E-mail marketing done right

July 12, 2001

(Publish) — The use of banner ads began slowly and successfully enough. But when Web mania caught fire and the use of banner ads exploded, surfers suddenly couldn't make it two clicks without running across some form of the new ads, causing more and more people to simply ignore them.

The deluge of banner ads ultimately drove a stake through the heart of once-healthy click-through rates, sending the online advertising market into a serious bout of winter doldrums at the start of this year.

And, if marketers aren't careful, experts say the same thing could happen as e-mail marketing gets more and more popular.

A report issued last year (but still widely cited) by Forrester Research predicts marketers will send more than 200 billion e-mails annually in the U.S. by 2004, compared to around 45 billion being sent today. But the report also warns that such an inundation runs the risk of diluting the medium's potency in much the same way banner ads fell victim to their own success over the past year, especially if the e-mailed content loses relevance and value for its recipients.

However, when done right, e-mail marketing can pack a powerful punch, combining elements of low-cost, efficiency, immediacy and customer relationship management. While every e-mail marketing campaign has different goals and objectives, there are some common ingredients that should go into any good e-mail marketing effort.

"The biggest element is picking your list," says Lowell Wintrup, president of Tone Digital, a Toronto-based online advertising agency. "A successful campaign has nothing to do with creative or content."

And Wintrup's first piece of advice when paying for rented list names: Don't believe anything the seller tells you. "I say that tounge-in-cheek, but if they're asking for $250 for a thousand names, you better make sure it's a qualified list." The cost of list rental, he says, should be based solely on the quality of the list.

If you've got a good list, you'll hit click-through rates that are well above the norm, he says. "We're completely anti-spam. We don't use a shotgun approach. Companies need to do more analytics on their own customers," he says.

For rented lists, Forrester puts the average click-through rate at 3.5% and at 10% for names gathered in-house, but Wintrup says his clients regularly attain click-through rates of 30% or better.

Once you've got a list you think is correctly segmented, Wintrup says you've got to tie your goals to some tangible, measurable business result beyond mere click-throughs, whether that's sales or e-mail opt-ins.

"It's got to be something that has real business value," he says. "Your click-through rate will increase if you use the word 'free' or 'contest,' but your business results won't."

Rachel Sherwin, vice president of account management at Click Action, a full-service e-mail marketing firm whose customers include BusinessWeek, AGFA and Hershey'sGifts.com, thinks there are three key elements that go into any good campaign.

The first, Sherwin says, is personalization. "You've got to really look at a list and segment it by demographic. You've got to make people feel like they're getting the information they're interested in," she says. Sherwin's second element, customization, while similar to personalization, speaks to the need for marketers to nimbly target their messages or their sales offers to the right audience. The third element, she says, is relevance. "A lot of companies send the same information over and over again. But you've got to bring people into the brand, giving them a reason to open an e-mail."

In terms of some less philosophical, though no less-important, practical suggestions about creating an effective e-mail marketing campaign, Kim MacPherson, president and founder of Bethesda, Md.-based Inbox Interactive, an agency specializing in e-mail marketing, says after working with "millions" of e-mails in her career, she believes wholeheartedly in sending HTML-based messages instead of plain-text. "I'd say 90% of the time, HTML pulls better than text. But, there are some specific audiences that respond to plain text."

A May report issued by eMarketer indicates that users who prefer HTML- over text-based e-mail tend to be younger and newer to the Web, having only started using the medium within the past six months.

"HTML is graphically better, it's easier to read," says MacPherson, author of Permission-Based Email Marketing That Works! and a regular columnist for ClickZ.com. "With HTML, you can enhance words and create visuals that really make important points stand out."

Sherwin agrees, saying that over the past 12 to18 months, HTML e-mail has really caught on, not only among marketers, but with users as well.

"We see very few people asking our clients to stop sending HTML e-mail," she says, estimating that click-through rates are generally three to five times higher for HTML e-mail. "HTML has gotten to the point where more people understand it. It also looks prettier, it looks nicer."

With the rise of HTML e-mail, which enables marketers to "push" their Web sites to willing recipients rather than "pull" them to their site with a plain-text link, has come an increase in the use of rich media elements embedded in HTML mailings.

For example, New Line Cinema recently sent an e-mail promoting the film Thirteen Days that greeted recipients with a streaming video version of the movie's trailer, viewable right from the user's inbox.

Sherwin, who worked on the Thirteen Days campaign, says she thinks e-mail campaigns that use rich media will become much more prevalent in the near-term. "I definitely think you'll continue to see an increase in the use of rich media in e-mail, especially as people become more savvy with computers and with the Web."

As for Tone Digital's Wintrup, he's wary about what sort of an impact rich media can have in an e-mail campaign, saying that sometimes creative elements can obscure the actual message you're trying to send.

"Rich media may be better with branding," Wintrup says, attempting to sound diplomatic. "A little bit of streaming media might be okay, but when you get into Flash execution, well...I don't know."