Strong Spend Ahead for E-Mail Marketing

JANUARY 8, 2008

But the tactic's humble rep could be hurting it.

E-mail marketing spending will grow to $2.1 billion in 2012 from $1.2 billion in 2007, according to JupiterResearch's "US E-mail Marketing Forecast, 2007 to 2012" report. “E-mail service providers have done a solid job of standardizing feedback loops with Internet service providers and are continuing to make needed improvements in e-mail delivery,” said David Daniels, vice president and research director at JupiterResearch.

“This will create better opportunities for e-mail marketing, although marketers will have to work harder to remain relevant in their communications with their intended audiences,” Mr. Daniels said.

JupiterResearch also said that spending on retention e-mail would more than double through 2012 and account for more than half of total e-mail marketing spending by then.

Acquisition e-mail marketing was pegged to grow more slowly, with sponsorships such as ad-supported newsletters accounting for most spending.

In its own calculations of e-mail marketing spending, eMarketer includes payments to e-mail service providers, list rental and the costs of in-house e-mail. eMarketer projects that e-mail marketing spending will creep up steadily, reaching $1.65 billion by 2011.

"E-mail marketing is effective, but spending is tempered by the somewhat but not entirely valid impression among many companies that e-mail is inexpensive marketing and that they therefore need not throw too much money at those programs," said David Hallerman, senior analyst at eMarketer.

Spending on e-mail marketing is also moderated by its own efficiency. Because e-mail is a low-cost medium, even relatively large increases in the number of commercial e-mails are not reflected in large spending increases.

Spending will jump by 5.1% in 2008, supported by marketing for both the national and local elections. Similarly, but to a lesser extent, marketing spending growth in 2010 will be boosted by election activity.

"US e-mail marketing spending in 2007 will reach nearly $1.5 billion," Mr. Hallerman said. "That is about $3.60 for e-mail marketing for every $1 that goes to e-mail advertising.