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Making Email Marketing Count

November 30, 2000

While email marketing has taken off in the US, the trading of email audiences - sponsored inventory in publishers' newsletters and brokers' email lists - for marketing purposes is still in its infancy in Europe.

The main obstacles exist on the supply side. Many of the large offline list providers have delay ed their entrance due to unclear regulations on how to collect addresses for commercial use. Also, few new list brokers have built up enough volume of permission-based inventory to attract marketers. Most publi sh ers have overlooked email as a revenue stream; 94% of Scandinavian publishers sell banners on their sites, yet only 39% have newsletters in their inventory.

Jupiter believes the demand for permission-based lists will boom in the next 18 months. A major driver will be the use of email as a retention tool. Today, the in-house lists of European companies are virtually non-existent. As a result, acquisition-oriented email methods will become an important means to drive consumers to opt in at companies' Web sites. A group of new list brokers from ad and reward network businesses, such as Hi-Media and MyPoints, have recently entered the business to fulfill marketers' rising demand.

However, list owners will find it difficult to fill their databases with opt-in user profiles: the Jupi ter/Ipsos Online User Survey (August 2000) showed that only 10% of users are interested in registering personal data for affinity points, and 16% for recei ving personalised commercial offers. Supply of email addresses will therefore be limited, resulting in continuously high prices.

As more users are interested in subscribing to content rather than commercial messages, the supply of sponsored email inventory in newsletters won't be a bottle neck. A Jupiter Executive Survey (June 2000) showed that 70% of top European publishers plan to offer sponsored email inventory by the end of this year. A small number of companies are already selling extensive lists, such as Hi-Media and 24/7 Media, which have recently reached 900,000 and 2.1m newsletter subscribers (aggregated) in France and the UK respectively.

To maintain high price levels, list owners must keep the inventory fresh and provide email buyers with a high-performance medium. Their dilemma is that a user tends to become less active the longer a subscription lasts, and it's expensive to constantly fill the strainer with new users. List owners must increase the average time a user stays active by controlling the frequency of messages, by personalising offers and by creating compelling content. They must also remove in active profiles early rather than keeping them. Volume shouldn't be valued more than quality.

New Media Age


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