"Out of everything that we do in b-to-b media, e-mail marketing is the single most reliable, predictable and measurable way to drive response," said Paul Calento, senior VP-strategic development at InfoWorld Media Group. "Given that level of predictability, it often can be the central component of a variety of programs."
E-newsletters are easy to launch and adjust as needed, said Jay Kirsch, director at AdMedia Partners. "People are realizing the power behind it very quickly, because you can test new products so much more easily than you can in print because there's almost no cost involved," he said. "The scalability of the model in that format is just tremendous."
Many publishers find that e-mail newsletters allow them to reach a much larger audience than print publications alone would, said Jeffrey Reinhardt, managing director at Berkery, Noyes & Co. "In some cases, media companies are finding the print reader is, say, a senior executive and the e-newsletter reader is midmanagement, or vice versa," he said. "The advertisers can target accordingly, the content can be produced accordingly and the net effect is the franchise influences a greater number of people."
Jeff DeBalko, chief Internet officer at Reed Business Information and president of the Reed Television Group, said e-mail newsletters continue to account for a significant portion of online revenue, almost as much as online display advertising. E-newsletters are the second-biggest driver of traffic to the company's Web sites, after search marketing, he said, but more important, they drive the highest-quality traffic in terms of repeat visits and page views per visit.
Site visitors who arrive by clicking on a search engine ad typically find what they want and leave, he said. E-newsletter readers, however, are much more loyal.
"Someone coming from newsletters is generally far more targeted and self- selected," he said. "They're much closer to our user-subscriber profile, and they're going to stay longer. They're also probably more familiar with the brand given that they signed up for the newsletter, compared with someone coming from search or from another site."
E-newsletters also allow publishers to deliver more targeted information to readers—and by extension, a more targeted audience to advertisers. Prism Business Media, which earlier this year acquired Penton Media and now goes by the Penton name, learned early on that having one general-industry e-newsletter for magazines wasn't nearly as effective as having that in addition to multiple vertical newsletters, said Prescott Shibles, VP-new media.
"We develop far more interest from the advertiser side by going even [more focused] than our [print] titles," he said.
Stephen Wellman, editorial director at BTG Email Newsletters at CMP, said advertisers must be aware that the performance of ads in e-newsletters can vary. "Marketers who are just looking to get a set number of clicks out of an e-newsletter campaign aren't using the medium as effectively as they could be," he said.
Newsletters are very effective for action-oriented ads that induce readers, for instance, to download something, such as a white paper, or to attend an event, Wellman said. "Straight-up brand advertising in newsletters tends to not perform as well," he said.
Coordinating e-mail efforts
With a medium that is relatively easy and inexpensive to use, there is the risk of bombarding subscribers with too much e-mail.
"It's a big issue," Reinhardt said. "You have to holistically manage all efforts that are going against your e-mail file, not just your newsletter, because, remember: You're renting [subscribers' names] in the rental market, and you're probably cross-marketing to them for your other magazines and trade shows; so it's an issue of list fatigue."
Though mailing as often as possible can allow publishers to monetize their lists, they must remember that it's more costly to acquire a new customer than to retain an old one, he said. "You can mail the hell out of somebody and in the short term make a lot of money, but you pay the price down the road, and that price is usually more expensive," he said.
E-mail oversaturation and deliverability issues tend to be a sleeper problem, said Geoff Smith, managing director of integrated marketing at Penton. "It doesn't happen overnight," he said," and it's not something you can fix overnight."
Plus, he said, putting a strategy in place in order to limit the number of e-mails a subscriber receives is easier said than done. "The practical reality is that revenue pressures—and particularly a lack of understanding caused by a lack of education and even tools—to determine how many times a particular e-mail address is being mailed to are tough," he said.
Smith said many e-mail service providers can help publishers determine how often an e-mail address was mailed to in a given time period and, in many cases, limit the number of times a particular address receives e-mail.
But publishers must also institute business practices to limit the number of times subscribers are e-mailed. Penton has a centralized e-mail services team that is responsible for best-practice education as well as establishing benchmarks of various e-mail metrics, Smith said.
As part of this benchmarking, Penton has started scoring its database, putting e-mail subscribers into six buckets according to how active they are. For instance, one bucket would be the best readers—those who have opened or clicked on at least 35% of the e-newsletters they received within the previous 90 days. At the other extreme are inactive readers who have never opened or clicked on any e-mail message from the publisher.
Shibles said it's important to monitor basic metrics such as open and click-through rates because they reveal trends over time. "Little fluctuations month to month don't seem like a lot, but when you look and you've had a half a percent decline for seven consecutive months, all of a sudden that can translate into a fair amount of the list," he said. "If you're monitoring on an ongoing basis, you'll be in a much better position to understand and react before it's gone too far."
Open rates decreasing
Open rates seem to be trending down across the industry, though that trend may have something to do with the fact that many e-mail browsers no longer display images.
"In most e-mail service delivery platforms, if you deploy a text e-mail, you can't record an open rate," Wellman said. "You can only record an open off of an HTML or an `HTML light.' And because so many e-mail platforms right now are blocking images, you can't record opens as easily as you used to be able to do [with those]."
This development isn't too problematic, Wellman said, noting that his group's open rates haven't dropped, and click-throughs have increased.
"It presents challenges in terms of how you manage the growth of the lists and growth of the products; and it presents challenges in how you report that to your clients," he said. "But we know that clicks are going up pretty significantly, which tells us we're doing the right things in terms of managing our lists and managing our products."
Tying e-mail analytics to Web analytics can also reveal interesting trends, though b-to-b publishers appear to be only in the early stages of doing this. Wellman said his group has started to integrate its e-mail delivery system and its Web analytics tool. "It definitely impacts strategy, and it also allows you to see which products are creating an impact on your overall Web traffic," he said.
Wellman said one e-newsletter was "on the verge of the cutting-room floor" when his team began to integrate the Web and e-mail data. Doing so revealed that the newsletter was driving more traffic than the initial click-through reports indicated. "It revealed for me that newsletters that get a lot of click-throughs tend to produce a lot of traffic, but sometimes newsletters that don't produce as many clicks as you think they should can still be producing a lot of traffic for you."
Penton came to a similar conclusion when it began to tie e-mail clicks into Web analytics to gather information such as the total number of page views generated by a newsletter and the paths readers take once they're on the Web site. "We found that individual clicks and click-throughs don't necessarily tell you the whole picture," Shibles said. "There are some newsletters that have less click-throughs but more overall page views consumed because those people are more engaged in the subject matter and click around on the site more."
Finding employees that have the skills necessary to analyze e-newsletters and act on the data can be difficult. At Reed Business Interactive, Reed's centralized Internet group, a product development team works with the company's various brands to standardize and optimize newsletters across the portfolio, DeBalko said.
"As with anything online, skill sets are in very high demand and very hard to find," he said. "It's unlikely you're going to go out and find a number of people that are going to have the exact profile for the job you want them to do. You're going to find people that have specific skill sets, and then you try to blend it to make it work with whatever your objectives are."