40 years on, email marketing is still going strong
In 1978, a Digital Equipment Corporation (DEC) employee named Gary Thuerk sent a promotional email for the company’s machines to 400 users over Arpanet, and $13 million in DEC machine sales followed.
Thereafter, the Internet and free personal email services began working its way systematically around the world and marketers were given a cost-effective way of reaching consumers directly.
The rise of email marketing
As expected, over-enthusiasm on the part of marketers soon flooded inboxes with what we know today as spam. Regulation was introduced around permissions and opt-out options, while service providers began filtering for spam. Spam filters and the ‘Move to Junk’ button eventually helped marketers learn the importance of relevance, timeliness and automation.
Before marketers could react, mobile and social media exploded into mainstream. All of a sudden, mobile optimisation, omnichannel engagement and data became topics of conversation. These strategies have made their way into email and today, hyper-personalisation enabled by automation tools and analytics data results in highly targeted email marketing campaigns – that much we know.
Countless instant messaging and social media applications as well as collaboration tools and software are easily available online today. Is email still relevant today?
Just last week, cloud communications platform Twilio acquired email API SendGrid for a whopping USD $2 billion, reaffirming confidence in what is a key but often overlooked communication tool around the world. With 3.8 billion users and growing, email is the most ubiquitous form of communication around the world.
Still going strong
40 years on, email marketing is still the trustiest tool in any marketers’ toolbox. With an ROI of up to $38 for every dollar spent on email marketing, it is little wonder why most companies still consider it essential to driving traffic and conversions for their business. By now, we should have gotten rather sophisticated with email marketing, given the advanced, new technologies being integrated as add-ons and lessons from the recent past.
Although an open rate of 20% is much better than the majority of the digital marketing industry, it also translates to 80% of emails remaining unopened. These are emails sent to users who have chosen to receive updates and are interested in what the company has to offer – unless it is material irrelevant to them.
Even with granular details such as the optimal time for sending emails and greater tools for developing aesthetic and dynamic content available, the industry still grapples with falling engagement rates. It is probably time to reassess what the problem really is. Since email marketing began, marketers have treated user attention as a largely free resource. Marketers seemed to have taken consent be kept updated as cue to drown their subscribers in irrelevance.
Pegging a value to user attention
Among all of the proposed ways to improve user engagement, not one has addressed putting a value to user attention. Marketers assume that the utility derived from engaging with promotional content is all there is to it for subscribers. What if misaligned incentives are the reason behind consistently declining engagement rates?
To move beyond where it is today, marketers and subscribers must establish a bi-directional value transfer that incentivises desirable behaviour. The concept behind it is straightforward: Redistribute the value within email marketing towards subscribers, incentivizing them to engage with emails and compelling marketers to send high-quality and relevant content.
Suddenly, email campaigns start incurring costs. It is thus in the marketer’s interest to provide a better-quality email that is more engaging and relevant, coupled with the same incentive structure, to form a two-pronged approach to boosting engagement rates.
As economies continue to grow and our standards of living increase, the value we place on our time increases and we perceive ourselves to be busier. As a by-product of this, we tend to ignore things that have little value to us (like an irrelevant marketing email),
Through incentivisation, marketers can increase the value proposition of their promotional emails by first valuing their audience’s time. As more subscribers get value back for their time, they will start identifying and engaging with the emails that deliver them the most value.
While the concept might seem new, visible improvements in engagement metrics will motivate marketers to rethink the value of their emails and start incentivising their customers. It may take an innovative company (or three) to get there but, if we have learned anything from social media and the dot-com boom, it is that the speed at which society normalises new concepts is only getting faster.