Advertisers who once spent their Internet marketing dollars on Web site banner ads now have become wise to the merits of e-mail marketing.
Instead of spending $1,000 per customer on the Web, they've found they can attract and retain customers via e-mail for hundreds of dollars less.
Last year, U.S. businesses spent 5% of their online marketing budgets on e-mail, according to Forrester Research, Cambridge, Mass. Forrester predicts the volume of marketing e-mails will reach 200 billion by 2004 as many companies triple their e-mail direct marketing budgets.
But all this raises one question: Why would companies accustomed to building brand identity for graphically rich media like television and the Web gravitate toward a medium with the visual richness of the first personal computer?
Because e-mails can be a fast, effective way to reach clients. And, by using HTML e-mails, marketers are beginning to use the strategy without sacrificing brand value. Whether in text or HTML, e-mail marketing must be properly integrated with other marketing strategies.
"E-mail has to be seen as just one component of the brand strategy," says Robert Wilke, CEO of Internet marketing agency Circle.com, Baltimore.
This is especially true if marketers are targeting clients or prospects who receive a lot of direct e-mail, such as purchasing agents, Wilke says.
Whether they are with large corporations or small businesses, these buyers now find themselves swamped by the scattershot electronic junk mail known as spam. The more e-mail prospects get, the less likely they are to open yours.
"People are getting burned out on e-mail promotions," says Laurie Windham, CEO of Cognitiative.com, a firm that develops marketing strategies for technology companies that sell over the Internet. "An appealing e-mail offer is great, but the first challenge is to get recipients to open it, and you've got only two chances--the [e-mail's] subject line and the `from' line."
Strictly e-mail-based marketing campaigns seek to broadcast offers to recipients so they will go to the company's Web site or pass the offers to others, creating a viral marketing effect. But in focus groups, Windham found that just two out of 10 participants open promotional e-mails from unrecognized sources.
Windham says this shows that e-mail is seldom successful as a way of attracting new customers. Used wisely, however, it can be effective as a retention tool, to hold on to existing customers. To market successfully, Windham says, e-mails should be carefully targeted, and include something of value to the recipient.
Wilke says marketers are often best off starting with traditional direct mail to drive recipients to a Web site where they can then "opt in" to receive e-mail newsletters, sales alerts and other information. Although expensive, direct mail is a way to gauge recipients' interest--and create brand awareness--before sending e-mail to their already crammed inboxes.
The mailings Circle creates for clients typically contain the marketer's Web address. When typed into a Web browser, the URL serves up a Web page that is "prepopulated" with information the advertiser has already gleaned about the visitor.
Once opened, the Web site tracks the visitor's footsteps and uses the information to send carefully targeted opt-in e-mails with offers that reflect the visitor's needs. This may seem like just another invasion of Internet privacy, but Wilke insists that Circle's e-mail process defines the difference between spam and consensual e-mail.
Wilke's company and others are already moving into the next frontier: e-mail written in HTML, which allows the message to look and feel just like a Web page and lets companies maintain a consistent brand image.
Cognitiative's Windham says "one-upmanship" will compel many marketers to use e-mail that contains streaming multimedia and other rich graphics. But while she doesn't discount the value of viral marketing, she says a good offer, not special effects, is what's always at the heart of brand success.
Iconocast.com, a San Francisco company that distributes news and data on Internet marketing, recently sent a streaming multimedia e-mail featuring a talking, smoke-breathing King Kong. The response to the splashy multimedia message suggested that viral e-mail marketing really does have potential as a branding tool.
Iconocast used the e-mail to publicize itself and its upcoming marketing conference, and promised prizes for those who forwarded the e-mail most. At press time, one recipient had forwarded it more than 2,600 times.