Internet Marketing Growth

Forrester’s predicts growth in all areas of internet marketing with the most pronounced increases coming from Social and Mobile.  (Here’s the link)

Thoughts:

• More funds will be directed to online but keep in mind that over 80% will still be put towards “traditional”.  What these top line numbers don’t show is how “Traditional” will merge with “Interactive” over the next few years.
• Social Media is predicted to grow the most over the next few years.  It will be interesting to see how this evolves as Facebook and the others look to develop revenue models.
• Search is king.  Why?  Because Interactive marketing works best for direct response efforts and search marketing is the king of direct response.  As marketers we need to understand when to use which tool and don’t try to shoehorn objectives into unsuited tactics.

Some definitions you’ll need to know:

Open Rate: When you send an email to a list of addresses not all of recipients will open the email. The percent that do open the email is called the Open Rate. In my experience a 20% to 30% open rate for emails to a house list is considered good.

Unique Click Through from Opens: This is the number of unique recipients that opened your email and that click on a link in your email. I use this number rather than the Click Through Rate from sent emails because it tells you how engaging the email is to those that opened the email.

Types of email lists:
House List: This is a list of email addresses you collect.

3rd Party Lists: You may allow other marketers to send email messages to your list or as part of your regular email message. This is using a 3rd party list to send your emails.

Bought Lists: This is a list of email addresses you purchase from a list company. This is not necessarily spam as the email addresses sold have most likely opted in to receive some sort of marketing emails. However, these email addresses are often gathered through creative means.

Costs:
The most common way to purchase email lists is by a cost per thousand (CPM). Rates vary depending on the quality of the list — I’ve seen prices between $5 per thousand up to $100 per thousand. I’m sure you can get junk lists for less and very qualified lists for more. I’ve also seen email lists be sold on a CPA (cost per activation) basis where you only pay for sales or leads.

ROI on Email
Email is an extremely powerful marketing tool that can show a direct ROI for online sales or lead generation. Your house list is gold and can be nurtured to perform for you time and time again. And it can be a very valuable asset that you can use to barter for 3rd party lists. Bought lists can be lucrative if the list is of quality email addresses and the recipient was not duped into providing their address. Overall, ROI is a simple calculation of the cost to send the email over the sales or leads the email generated.

For email marketing that does not tie directly back to a sale the ROI is more difficult to measure. I suggest identifying what is important to your management and building out surveys that capture that data. For instance your management may identify purchase intent to be a meaningful measurement. If so, survey your house lists on a regular basis to determine how your email marketing is effecting purchase intent.

Thoughts on Email:

• Add value.  Provide information to your list that adds real value.  Go beyond the “buy this” mentality.
• Take care of your lists.  Measure, monitor, and figure out how to grow the list and reduce the churn.
• If you are selling directly you need to use robust behavioral data to tweak out every last sale.
• Be upfront and legit.  We all hate spam.
• Your emails are an extension of all of your other campaigns.  Think strategy at a high level to incorporate all of our online tactics including social networking, user generated content, contests, sampling, and even market research.