At a time when the mailing and telephone preference services have been picking up new registrations at record rates, the ongoing surge in email volumes would seem to pitch this digital channel as either the latest below-the-line success story or the next direct marketing bogeyman, depending on your point of view.
Marketers using email are proceeding with care as online becomes a bigger part of the direct marketing mix and are seeking to avoid some of the pitfalls those using direct mail and telemarketing have seen. While the permission basis of email marketing provides some built-in protection from potential abuses and there are signs the industry is trying to keep a grip on how this now-established channel is used, things could still go wrong.
Digital media is the fastest-growing area in UK direct marketing. Having shown an 80 per cent rise in 2005 to £1.5bn in spend in the UK, it is expected to reach £2bn by the end of this year. According to the National Email Benchmarking Survey from the Direct Marketing Association's (DMA's) Email Marketing Council, the first quarter of 2006 showed a 30 per cent year-on-year increase in email volumes and a quarter-on-quarter increase of 13 per cent.
It is not just volumes which are rising, however, but also consumer interest and standards of targeting. Email acquisition click-through rates have risen from six per cent to eight per cent, according to the same report, which suggests email will soon draw level with direct mail in terms of volume.
The DMA's Participation In Media 2005 report, released in March, brought more heartening news for the email marketing lobby. According to diary analysis, positive response rates to email stand at 38 per cent - greater than those for direct mail, newspaper, TV or radio advertising. Emails were also regarded as the second most convenient form of communication after direct mail.
If email marketing can avoid the kind of public scorn reserved for certain other direct marketing disciplines, credit will be due - at least in part - to the efforts of the DMA. From an early stage, its Email Marketing Council has delivered regular benchmarking studies and best-practice documents to ensure that its members not only stay well within the law, but that they demonstrate effective self-regulation besides.
"It has moved on quite a bit from the early days when there wasn't any regulation or any kind of guidance on what the legal scope was," says Lucy Stafford, media director at Tri-Direct. "A lot of the more sophisticated marketers that have been in the email space for a while have realised the benefits of following that guidance and having proper list-hygiene processes in place."
These days, email operates as a genuine direct marketing discipline. "The same principles hold for email as for telemarketing," says Acxiom Digital client services director Matt Simons. "It is all about segmentation, targeting and relevance."
But email does have certain characteristics that differentiate it from other DM channels. "The key difference is that, with the exception of B2B, email is an opt-in medium," says Richard Gibson, RSA Direct commercial director and chairman of the Email Marketing Council's Benchmarking Hub. "The consumer is in control of their own destiny in terms of what they receive."
So it appears that email does not share the same potential for outrage as telemarketing and direct mail, partly because it is an opt-in medium, and because unwanted emails are easily deleted.
"People don't have to wade through the paper on their doormat. They can delete things fairly easily," says Simon Jeffs, head of data at tmnmedia, one of the UK's largest email list brokers, which owns and/or manages more than eight million names.
The key to this industry moving forward, Jeffs believes, lies in maintaining the integrity of its data pool. "It is not difficult to gain and keep consumer confidence," he says. "You have just got to make sure that you take the right steps from the outset, and thereafter it is very straightforward."
The right steps relate to a reasonable interpretation of the EC's Privacy and Electronic Communications directive, which potentially leaves room for sharp practice. "You need to gain the individual's consent, but there is a whole can of worms about what consent really means," says Jeffs. "A tick in a box is the most unambiguous way, but it is not the law, and some people in the marketplace have lower-level interpretations of the guidelines."
Mindful of such concerns, the DMA is updating its 2004 best-practice guidelines. "The industry is evolving at a rapid pace and while, say, three years ago, many companies were talking about email marketing, now everyone is using it," says Rupert Harrison, chair of the Email Marketing Council's Best Practice and Legislation Hub and News Group Newspapers data planner at News International.
"From a cold-data-buying point of view, costs have come down from £300 per 1,000 to well under £100," he says. "The focus should be on getting the right message to the right person at the right time."
Clearly, email marketing is about more than simply staying on the right side of DMA law; it needs to justify itself in traditional marketing terms. While the signs are good, there is still work to be done.
"Everyone is able to send an email newsletter," says Gibson. "The challenge is to make it relevant, get the timing right, get the recipient engaged and get them to do something. The more segmentation, the more targeting, the more variables you use, the more choice you give the recipient, the higher your response is going to be."
Email may well demonstrate different characteristics to other forms of outbound direct marketing in the way it is received, but the no-nos of email marketing are familiar ones. Sending out untargeted, unpersonalised messages en masse tends to be counter-productive. A failure to manage and maintain the database is just as bad, and there is simply no excuse for not testing as you go along.
"We ensure that we are learning from any campaign we do," says Pippa Unsworth, planning and insight director at interactive agency Syzygy. "We test something in each campaign, whether it is different subject lines or different creative."
Learning to interpret the medium is also important. "One company I spoke to said its last email campaign had not worked so it wasn't going to had decided not to do another one," says Michelle Hocking, head of marketing and partnerships at CheetahMail, an Experian company. "It transpires that it didn't even know if the email had been received, let alone opened."
In fact, the kind of reporting that company failed to do is perhaps email's greatest strength, giving brands the opportunity to test their creative, tweak their message and clean their database in real time. Email could virtually have been conceived as a direct marketer's dream, and with a degree of care across the industry, it stands a good chance of fulfilling that potential.
TXT2EMAIL
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WHITELISTS & CERTIFIED EMAIL
Goodmail's CertifiedEmail programme caused a moderate stir when it was announced in February, with Yahoo! and AOL as partners.
For one thing, it proposed to add a new cost to email delivery - senders pay a fee to plant a unique token within each email, which sees them past the Internet Service Providers (ISP) gatekeepers and feeds back a receipt guaranteeing the message has arrived (the user's own personal filters permitting). For another, it rather had the appearance of a bribe slipped to the ISP by the sender.
Guaranteed delivery is seen by some as an unambiguously positive thing. Around 15 per cent of respondents told the National Email Benchmarking Report that more than five per cent of their acquisition emails were blocked in error in Q1 of 2006, and 18 per cent believed their clients would consequently pay more than £5 per 1,000 emails to bypass such roadblocks.
There are certainly clients for whom such a strategy could well pay dividends. "Goodmail for Yahoo! is sometimes necessary for serious high volume clients," says Darren Fell, founding director, sales and marketing, at Pure 360.
But there are others who believe that paying to get past filtering technology, or circumventing it by other means, could represent something of a false friend.
"Just because you can, doesn't mean you should," says Pippa Unsworth, planning and insight director at Syzygy. "It comes back to two things: being relevant and having consumers' trust. Getting your emails around spam filters by any means necessary doesn't help the trust issue."
The standard whitelists operated by ISPs might appear capricious, but they do broadly respond to good practice. AOL's enhanced whitelist (EWL) monitors email coming from companies on the general whitelist. "AOL monitors complaint rates by IP on a rolling basis to determine inclusion on the EWL," says Michelle Hocking, head of marketing and partnerships at CheetahMail.
"Senders can come on and off AOL's EWL without notice. The only other way a sender can ensure images are viewed and links are clickable by default is to have subscribers add your "from" address to their AOL address books."
THE SPAM PROBLEM
As CheetahMail's head of marketing and partnerships Michelle Hocking points out, getting past a spam filter is "a bit of a guessing game". Internet service providers (ISPs) are careful not to reveal the specifics behind their filtering processes - and rightly so, given that for every genuine marketing message, there is a flood of undesirable material of unknown origin.
Accordingly, marketers need to have access to dedicated resources if they are to give their email marketing campaigns the best chance of success.
"The first given is to use a content-evaluation tool," says Hocking. "That will give you an idea of how likely your email content is to be blocked by spam filters, and it will spell out words and phrases which are likely culprits, so you can go back and change the copy."
Marketers should track their delivery rates and try to find out what makes a message undeliverable. "One simple method is to set up email accounts through the various ISPs and send test messages to yourself," adds Hocking.
"If a message is not received or goes into the junk folder, you know it needs to be altered. This will also show you what your mailing looks like when received by customers in each email client."
Email specialist Pure 360 uses risk-analyis monitoring to pause a send automatically if the tolerances on opt-out, hard bounce and blocks begin to approach an excessive level. "That keeps us whiter-than-white," says Darren Fell, Pure's founding director, sales and marketing.
The final lines of defence are, of course, the customers themselves, who have all the tools to blacklist you even if their ISP doesn't. Large companies are frequently impersonated for phishing purposes, which means the first challenge is to prove you really are you.
"This is where deep understanding and access to customer data comes in to play," says Alterian divisional president Jason McNamara.
"Use the data you have to let the customer know it really is from you. Use past purchase information, personal information like hobbies, special interests and household data to make it clear to your customer that they are communicating with you. Obviously, the less you know about your customers, the more likely you are to have your email go unread."
GET PERMISSION
Rules for permission-based email (and mobile/SMS) marketing:
For B2C marketing
- Where the list is for a company's own use, a soft opt-in is sufficient - meaning the details were collected in the course of a sale or negotiations for a sale, but only as long as the marketing message relates to similar products and services. All messages must carry an "unsubscribe" mechanism.
- Where the list is being offered to third parties, all named individuals must have opted in.
For B2B marketing
- Where the list is for a company's own use, opt-out is sufficient, but sole traders and partnerships must be treated as consumers.
- Where the list is being offered to third parties, opt-out is sufficient but, once again, sole traders and partnerships must be treated as consumers.
OTHER TIPS
- Use the tone of voice of the brand to encourage sign-up
- Cover all future uses/channels to market
- Be clear about who is collecting the information
- Give individuals a reason to hand over information
- Don't use pre-ticked boxes
- Present a click-through to the privacy policy on the data-collection
screen
- Data collected via "viral" promotions may only be used once to gain
future permission
- Charities cannot use "soft opt-ins"
- Rosemary Smith, director, Opt-4
CASE STUDY: MAZDA SAKATA
Mazda has had its email strategy in place for almost 18 months and now processes anything between four and 10 campaigns a month. "That can range from a highly targeted campaign right up to a newsletter to 200,000 people," says Pippa Unsworth, planning and insight director at Syzygy, which handles Mazda's email activity - as well as other brands such as Citroen and London 2012.
In March, Mazda launched its sporty Mazda 2, Mazda 3 and Mazda 6 special editions, known as the Mazda Sakata range, with an integrated campaign to encourage prospects to request brochures, arrange test drives, visit dealerships and, ultimately, buy a car.
Email was chosen as a pillar of the campaign as it was a cost-effective way of reaching the target market. All opted-in prospects had interacted with Mazda at least once and came from Mazda's pan-European customer relationship management (CRM) database. Data from the email campaign was fed back into the system to add to the view Mazda has of each prospect.
The "run" theme of the offline creative was extended to the email, which used a visual style usually associated with trainers and trainer websites. In the event, 39 per cent of recipients opened the email, with 46 per cent going on to click through to the dedicated microsite. Though Mazda won't disclose precise figures, the cost per site visitor from online activity was 25 times less than for those recruited to the site by press and 100 times less than for TV.
"The campaign encapsulates best practice in not only email marketing but CRM," says Unsworth. "It shows that direct marketing expertise applied to email is the only way to achieve outstanding results."