E-Mail Marketing Sends Direct Mail Packing

March 19, 2002

Want to turn spam into steak? Unsolicited e-mail ads are classed with spam, the scourge of the Internet, but permission-based e-mail marketing can ignite response rates eight times greater than that elicited by bulk e-mailings and direct-mail campaigns, GartnerG2 said today.

Businesses also are fast realizing that e-mail marketing is far less costly and more time-efficient than traditional direct-mail campaigns, so much so that by 2005, direct mail will account for less than half of what is placed in America's mailboxes compared to 65 percent last year, said GartnerG2 analyst Denise Garcia.

"As e-mail use, familiarity and trust increase, consumers will become more comfortable with accepting advertisements through their computer," Garcia said in a news release.

E-mail advertising revenue will rise to $1.26 billion this year, up from $948 million in 2001, and is expected to reach $1.5 billion in 2005, the research group said in its report, "E-Mail Savings Threaten a $196.8 Billion Direct Mail Market."

From start to finish, an e-mail ad campaign takes a week to 10 days, while a traditional direct mailing requires four to six weeks; response time for e-mail advertising is three days compared to direct mail's three to six weeks. And consider the vast cost difference: $5 to $7 will cover a thousand e-mailings, a mere pittance beside the $500 to $700 price tag for the same volume of direct mail, GartnerG2 said.

To capitalize on these advantages, advertisers must adopt permission-based and opt-in marketing strategies. Response rates from direct mail are the same as e-mail - about 1 percent - but the average click-through rate for permission-based e-mailings is between 6 percent and 8 percent, the report said.

Gartner suggests that advertisers develop permission-based e-mail lists from addresses gathered by opt-in functions and include opt-out mechanisms in each message.

Additionally, advertisers should address customers personally, provide avenues for customer feedback - and acknowledge what they say, Gartner said, adding that they should limit the number of e-mail messages to two per day for consumers and three per month for businesses audiences.