Despite Performance Facts, Email Still Undervalued

I spent the second week of February in Palm Desert at the eTail conference and participated in a panel discussion focused on advanced segmentation strategies. Unlike in previous years, the team at eTail set up channel-specific tracks that preceded the usual conference—email and search each had their own rooms, and sizeable crowds looking to learn more from experts in the space.

The search room was especially well attended, with nearly double the number of conference goers as the email room. Now I have done some SEM work in my day, and have the utmost respect for search professionals and the business value they provide. But, as the recent Datran 2008 Marketing & Media Survey illustrates, email often delivers stronger ROI than search. In fact, 55.3% of the survey respondents expected email to outperform all other channels on the basis of return on investment in 2008. Additionally, when asked “which advertising media buys perform strongly for your company,” 80% identified email as a strong performer, compared to 70% for paid search. For this reason, 82.4% of respondents said they will increase their use of email marketing in 2008.

Again, don’t get me wrong here—I am a big search advocate (especially when it’s well integrated with email and other channels), but why were so many more people at eTail interested in search than email?

The reason, I believe, is that most organizations are still missing the boat on resource allocation and shortchanging email. Though email is often more effective at delivering near-term ROI, search still gets a bigger share of budget. Many of the advanced segmentation strategies we discussed at eTail require relatively significant investments of time and resources, and while they deliver excellent returns, it seems as if many of the people I spoke with were facing major resource constraints that prevented them from taking their programs to the next level.

It is our responsibility as email professionals (and evangelists) to ensure that our organizations realize the tremendous value a sophisticated email program can deliver. We need to craft email marketing performance dashboards that are designed for executive consumption—they must be clear, succinct and engaging. We need to keep our managers up to date on developments in the space and the opportunities they present to our businesses. Share the results of the Datran 2008 survey with your senior management. Leverage stats from in your quest for more budget. And do not take “no” for an answer.

All that is easily said. But I am still feeling a little like Rodney Dangerfield. Will the facts alone earn email the respect (and budget) it so richly deserves? What do you think? What can we in the email world do to get the resources required to drive more sophisticated and profitable programs? I’d love to hear your thoughts.

—Nicholas Einstein of Datran Media

3 thoughts on “Despite Performance Facts, Email Still Undervalued

  1. Nice post, Nickster. I’ve written about the resource issue in a few articles in MarketingProfs and elsewhere – I refer to it as the "ROI/Resource Imbalance." As you point out – email continues to have a tremendous ROI – but often is not allocated the appropriate resources.

    I think one of the contributing factors is that email is not adequately accounted for on either the cost or revenue side in most companies…but ask a CEO of a small-to-midsized company how much he/she is spending on Google AdWords every month – I guarantee you they know.

  2. Yep indeed. As well as the resource issue, I think paid search just comes across as easier to do. One might argue that good PPC search campaigns need just as much intelligent application as a good email campaign. But certainly at a basic level, email seems more "frightening" to the innocent marketer.

  3. No doubt this is a major problem felt by email marketers for all the reasons you, Nick, and my fellow comment posters make. I especially agree with Loren. In-house list email is far cheaper than the CPMs/CPCs being charged for other, more easily understood online marketing mediums. This serves to devalue email in the minds of the Marketing budget owners that don’t know any better, i.e., MOST Marketing budget owners. Don’t fret folks in 10 years all of this hand wringing will be over and email under-estimation will seem like an artifact.

    Interesting article on pricing:

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