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Few channels are as immediate and as measurable as email. It's possible to track the recipient of an email all the way through to purchase, adding in some valuable information along the way on what that person did between opening the email and buying a product. Tracking can show marketers just where someone went on their website, what links they clicked on, the pages they visited, the products they looked at, what they put into their basket, and what, if anything, they purchased.

And through this, it's possible to work out cost per customer, per response and per sale - all valuable metrics and useful in building both a short- and long-term view of customers and their value.

Yet the recent DMA National Email Benchmarking Report, conducted by the DMA email marketing council and financial services forum Tank!, revealed that of the 27 email service providers (ESPs) surveyed, only half said more than 50 per cent of their clients tracked conversions.

The survey showed that the metrics firms consider the most important to track are unique clicks, delivered, bounce and open rates, with products purchased, basket value, and cost per customer, response and sale coming lower down. Yet these are the ones that are the most useful from a strategic point of view, so why aren't more firms tracking them?

There are several reasons. For one, the relative low cost of email compared with other channels, and the ease with which campaigns can be sent out means it can be tempting just to do it, without taking the long-term view.

"People can be frugal, and it's easy to look at the short term and have a quick dip of your toe into the water, but if you're not clear at the outset of what you want your campaign to do, how are you going to measure it?" asks Jane Byrne, product manager at Thomson Directories, which collects email data and runs predominately acquisition activity for its clients.

The fact that email is a fairly cheap and easy channel to use belies its actual capabilities, and complexities. "Email is so cheap to do that people tend to do it half cock," says Gavin Wheeler, joint managing director at agency WDMP. "They almost abuse it and don't think about it as carefully as they would if it were a print campaign."

But even with the best intentions, any email activity will fall down if the tools aren't in place to collect and analyse the results, and when marketers are at pains to prove that everything they do is bringing in the money, having the right email marketing solution makes all the difference.

"Return on investment is as important offline as it is online, and it comes down to finding the right email marketing services provider with the right technology infrastructure," says Denis Sheehan, chief executive of CheetahMail UK. "Any email marketing solution that claims to be market leading ought to provide campaign analysis to identify product purchase, cost per customer, sale and response and basket value."

Tracking techniques

When it comes to tracking, there are various ways of following what customers do after they open your email. Tagging pages is one way of following where people go on your site, and giving an email address a personalised identifier can also provide tracking ability. This is a method digital marketing firm Frontwire uses with clients including Scotts of Stow.

"Each email sent out has a personalised identifier in it, which is passed through the site until point of sale," says managing director Justin Anderson.

Every time the email recipients go to another page on the site, this identifier goes too, enabling accurate, detailed tracking.

For the longer term, sites with a log-in procedure are on to a winner.

With a log-in name and password that's linked back to that individual's details, it's possible to track all of their activity, not just that relating to one specific campaign.

Of course, an email doesn't necessarily drive people to an online purchase, and when it doesn't, this can make tracking conversions more difficult.

Sell a product online and it's relatively easy to track someone from the point of opening your email to purchasing that product. Sell something in a high street store and it's rather more difficult to work out what part of a campaign drove them to buy it.

There are ways around this, although they're not foolproof. With fashion retailer Oasis, for example, Frontwire has run campaigns that have included vouchers in emails that recipients can download and take into a store.

Certainly if a brand has an ecommerce arm or only sells online, such as Amazon or Play.com, it's more likely to be set up to measure all the metrics, and to be more interested in doing so.

Being able to do all this also depends on board-level buy-in. Internal pressures to prove that marketing activity is effective can be great, and in the short term, open and clickthrough rates can seem to prove just that because these initial responses can be high. However, the opening of an email doesn't necessarily translate into a sale further on down the line, and this is where people get trapped, says Debbie Cooke, sales development manager at Xpedite. "As soon as they see 80 per cent open and 30 per cent clickthrough, they get very excited, but they need to look further than that."

It's not only the pressure on marketing directors to perform that leads to a lack of proper tracking. Companies may have separate inhouse teams for email and web analysis, or separate firms, and if there's a lack of communication between them, the ends don't get tied up.

"Lots of companies have separate teams," agrees Garry Lee, head of client services at RedEye. "The email team will get the clickthrough rates but these don't tell you if there are cross or upsell opportunities, or what people look at on your site."

Not only can there be an issue with using separate parties to look after different parts of the marketing process, but where companies handle everything inhouse, there can be an integration issue, and this, believes Anderson, is as big a problem as any.

"It's more to do with services and integration as to why people aren't tracking, and having the right systems to be able to track from email to point of sale," he says. "People have been buying web services in a piecemeal way, looking to get the most cost-effective solution."

For many, venturing into new ground also requires a certain amount of hedging bets. To make email marketing viable, a certain critical mass of data is required, but without the right systems in place it can be difficult to get this. This leaves marketers in something of quandary: do they invest in the systems first and hope they get a quick ROI from them, or continue without them in the hopes of doing well enough not to alienate the people they're targeting before they can do it properly?

Direct marketing expertise

Companies heading into email marketing without a DM background can also fall into another trap. "There are too many people playing in the email space who don't understand direct marketing," says Donald Hamilton, managing director of digital media company AdLINK. "People often say 'just broadcast it', and focus on cost rather than customer understanding." His advice is this: "If you want to do direct marketing, go to a DM company or hire someone with DM expertise."

Anderson sees a very different mindset in those firms that have traditionally concentrated on ATL marketing. "Where you've got a traditional direct marketing organisation, they love to measure and have information at their fingertips. But if you're an organisation that's been traditionally spending ATL, your mindset is very different."

But there's a lot to gain from applying direct marketing principles to email. "By applying these basic principles, email comes into its own as a highly flexible, cost effective and timely medium," argues Andy Snuggs, managing partner at agency Geronimo.

What brands have to remember, he adds, is that email is a DM medium just like any other, and should be treated as such. "The core basics for any brand still apply - what type of relationship do consumers have and want with your brand and how is it best to communicate with them most cost effectively."

Brian O'Sullivan, sales director at email specialist EDR sums it up: "Email marketing should be tested properly and seen not just as a way of generating new sales, but as a way to obtain more information."

CASE STUDY: MERCEDES-BENZ

When Mercedes-Benz wanted to generate advance orders and a prospect pool for its new CLS-Class Coupe late last year, it turned to email and internet solutions firm Syzergy. Six months prior to the launch, the car maker had revealed the prototype at the Geneva Motor Show, adding several hundred opt-in addresses to its database through the event and via its website.

Syzergy launched a three-phase campaign designed to build an ongoing relationship with 5,000 prospects. To track the results of each phase, the emails incorporated a java script tag that enabled the server to record both the link that was clicked on to access the landing page of the campaign microsite and the identity of the email recipient.

This information was sent back to the database, which could then be cross-referenced to analyse the set of users who responded to specific elements of the creative, or who had clicked through to which elements of the landing page.

Syzygy also recorded open and clickthrough rates for each phase. Once email recipients arrive at the microsite or landing page, their movements and behaviour were tracked across the site through server logs. All data was recorded in the opt-in customer database, enabling demographic and behaviour segmentation from analysis.