E-Mail Marketing - E-mail Marketing Vs. Traditional Direct Mail

Marketers have found that e-mail marketing is cheaper and more effective than traditional direct mail. A 1999 study by Jupiter Research (now Jupiter Media Metrix) estimated the cost per piece of e-mail to be $.25, compared to $2 per piece sent by regular U.S. mail. eMarketer estimated that in 2003 some $2.2 billion would be spent on e-mail marketing, compared to $40 billion on traditional direct mail. Jupiter Media Metrix estimated that companies would spend $1.3 billion in 2001 to send 43 billion commercial e-mail messages.

A 2001 study by Opt-In News found that direct e-mail was considered the most responsive marketing method worldwide by some 50 percent of media buyers, and e-zines or e-mail newsletters were ranked the most responsive by 23 percent. Only 11 percent of media buyers surveyed said that direct mail was the most responsive marketing method, while eight percent voted for TV and radio.

E-mail is more targeted, custom, and flexible than traditional direct mail—and it comes at a fraction of the cost. This is largely due to the use of marketing databases. During an e-mail campaign, available technology can capture and track individual responses, provide marketers with the information to learn more about customers from response and purchase behavior, and refine and update customer profiles for future communications. These types of services typically are available from messaging solution providers. The flexibility of e-mail marketing makes it possible to change an offer the next day if a special discount doesn't bring in enough traffic right away.

Marketers conducting e-mail marketing campaigns have access to packaged e-mail marketing software and outsourced e-mail marketing services. A company can use its own customer database to deliver personalized messages based on one or more database attributes and specific e-mailings can be targeted to customer groups based on past purchase and response behavior.

Opt-in e-mail campaigns, in which recipients have asked to receive information, are conducted to achieve different objectives. They can be used to prospect for new customers outside of a company's established customer base. The low cost of e-mail makes it possible to test market new products and services more quickly and inexpensively. E-mail marketing campaigns also are used to drive traffic to a company's Web site.

For existing customers, e-mail marketing can help to build relationships through more frequent contact. E-mails can be used to alert customers to new products or services, special promotions, or discounts. They also can be customized according to online and offline purchase patterns. Such messages help to build customer loyalty. Additionally, as surveys e-mails can be used to get feedback from customers. Such surveys typically include an incentive to get customers to participate.

Opt-in e-mail lists are available from list brokers and managers as well as from some online ad agencies. Online ad agency DoubleClick became the biggest e-mail marketing message distributor in early 2001 with the acquisition of Toronto-based FloNet-works. The acquisition enabled DoubleClick to expand its distribution capability from 150 million e-mails per month to more than 600 million. As of mid-2001 DoubleClick had 32 million e-mail names under exclusive management and brokered an additional 55 million names. Chicago-based Yesmail.com is a fast-growing company that specializes in e-mail marketing solutions. As of mid-2001 it had more than 25 million e-mail subscribers and was acquiring new names at the rate of more than 500,000 per month.