOL in the second quarter of this year. But is Goodmail the answer to the spam problem? "It's a clever idea," says Bluestreak's Hamman. "But I think it will be a lot trickier in the UK than in the US. You also have to jump through hoops to prove you're following best practice and to be approved by Goodmail. If you're doing all those things and your emails are still not getting through, the answer is not to pay for such a service but to look at your email programme and see why it's not working."
Paul Cox, director of commercial services at MC&C, says Goodmail is "against the spirit of the internet".
"If you have good continuous contact and dialogue with your base, a decent deliverability team at your supplier, clean data, a good set-up configuration and single-click unsubscribe, deliverability should not be an issue," he says.
And Alterian's McNamara points out that systems like Goodmail are not that new.
"The fact is that email authentication has been available to marketers for some time," he says. "Return Path, IronPort and Habeas have been offering pay-for-delivery type of services for years. What makes Goodmail interesting is its relationship and exclusive agreement with AOL. It offers a good solution, but it's not for everyone and doesn't solve all the email marketer's delivery issues."
Certainly, it's hard to find too much enthusiasm for Goodmail among ESPs or clients, although one or two are planning to trial the service. While the service is limited to just one ISP, its appeal may be shortlived. But so thorny is the spam issue that if Goodmail gets buy-in from the other big players, ESPs and their clients, many may find themselves with little option but to get on board.
POWER POINTS
- Legitimate marketing emails risk being blocked
- Relevancy gives the best return on investment
- A good working relationship between ESP and ISP will help deliverability rates
THE BIG ISSUE - WILL CLIENTS PAY FOR EMAIL DELIVERY?
In the DMA's National Email Benchmarking Report for Q1 2006, published last summer, ESPs were asked whether their clients would pay to guarantee delivery of emails, and how much. Over 65 per cent said they believed their clients would consider some form of payment, with the majority of respondents suggesting that clients would be prepared to pay up to £1 per 1,000 emails, or more than £5 per 1,000 emails.
- JASON CROSS, marketing manager, Greater London Authority
"We are not a massive user of email marketing, but we use it tactically to promote cultural events, conferences and the publication of papers and consultation documents.
"Deliverability is an issue. It's important for us to have visibility of how much of our email is delivered or not. Goodmail could be interesting depending on how much it is looking to charge, but we would still want to track open rates and clickthrough rates.
"Given the cost and environmental impact of sending things out in the post, I don't mind paying a little to make sure the message gets to who we want to see it, but it all hinges on cost."
- TOM TWEDDELL, head of direct marketing and communications, Avis Europe
"Email deliverability is something we are keeping an eye on, but I wouldn't say we were losing any sleep over it. As for a service such as Goodmail, we do the bulk of our email through a specialist email marketing provider, and we do not have any big deliverability problems at the moment. We are emailing to people who have opted in to receive the emails and our service provider has good relationships with the ISPs, so we currently have no plans to change the way we do things."
NEED TO KNOW - THE FUTURE FOR EMAIL DELIVERY
With spam showing no sign of going away, what plans are being considered to ensure that legitimate marketing emails are not blocked by spam filters in the future?
Bluestreak's Dax Hamman favours a system of verification that would remind recipients that, at sometime, they have signed up to receive marketing emails from the company in question, and perhaps make them think twice before marking it as spam.
"It would involve some sort of password verification, where the email contained a familiar word or part of the consumer's postcode or postal address that they chose as part of the signing-up process," he says. "For it to work, the industry would need some sort of blanket verification, but I doubt it would happen, because Google would want their own, Microsoft would want their own and so on. But some sort of verification back to the consumer could make a difference."
In the meantime, Hamman says he is encouraged by initiatives such as Mailbox Monitor from Return Path, which tells the emailer what percentage of campaigns are going to the junk box versus what percentage to the inbox, and by 北京赛车pk10 Preview, also from Return Path, which enables the marketer to see what the campaign will look like in all the different email applications such as Outlook and Gmail.
"Marketers who adopt this type of technology are likely to boost their performance," says Hamman.
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