E-Mail Newsletters vs. Solo E-Mails

February 8, 2001

The seismic shift in online marketing from a Web-centric to an e-mail-centric model has many marketers scratching their heads. So it is not surprising that there is confusion between the two primary e-mail marketing vehicles: e-mail newsletters and solo e-mails. Their differences are profound — similar to those between an advertisement in The New Yorker and a direct mail piece, which may both be delivered by the same mail carrier but have varying formats as well as response rates.

E-mail newsletters. E-mail newsletter advertising involves the placement of a 50-word ad — generally text — within the content of a publication delivered via e-mail. Newsletters range in topics from jokes and recipes to investment advice and industry updates, and may be published daily, weekly or biweekly. Most e-mail newsletters with larger circulations (more than 100,000) are text-based, brief and written in a breezy style.

Just as people read The New Yorker for its articles, newsletter subscribers have opted in to receive specific content. As a result, response rates to newsletter ads are generally 0.5 percent to 2 percent, far lower than response rates for solo e-mails. However, newsletter cost-per-thousand rates are also much less, generally $10 to $18 per thousand vs. $150 to $300 per thousand for solo e-mails. The lower CPMs for newsletters often translate into a better return on investment.

The following are things to consider with e-mails newsletters:

Great content means readership. Not all newsletters are the same, and readership varies. This much is certain: readership levels drive response, and high readership correlates to great content. When subscribers look forward to reading a newsletter, the e-mail gets opened, even when their e-mail inboxes are full.
List hygiene. I once tested a newsletter with a circulation of 500,000 from a reputable publisher. I had high hopes, but the results were awful. Upon review, I found that the newsletter had a complicated “unsubscribe function” and no method for dealing with undeliverables. I guessed that most of the list was inactive. So make sure the newsletter has an easy unsubscribe function and software that automatically removes undeliverables. If a newsletter publisher does not offer these functions, it is best to find another publication.
Your offer matters. Assuming you are running in a publication that gets read, the next most important factor is the creative. Offer testing can improve response by up to 400 percent. Consider initially testing multiple creatives rather than multiple newsletters. You need a successful offer before you can accurately test different publications.
Text vs. HTML. Art directors like HTML. Readers prefer text. Do you want pretty graphics or results?
Using newsletter networks vs. buying directly. Consider this analogy. Do you like buying stocks directly or through mutual funds? A reputable network will do a lot of the research and screening for quality newsletters. Also, by aggregating, networks tend to improve response, produce more predictable results and offer scalability.

Buying directly appeals to individuals who like control. If you go the direct route, consider these points: (1) For newsletters with circulations less than 100,000, run several tests. Results can vary by day, so you need to find an average. It is not unusual to get zero responses one day and 100 the next. (2) Recognize that people are multidimensional. Humor lists often are great for reaching information technology professionals. (3) Subscribe to a few newsletters that you want to run in and observe them over a few weeks. Do they publish regularly? Is the content consistent? (4) Lastly, talk with fellow marketers who have used them.

Solo e-mails. Solo e-mails involve sending promotional messages to individuals who have agreed to receive them. At a subscription point, an individual may opt in to receive additional promotional offers.

In addition to opting in, some of these individuals provide additional personal data. A good rule of thumb is that only about 20 percent of the participants complete the detailed surveys. As a result, those who do sign up and provide this data tend to be very responsive. However, these individuals tend to sign up for everything, so duplication across various lists and vendors can be up to 80 percent.

The dark side: A new term has crept into the e-mail lexicon — “registered spam.” Many individuals believe that they agreed to receive promotional messages on, for example, only diving, and not refrigerators. This complaint is generally voiced from the crowd that failed to opt out. Many also just forget that they have signed up.

Most vendors offer a myriad of tracking abilities. However, some count the opening of a solo e-mail as a click. Response rates of up to 40 percent for some lists may actually be based on open rates. Ask your vendor upfront whether the percentages he is touting are open rates or click-through rates.

While responsive solo e-mail lists tend to be small (fewer than 500,000), the overall quality is quite good. While CPMs of $150 to $300 are pricey compared with newsletters — and even banners — the proof is in the response.

Here are some things to consider with solo e-mails:

Truly opt-in? Better yet, are they double opt-in? The latter requires individuals to respond to an e-mail confirmation.
The taint of spam. Can subscribers easily opt out? People forget they signed up, so you want to use lists that make it easy for folks to get out — which helps you avoid accusations that you are a spammer.
Recent use of the list. If you are a photo site and the list was mailed a different photo offer last week, wait a month before mailing to it.
Watch for spikes. Are the mailings sent over several hours, or do they drop all at once? If you drop 100,000 e-mails at one time, make sure your site can handle a spike of as many as 200 responses in five minutes.
Stale names. Some claim that the older the names, the less responsive they become. The rationale is that someone who opted in in January may have received hundreds of solicitations by November and become numb.
Frequency matters. A hot list can probably only be mailed two or three times a year. This varies by offer, but eventually you will “cream” a list and response will decline.
HTML vs. text. No question, text has broader readership. But many claim dramatic improvement in results by using HTML. There are no rules here yet — you have to test.
Which is better: solo or newsletter? It depends on what you are trying to accomplish. It’s like going fishing. Solo is analogous to using a rod and reel. Newsletters are like using a net. Both have their functions. Both can be successful. So it is foolish not to test both. And both reach users where they spend most of their time online — their e-mail inboxes.
Roy Weiss is executive vice president of sales and marketing at PennMedia, Mokena, IL, an e-mail newsletter ad network. Reach him at roy@pennmedia.com.
Roy Weiss, PennMedia

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