The vice president of marketing of this email marketing service provider gives a rundown of current trends and the state of the industry.

Loren McDonald is VP of marketing for EmailLabs, an email marketing solutions company named a top 10 email marketing service provider by Jupiter Research in 2003. McDonald is responsible for all customer touch points, including messaging and positioning, lead generation, advertising, PR and customer communications. He was previously founder and president of Intevation, an emarketing services firm specializing in email and search engine marketing. We talked with McDonald recently to get his views on the state of the email Industry.

iMedia: What trends are happening in email marketing?

McDonald: Well I wrote an article a few months ago on the 11 Email Marketing Trends for 2005, but here are a few of note:

Web analytics integration -- One of the hottest trends, companies increasingly are looking for ways to integrate website data and purchase behavior into their email campaigns.

API integration/task automation -- Companies increasingly are saving time and adding increased personalization to emails by automating otherwise manual processes using an API (application programming interface) or scripts. For example, it might be as simple as automatically grabbing content off your website and populating an email. Or personalizing emails with content based on subscriber zip codes -- emails are dynamically built by calling a database that matches specific images or content to predefined zip codes.

More advanced segmentation -- Many marketers are beginning to discover how many ways (meaningful) they can segment and personalize their emails.

Allocating more email marketing resources -- Companies seem to be going in two directions, but all up for email marketing. They are either hiring experienced email marketers on to their staffs to manage email marketing campaigns, or they are outsourcing all or part of their program to agencies or email service providers.

Enterprise use of email marketing -- Many companies are starting to get marketing involved in their other forms of email communications and are leveraging better design, messaging and technology. Whether transactional emails, customer support, notifications or employee communications, companies are realizing the value of leveraging reporting on whether emails were opened or not, which links were clicked on, et cetera, and then having the ability to act on those actions/non actions automatically. There is also a realization that emails are a major part of a company’s brand and when done poorly -- whether due to bad content or design, or too many emails in a short period of time -- they can greatly hurt the company’s brand.

Delivery haves and have nots -- Marketers will quit complaining about emails being filtered or blocked and either step up to the plate and take the necessary steps to ensure near 100 percent delivery, or they’ll stick to their ways and accept less than stellar delivery rates.

iMedia: Forrester Analyst James Nail recently said: "As it's practiced, email marketing is reaching a plateau." Do you agree or disagree with this statement? What would you say is the state of the email industry?

McDonald: Well email marketing is alive and well. But Jim’s comments were really nothing new -- he was basically saying what we at EmailLabs and many other firms have been saying for a few years now -- the days of “load and send” are over. Basically the game has changed -- email marketing is very different from most other forms of marketing. Consumers and email recipients feel very proprietary about their inboxes and those marketers that don’t understand that and don’t respect this fact will lose.

Consumers and business recipients of email still love email. It is the preferred form of communication for most customers. What has changed is their inbox and how they relate to it. Recipients are basically in control of their inboxes -- and they expect marketers to know exactly how they prefer to be communicated to: offers, type of content, frequency, et cetera -- and if you don’t deliver on their expectations they’ll ignore you, unsubscribe or report you as spam. So to respond to Jim Nail’s comments -- I would say we agree. Marketers that don’t take their email marketing programs up a notch in terms of personalization, segmentation and relevance will see diminishing ROI.

As far as the state of the industry -- it is really in multiple states. Companies for whom email is core to their business and revenue tend to be investing more resources and are becoming more sophisticated in using technology, segmentation, integrating with web analytics, getting superior delivery rates and so on. For many companies for which email is simply a means to distribute a monthly newsletter, making the process as easy as possible is key -- and things such as advanced segmentation and using triggers, for example, are probably several years out. And for a lot of smaller companies or businesses with a traditional direct marketing mindset, the transition to the protocol and best practices required for success in email marketing can be quite frustrating. For many of these companies they will try to hold on to the load-and-send method and then complain that email marketing doesn’t deliver like it used to.

Within the industry we are also seeing a proliferation of mergers, acquisitions, partnerships, technology integrations and new players emerging. All of this activity is happening because the market is still growing strongly and marketers and recipients alike find email marketing a valuable and effective communications and ecommerce channel.

iMedia: How are marketers integrating email with the rest of their marketing strategies? i.e. what role is email playing? Is this role changing/evolving?

McDonald: It really depends on what their business is.

For B2B marketers, email marketing (in the form of newsletters, announcements) has become the key channel of automated and customized communications to move people down the buying cycle. So for example B2B companies use search to acquire leads, but then use email to develop and foster those leads over time into hotter prospects and ultimately customers. They use email for invites and follow ups to trade shows and events, and much more.

For publishers, like iMedia Connection, it is becoming a solid revenue source and a key way to drive visitors to the website (advertising); and it is also opening up new channels of revenue such as webinars (easily promoted through the email channel). For example, my relationship with iMedia Connection is primarily email-based. Your daily newsletter is a means of telling me what new content is on your site, what is important. If it resonates then I click through to your site to read the article(s), see the advertising and probably search and stumble around the site finding additional content of interest. Without email, I rarely get the chance to visit your site. With email, I’m typically there five days a week.

For etailers, email is becoming a growing source of revenues. Email helps build brand and customer loyalty, and enables etailers to conduct amazingly targeted campaigns based on email and purchase behaviors.

For consumer product companies, email has become a great way to enhance brand loyalty, launch new products and drive customers to stores to purchase. Email has also emerged as a great tool for conducting surveys and research, promoting sweepstakes and coupons.

But overall, email and the email database is increasingly becoming the backbone of how companies communicate with and enhance relationships and brand with customers, prospects and partners.

Tomorrow: innovative uses of email, mistakes marketers make, and more.

Dawn Anfuso is editor of iMedia Connection.