The Silverpop CEO reviews the year in email marketing and tells us what to look for in 2006 in email, RSS and podcasting.
Surely it's not just me. The year seemed to fly by, with many things changing and even more staying the same old, same old. And both the changes and the lack of them will surely influence where we go from here.
In 2005, the power of the consumer was felt in very real and vigorous ways. Consumers began taking greater control of who could talk to them and what they could say. And marketers tried valiantly to both abide by the rules consumers were setting up and, at the same time, go about the business of selling in much the same way they have for decades.
Don't expect consumers' intolerance for irrelevant interruption advertising to abate anytime soon. New technologies have given them the power to choose, and they're not likely to discard that ability in the coming year. In fact, with broadband reaching into more homes, expect to see dramatic changes in how businesses use the old technologies and embrace the new.
Signposts we have passed
During the past year, we've seen some traditional messaging channels lose their effectiveness while some new and as-yet largely untested technologies have piqued marketers' interests. Online marketing has focused on two areas: acquisition of potential customers and retention of valuable ones.
It can cost as much as five times more to get a new customer than it does to keep an existing one. And yet, a tremendous percentage of marketing budgets continue to be spent on acquisition. Why, you ask? Well for starters, getting new customers is easier than keeping those you already have if you're willing to ignore costs. And the glory for many marketers lies in landing new customers, not taking care of existing ones.
Online acquisition efforts have focused primarily on banner ads and the current 600-pound gorilla on the Internet -- search. Email advertising as an acquisition channel has been, and will continue to be, a challenge.
Customer retention and loyalty is where email shines. And in 2005, more marketers came to understand its importance in this area. A survey of ad:tech attendees ranked retention email as the best performing online advertising strategy, beating out both search and banner ads. Still, marketers who want to have an email relationship with their customers found it increasingly difficult.
Email Marketing: a dead end?
Once again during the past year, prognosticators predicted the death of email. And, once again, email continues to provide solid returns on investment. In fact, that ringing sound you hear isn't email's death knell but rather the chime of cash registers. JupiterResearch estimates email marketing spending will grow 30 percent per year, reaching $6.1 billion in 2007.
Yet many of the challenges we faced in the past year will remain in 2006. While I believe the levels of spam will continue to lessen, it won't go away. Attempting to curb spam, a variety of filters and blocks have been thrown up between sender and recipient. Also, ISPs have instituted a variety of authentication schemes, including SPF, SenderID and DomainKeys. But only a small percentage of marketers have taken heed. JupiterResearch found only 17 percent of marketers have implemented SenderID protocols, for example.
What I hope marketers learned during the past year and took to heart is that while email is inexpensive compared to other messaging channels, it is by no means easy. It takes a strong understanding of essential marketing strategies and a high level of sophistication to manage truly successful campaigns. MarketingSherpa reports that marketers with high open and response rates are more likely to conduct A/B tests of their offers than their less successful peers. In the coming year, I think we'll see more marketers implementing some type of segmentation strategy and working to increase the effectiveness of their online campaigns through testing and web analytics.
In short, the road on which email travels is not heading toward a dead end, but rather approaching a fork. Taking the path less traveled, in this case, can lead to email marketing successes that your competitors will surely envy.
RSS: population growing by the second
In August, Nielsen//Net Ratings found that nearly one in five U.S. internet users now visit blog-related websites, and 11 percent of those use Really Simple Syndication (RSS) to sort through the increasing number of choices available. But even more interesting, 83 percent of survey respondents who were identified by click-stream data as RSS users were unaware they were using the technology.
Many of the problems email currently faces can be avoided with RSS. It's fast becoming an important communications channel that meets consumers' need for control and marketers' needs for assured message delivery.
In November, Yahoo! made an announcement that I believe will further accelerate the already-rapid adoption of RSS. Yahoo! is putting RSS feeds into its mail product -- an important advance. It allows users to get all their major inbound information, both email and RSS, in a single place.
Inbox bound RSS feeds are especially beneficial for the emerging world of individualized RSS (IRSS). This exciting new technology allows for fully personalized communications such as alerts, notices and targeted promotions. In many ways, IRSS feels more like email than old-style RSS.
Mark my words, RSS is now well on its way to becoming one of the most significant new tools in the internet world. Individualized RSS offers the benefits of email's relationship building power without the impediments of blocked delivery, lack of security and consumer concerns about control.
New Technologies
Have you seen the new video iPod? If you have and you're like me, you want one. Currently, an estimated 20 million U.S. consumers own portable digital music devices, and most use them strictly for music. I expect that to change as content evolves.
The real "what if" comes when you think about using the kind of targeting email marketers employ every day to deliver podcast commercials that are highly targeted, relevant and interesting to each recipient. All of a sudden, this emerging new delivery approach can create tremendous value for marketers and consumers. I expect podcasting will really start to get interesting in the coming year.
A roadmap through 2006
As more companies work to solidify online relationships, targeted channels like email, RSS and mobile messaging are the route to take. My hope is that as we roll into the future, we will see different kinds of communications in different media. Perhaps we'll receive timely alerts on our phones, personal correspondence over email, and newsletters and broadcast updates via RSS.
Ultimately, what it all means is that the art and science of communication will become increasingly complex and important to business success. We need to work harder to better understand what customers want and how we can best accommodate their needs. New technologies and new ways of using the old communications channels will enable us to improve our reach and messaging effectiveness.
Buckle your seat belts. We're in for a race to the finish line at the end of20'06. As always, there will be unexpected turns and roadblocks along the way.
Safe travels!
Bill Nussey is the president and CEO of Silverpop. Under his leadership, Silverpop helps marketers cultivate and maintain long-term strategic relationships with customers by maximizing the potential of email as a relationship tool. The company differentiates itself through strong technology, strategic services and the industry's most flexible service model. In late 2004, JupiterResearch ranked Silverpop #1 in nearly every category of its annual review of email service providers.