Study: E-Mail Marketing to Grow to $3.5B by 2005

December 17, 2001

Mergers and acquisitions among e-mail marketers and the development of customer relationship management services will spur 41 percent annual growth in the e-mail marketing industry to $3.5 billion by 2005, up from $910 million in 2001, according to a study by Winterberry Group.

The study noted that this growth is being driven by direct marketers' increasing acceptance of e-mail as a viable marketing channel. Permission-based commercial e-mail accounts for about 10 percent of the 300 billion messages sent today. By 2005, it is expected to account for about 25 percent of 600 billion messages.

"E-mail marketing has become an ever-important communications tool for most marketers and has led to the establishment of more than 200 marketing service companies or business units to provide e-mail marketing solutions," said Michael Petsky, CEO of Winterberry Group, New York. "In just a couple of short years, these service providers have developed a broad scope of e-mail marketing techniques for customer acquisition, online database marketing and CRM."

According to John Prunier, president of Petsky Prunier LLC, an investment bank specializing in the marketing services industry and an affiliate of Winterberry Group, mergers and acquisitions among e-mail marketers should continue for the next 18 months.

"Consolidation among e-mail industry leaders is being fueled both by the need for sales efficiencies among industry leaders [DoubleClick's acquisition of FloNetwork and MessageMedia] and expansion of technology platforms to provide full-service solutions [acquisitions by Bigfoot Interactive and MindArrow]," Prunier said.