eMarketer’s David Hallerman surveys the state of email marketing and ways that smart marketers are building and maintaining their lists.

No matter whether the sender is a legitimate marketer sending permission-based email, a spammer, a friend or family member, or some other source, email volume continues to grow at a steady pace. Email volume in the U.S. will rise from over 2 trillion messages this year -- personal, commercial and spam -- to nearly 2.7 trillion by 2007.

The growth rate for email volume is still strong, at 14.3 percent this year over last, but the rate will decline gradually through the rest of the decade.

This reduction in growth is due to three main factors: one, a somewhat lessened usage by those who’ve become disenchanted with email; two, some success in the war against spam (although the CAN-SPAM Act has not appeared to do much; technology works better than laws); and three, alternative means of electronic communications -- such as instant messaging and mobile text messaging -- will continue to steal email’s former thunder.

But email is not going away; when the annual figures are in the trillions, a double-digit growth rate is still formidable.

An individual’s email volume depends somewhat on the type of account, according to Quris. On average, those at work receive 134 emails daily (most of which is spam), while AOL users are at the other extreme, with only 56 emails daily on average.

Permission-based email makes up a larger share of AOL users’ inboxes than it does for those who have web-based accounts (such as Hotmail or Yahoo! Mail).

Overall, the increase in email volume works against marketing efforts. According to Return Path, 60.1 percent of U.S. consumers simply deleted additional emails in order to cope with the increase of messages during 2004’s holiday season.

Despite the broad increase in email volume -- or perhaps because of it -- 40 percent of users spent a lot more or somewhat more time with email in 2004 vs. 2003, according to Quris, while only 11 percent spent any less time. More time overall, however, may mean less time for any single company’s email.

For legitimate marketers, the growth in email volume may be best dealt with by better-targeted emails, by giving the recipient a choice in email frequency, and by delivering messages that truly persuade the individual to open and read it.  And at the heart of targeting is a good list.

In interviews conducted by MarketingSherpa at an Ad:Tech conference late last year, 45 percent of attendees said email using an in-house list was the best performer -- and email using a rented list the worst.

Therefore, it’s not surprising that 90 percent of U.S. companies use house lists for the majority of their email marketing campaigns, vs. 10 percent using third-party or rented lists, according to MarketingProfs.com.  Similarly, 88 percent of U.S. internet retailers use no addresses from third-party lists, according to an Internet Retailer survey.

How big should your list be?  As life continually teaches us, bigger is not always better. That’s certainly true for email lists. A larger list allows marketers to reach more consumers, but the deadwood of inaccurate addresses and disinterested customers costs money.

When it comes to email lists, therefore, quality tends to trump quantity. As EmailLabs puts it in the company’s “E-mail Marketing Best Practices” white paper, a “list of active, interested and motivated subscribers/customers is really the end game on which you should focus.”

Among U.S. internet retailers, the typical in-house email list is less than 50,000 addresses, according to 54.3 percent of the respondents in the recent Internet Retailer survey. The greater the company’s online sales volume, the larger the list.

 
Size is not the only issue: cleanliness is critical.  Marketers use various techniques to keep their lists clean. Deleting persistent bounces is the list-cleaning method employed by 76 percent of U.S. companies surveyed by MarketingProfs.com.

But smart marketers don’t just spiff up lists after the fact -- they start with cleaner lists. Among the respondents, 26 percent use multiple opt-in procedures when signing up recipients, which helps prevent false or misspelled addresses. In addition, to further create a list of willing recipients, 20 percent notify them and ask for reconfirmation.

Smart marketers also clean their valuable in-house lists frequently -- nearly three-quarters clean their lists at least once a month.

This article is drawn from “E-Mail Marketing: How to Improve ROI,” a new eMarketer report. Mr. Hallerman is a Senior Analyst for eMarketer.