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Email Marketing Provides BEST Marketing ROI?

E-mailTwo separate articles today point to the same conclusion – that email marketing provides the best opportunity to evaluate marketing ROI.  Is this coincidence or is the Direct Marketing Association conspiring to convince marketers of this? Hmmm. Let’s take a closer look.In Marketing Budgets are Up – and Email Marketing is the Number one Area of Spend a study from Econsultancy, commissioned by Clash-Media, reports that:

53% of marketing budgets for US companies have increased in the past year, in the face of slow economic conditions. This extra budget is being used to fund high-return Online Lead Generation campaigns, with Email Marketing the top area of spend, with 75% of organizations using it.”

Furthermore, they share a few open-ended responses, one of which is:

“Better comparability between online and offline Cost per Lead has enabled us to shift budgets from off- to online.”

In Email – the most accountable marketing going? the author claims that out of all the marketing channels available, PPC and email are the best to evaluate ROI.  Their reasoning is that other channels only show you the good – when someone takes an action to buy – but with PPC and email you can see who clicked but did or did not buy.  Furthermore, they say with email you can re-target those who did not open, who opened but did not buy, etc., which the author claims gives it an edge over PPC.

Here is the problem I have with these articles’ claims – both were authored by companies who stand to profit from their statements.   This is an important point.

The first article, a press release, includes research from two companies who specialize in and profit from eMarketing.  What is their relationship?  A search reveals that Econsultancy pays Clash-Media nearly $2,500 a year for a Platinum Level listing in their online vendor directory.  Furthermore, they are the ONLY marketing consultant/supplier with expertise in email marketing who is at that paid level.  Does this mean that Econsultancy might be able to be strong-armed by Clash-Media into publishing the parts of the study that best supports their position?  It’s not unheard of for a client to try that sort of tactic, but it’s not something that the company I work with, C.A. Walker, would ever allow.  We certainly welcome companies to commission studies that could be used for press, but facts are facts.  If study results do not support the client’s desired outcome, they know going into the study that this could happen and we will not change or tweak results to suit their intended purpose.

I’m not saying that the research in the first article isn’t accurate, however, the relationship of the two companies raises a red flag.  The other issue I have with this particular study is their statement that “Email Marketing the top area of spend, with 75% of organizations using it.”  The implication is that the most amount of money is being spent on email marketing, which is not what 75% using it means.  75% of the people in my office may be wearing sneakers right now with shoelaces in them, but that doesn’t mean that shoelaces are a top area of spend for any of us.

Lastly, regarding this study, I found online the results from their same study from last year, 2008, which states that “over 50% of marketers’ budgets now spent online.”  That would mean that online marketing is now equal to the size of ALL the money spent combined for broadcast and cable TV, outdoor advertising, direct marketing, magazines and newspaper, specialty advertising, events, and sports sponsorships.  Logically, it doesn’t make sense.  Once again, it seems they used a figure where 50% of the companies checked off that they are participating in online marketing, and they extrapolated that to mean that 50% of their budget is spend online.  Unless the survey asked respondents to share their BUDGET SIZE with them and how that was broken out, which is highly unlikely that marketers would share, this claim does not hold up.

The second article was written by Pure360 who sells email and mobile marketing solutions.  I thought it in poor taste for the author to say that TV advertising is his “pet peeve” because of its lack of accountability.  Television advertising is still one of the most successful marketing channels that there is.  More people *still* watch TV than are online.  The fact that it is difficult to evaluate ROI in no way diminishes the power of television advertising.  Granted, with the increase in use of DVRs the effectiveness of TV ads drops, but advertisers simply have to get more creative to overcome the desire to flip past a commercial.  The problem is not DVRs – the problem has been, still is, and probably will continue to be – bad and overly repetitious TV advertising.

The author really needs to have a larger view of engagement metrics across all channels before he could possibly ever argue that email is the best.  That’s actually why I put this blog together, because it takes a serious study of these matters,  over a great deal of time, to be able to draw any conclusions about which is best and what metrics to use for what channel.  What I plan to focus on next is exactly this – how do we best measure engagement across different channels?  What is the latest thinking from the top thinkers (including the researchers who I work with) in these areas?

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