Study: Email marketing revenue hits record growth
- Email marketing’s contribution to company revenues grew to a record of more than 20% in the past year from 18% in 2016, according to a study by researcher The Relevancy Group and OneSpot, a content personalization and intelligence platform. The survey of marketing executives sought to learn more about the effectiveness of email personalization by industry.
- Marketers using “deep personalization” can drive as much as 17% more revenue from email programs than without it, the study found. Personalizing emails drives 6% higher customer conversion rates and 5% greater order value. Average open rates for email marketers increased to 27% this year from 25% in 2016, while click-through rates rose to 16% from 14%.
- About two-thirds of marketers reported that dynamic emails, which have hypertext links that pull in changeable content based on the user, was the most effective messaging technique in email campaigns. Sixty percent of respondents said real-time data in this context was “effective” or “highly effective.”
While social media, messaging apps and search engines gobble up a growing share of advertising dollars, email marketing is still an effective way to interact with customers (except in China, where e-mail is shunned, according to Quartz). The return on investment for email has been the strongest among marketing channels for more than 10 years, according to a 2014 study by VentureBeat. Its research found $1 spent on email marketing generates $38 in ROI, putting it far ahead of paid search, display, social, radio and TV.
However, social media companies like Facebook and search giant Google are massive collectors of data on their users, enabling them to organize mass audiences into niche target groups. Email marketers need to adopt those data-driven technologies to tailor messaging and strategy to fit targeted groups' unique behaviors and preferences to make their campaigns more effective. The biggest difficulty marketers have in doing this is adopting advanced technologies to personalize emails for a target audience, according to OneSpot’s study. Forty-four percent of marketers cited the "lack of internal buy-in" as the biggest impediment to implementing stronger personalization.
More than half of those surveyed aren’t making personalized product recommendations in their email messages, nor are they using a recommendation engine to serve personalized content to newsletter subscribers, the study found, which is a major area of opportunity ahead. The most common way to personalize an email is by using the first name of a user in messages, which 78% of respondents said they had already begun to take that step. Cosmetic retailer Sephora, for example, demonstrates that solely using a consumer's first name in an email isn't enough. The beauty giant taps vast amounts of user data to track purchases and push a notification or discount, among other tactics, months later when a customer is likely running low on the product to drive return engagement and sales.
That being said, one in four marketers said personalization isn’t a priority in their marketing budgets. While personalization can be a massive undertaking for companies that manage lists of millions of email contacts, the ROI may be well worth it if it means likely boosting user engagement.