Ads inside e-mail

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Direct e-mail campaigns represent new and exciting territory, but b-to-b marketers are getting comfortable using them. Less certain, however, are the benefits of using e-mail newsletters as an advertising vehicle.

In a direct e-mail campaign, many of the names on the list of recipients come from a marketer’s internal customer list. But by placing an ad in an e-mail newsletter, marketers often are relying on a third-party list that may or may not be as up-to-date or as demographically sound as the publisher claims.

Moreover, the brand message gets mixed in with editorial content. And in newsletter ads, text is often the only way to present a message.

B-to-b marketers allocated about 25% of their online marketing budgets to advertising in e-mail newsletters in 2000, according to Forrester Research Inc., Cambridge, Mass. That number will rise to 32% of all online marketing expenditures by 2005, Forrester said.

Kent Allen, research director for the Aberdeen Group Inc., Palo Alto, Calif., said e-mail newsletters were among the first forms of b-to-b Internet marketing, going back further than 1996 in some cases. But direct e-mail and customer-focused marketing applications are now becoming more powerful than advertising in newsletters, he said.

He said the future belongs to interactive and wireless advertising, and relationships that exchange value between two parties, through an offer, entertainment or promotion. "We’ve seen a lot of dollars wasted on broad newsletters that really don’t add a lot,’’ Allen said.

Benefits and drawbacks

Yet marketing in e-mail newsletters can be a powerful piece of the interactive budget because it is immediate, said Scott Altman, director-marketing for MindArrow Systems Inc., Aliso Viejo, Calif.

For more than a year, he pitched his company’s rich-media marketing services with ads in e-mail newsletters. The result? MindArrow has enjoyed a 4% to 10% response rate, depending on the publication. Tests are always conducted with a sample group of 500 before a general text- or HTML-based advertisement goes out to the newsletter’s general population, Altman said.

"One of the benefits of e-mail marketing is you are able to test and modify quickly,’’ Altman said.

Patrick Grogan, marketing manager for NetLedger Inc., San Mateo, Calif., said the prestige of an e-mail newsletter brand is worth the expenditure. He’s advertised NetLedger’s b-to-b application services in the e-mail products of Forbes Small Business, and His costs have been in the $30 per thousand range.

"We’re seeking immediate brand association with the partner,’’ Grogan said.

A knock on e-mail newsletters has been accountability, but that’s about to change, said Dick Bennett, senior VP-auditing at ABC Interactive, Schaumburg, Ill.

ABC Interactive is working with five b-to-b clients to monitor wide-scale e-mail newsletter campaigns. ABC is expected to offer by Sept. 30 a service that, for about 1% of the total cost of a campaign, verifies the mechanical process of e-mail delivery as well as demographic information promoted by the publishers, he said.

"Advertisers are promised a certain number of e-mails when they buy these campaigns, but there’s always some doubt as to whether the complete transaction occurred,’’ Bennett said. "We’re trying to help create some standard measurements.’’

Cost-conscious marketing

Cost is always an issue when planning a campaign, said Deb Pappas, chief marketing officer with Inceptor Inc., a Maynard, Mass.-based online marketing company. She places ads in e-mail newsletters to seek such responses as attendance at Internet seminars. And she claims a conversion rate averaging 23%.

Rates have been as low as 2 cents per reader up to 38 cents per reader, and sometimes the lower-priced newsletters outperform the higher-priced ones, Pappas said.

Laura Tanner, VP-marketing for communications, Seagull Software Systems Inc., Atlanta, said shelf life is always an issue with e-mail newsletter advertising.

"Print advertising does have the ability to have shelf life, whereas daily, twice weekly or weekly newsletters get read and discarded,’’ Tanner said. Yet Tanner can get an average 10% to 15% response rate to an e-mail marketing campaign placed in front of the right target audience.

Credibility a must

The credibility of the publisher is vital, marketers said. Advertising in newsletters from established publishing companies puts a b-to-b brand in good stead; moreover, it is less likely to cause sticky situations.

Take the case of Philippa Gamse, an e-strategy consultant with He recently embarked on an e-mail newsletter sponsorship with an undisclosed Internet magazine. Almost immediately, Gamse’s Internet service provider received a spam complaint. CyberSpeaker was in violation of its usage agreement with the ISP and had to convince it that the newsletter publisher was to blame.

"Any contracts that I sign in the future will stipulate that the publication is opt-in, and we accept no responsibility for spam complaints that we can have no control over,’’ Gamse said.

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