DMA Forum: DMA View on ... E-mail potential could suffer

Direct Response 01-Feb-05, 10:06

E-mail marketing has perhaps the greatest potential, yet faces the greatest challenges, of any marketing channel at the current time. At least 50 per cent of the UK is now contactable through the internet, according to Jupiter Research. Making contact via e-mail is fast, costs significantly less than traditional direct channels, and can be tested and refined at the click of a button.

That's the good news. The bad news is spam. For legitimate e-mailers, the growing tide of spam has a damaging effect on the key objectives of deliverability, impact in the inbox and response. Julian Smith, an analyst at Jupiter Research, describes the success of e-mail as a "double-edged sword", but is in no doubt about its potential for those companies that can distance themselves from the practice of rogue traders.

The onus is on professionalism and best practice and it's with this objective in mind that this year sees the launch of the first e-mail benchmarking survey. Produced in conjunction with the DMA Email Marketing Council and Tank! Benchmarking, the National Email Marketing Benchmarking Survey represents the first independent and robust measure of UK e-mail practice.

Respondents completing the survey represent more than 75 per cent of the outsourced e-mails delivered via Email Service providers (ESPs). Quantitative and qualitative data was collected for the second quarter of 2004 and respondents were asked to answer about 50 questions. As well as covering areas such as e-mail volume and response rates, the online questionnaire also sought to benchmark issues such as measuring ROI, deliverability and working with ISPs.

The third and fourth quarter data is currently being collected and this, says Richard Gibson, chairman of the Email Marketing Council's Benchmarking Hub, will enable the Council to monitor changes in the industry. "Trend analysis will give us a real insight, not just into e-mail volume, but some of the wider issues such as tracking opt-outs and measurement techniques."

So how is the outsourced e-mail industry fairing? In terms of volume the majority of respondents send out less than one million e-mails a month. The most common frequency for acquisition activity is weekly, whereas retention campaigns are more likely to be sent out on a monthly basis. Both of these results are good news in terms of distinguishing the activity of ESPs from the high-frequency, high-volume practice of spammers.

Other good news is that e-mail is proving itself a valuable communication tool in the B2B world with just under 60 per cent of respondents conducting campaigns for both B2B and B2C clients.

Perhaps not surprisingly the largest industry sectors served by ESPs are travel and leisure (26 per cent) and retail (15 per cent). Both these sectors have made major inroads into online buying which is the logical precursor to e-mail contact. Sectors which have yet to really exploit the potential of e-mail include charities (four per cent), B2C financial services (four per cent) and FMCG (four per cent).

Most e-mail specialists are focused on retention activities on behalf of their clients, with the majority of ESPs (76 per cent) sending more retention e-mails than acquisition e-mails. This will be music to the ears of all those in the industry who believe that too much time is spent chasing new customers rather than nurturing existing customers.

ESPs work to combat spam

But the challenge of combating spam was all too obvious in the section of the questionnaire covering deliverability. The growth of spam has resulted in increased use of spam filters by both ISPs and end users. These filters often block legitimate e-mail messages along with the junk, making it impossible to know how many e-mails actually make it into in-boxes.

The fact that 70 per cent of ESPs have established direct contact with ISPs to facilitate delivery and that up to 80 per cent believe a proportion of their opt-in e-mails have been blocked in error in the past six months, underlines just how serious the issue has become.

Closer collaboration with ISPs is vital and in this respect, says Gibson, the benchmarking survey has an important role to play. "It will aid the wider goals of the Email Marketing Council when talking to ISPs on the deliverability debate and helping legitimate e-mail marketers get their messages through."

The full survey is available to DMA members on the website (www.dma.org.uk).

The Executive Summary is available free of charge for non-members and the full report costs £195.

E-MAIL BENCHMARKING SURVEY: KEY FINDINGS

The most popular type of e-mails sent are newletters (37%), closely followed by product promotions (36%). Acquisition e-mails make up the next largest group (15%)

- The average unique open rate for B2C acquisition e-mails is 29%. This figure rises to 32% for B2C retention e-mails.

- Only half of ESPs report that more than 50% of their clients track conversions - indicating that class DM principles need to be applied more stringently to new media.

- 81% of respondents track opt-out rates.

- 37% report that in the past six months deliverability has got worse. 48% say that it has remained the same.

- The five most important tracking criteria are unique clicks, delivered, bounce rates, open rates and ROI.

- On average respondents report that 4% of e-mails get soft-bounced, 6% get hard-bounced and 5% are ISP-filtered.

- Just over one-fifth of respondents report that practically none of the clients track conversions.