The Direct Marketing Association (DMA) has released its latest National Client Email Benchmarking Survey 2010 and there are two clear themes that come through in the report: the need for ROI and the development (or not) of social media integration.
Email still a fundamentally important channel
According to the report, 90% of respondents described email as strategically important to their business – slightly more than in 2009. On the other side of the fence, 86% said it was operationally important – again, up slightly on last year. This suggests that email is still seen as an extremely effective marketing channel.
Worryingly though, only half expect their email marketing budget to increase this year, a figure that represents a steady drop since 2007, when it was 83%. This is in part probably due to budget cuts, but it’s potentially a concerning trend, especially at a time when budgets should be increased to make use of tools and features that enable effective, targeted campaigns.
My clients that have invested more in this area have seen significantly higher results and have wisely bucked this trend. This budget tightening meant that less email was sent, with regular newsletter use, purchase confirmations and abandoned cart emails dropping by 6%, while limited time offers were down by 23%.
ROI must be a focus
Perhaps linked to this last point is a clear focus from marketers on deliverability and reputation. As Richard Gibson, chair of the DMA Email Marketing Council says: “This is striking because such issues are in the control of email marketers through best practice. Many email marketers and service providers still haven’t implemented the basic reputation and performance monitoring tools. Instead many foolishly rely on the formula: sent minus bounced equals delivered. Of most concern to email marketers should be the number of emails actually reaching and being read by customers. You can’t win if you’re not in the box.”
Despite this, there seems to be a growing awareness of the need to measure the revenue returns with email. While just under half currently measure operational success, nearly 79% would like to do so. The research showed that it’s generally seen as easier to measure ROI with consumer campaigns, with nearly 75% of B2C respondents currently able to calculate revenue generated from email marketing, while only 37% of B2B companies were.
Social on the rise
Three-quarters of clients questioned in the survey said they integrated social media with email, but the research indicates that much of this is fairly basic, with simple ’share this’ buttons, for example. The research also suggests little progress has been made when it comes to segmentation, with the percentage of those segmenting emails into more than six audiences rising by only one percentage point. However, B2C organisations have increased segmentation far more rapidly, with the percentage rising from 28% in 2009 to 36% in 2010.
As Dr Dave Chaffrey says, writing on the DMA Email blog, paying lip-service to social media and segmentation will not get good results in the end: “The opportunities of integrating email with social media make an even stronger case for a coherent contact strategy. Not simply an email contact strategy, but an integrated multichannel communications strategy incorporating email, social media participation and traditional channels. This report suggests many organisations still need to give this more attention.”
So overall, there is a lot here that is extremely positive in demonstrating how email remains a vital channel for marketers. But, there are warnings too. As I’ve said repeatedly, we need to focus on how we integrate new technologies like social media into email marketing strategies, but also that we need to take a more strategic view of email itself to ensure we are able to capture bigger budgets and demonstrate ROI.