Social media marketing has been vaunted as the natural successor to email marketing by the channel’s evangelists. New research published by the Direct Marketing Association’s Email Marketing Council, however, shows that email is stronger than ever. Dela Quist, Chair of the DMA Email Marketing Council Benchmarking Hub and CEO of Alchemy Worx, looks behind the numbers.
The rise and rise of email marketing over the past decade has undoubtedly been one of the direct marketing industry’s greatest success stories. The massive increase in the volume of emails now being sent every day, as well as expenditure on the channel, has gone hand-in-hand with the growth in online access. The Cabinet Office’s UK online annual report 2000 found that 25 per cent of UK households were online; today this figure stands at 70 per cent. More than one in 10 people also enjoy online access via Smartphone. Of course, as the physical barriers to online access are lifted through technological advances and democratisation by reduced costs, it’s unsurprising that email usage has risen exponentially every year.
Regardless of its evident popularity, the imminent death of email marketing has been prophesied with each new digital innovation. First it was RSS, then it was social media, and now it’s Google Wave .Indeed, social media is widely regarded as signalling the death knell for email marketing. As I write, Facebook has just announced its 500 millionth user, with the average user spending nearly 24 hours per month on the website. Twitter has also witnessed incredible growth over the past year; 75 million people now visit the site every month and broadcast 50 million ‘tweets’ per day. With numbers like this, it’s perhaps unsurprising that some marketers have been dazzled by the potential social media offers to reaching a large and engaged audience. However, looking closely at the numbers, we begin to see that not all is as dire as it seems for email marketing.
Putting the numbers into context
According to the findings of the DMA Email Marketing Council’s quarterly Email Benchmarking Report for Q4 2009, ESPs reported a massive surge in the volume of emails being sent by UK marketers in the build up to Christmas last year. Approximately 90 million emails per ESP were sent during December 2009, compared to just 40 million in December 2008. The huge rise in email volumes was most likely to have been a direct reaction to the dour economic climate that was prevalent throughout 2009. With budgets being slashed, marketers turned more of their focus on email marketing because of its relative cost-effectiveness compared to other direct marketing channels. The medium is also highly flexible and very accountable, so its appeal increases when budgets are reduced.
As email marketing cynics are keen to point out, there is a downside to increasing consumer contact figures: click-through rates inevitably decline. The findings of the Email Benchmarking Report certainly support this. Click-through rates for retention emails in Q4 2008 stood at 12.2 per cent, but fell nearly a quarter to 9.5 per cent in Q4 2009. While this percentage drop off is significant, and for some indicate that consumers are turning away from email, it ignores one crucial fact: the total number of consumers clicking through to websites promoted through marketing emails nearly doubled. In fact in December 2009 the number of clicks generated by email marketers in the UK by far and away exceeded the amount of click-throughs driven by the world’s most popular social networking website.
In the UK alone, 26 million people hold Facebook accounts and generate approximately 12.5 billion page impressions per month. However, according to figures published by the Association of Online Publishers in 2009 display adverts elicit a click-through rate of just 0.13 per cent. This means that display adverts placed on Facebook generate around 16 million click-throughs every month. Compare this, though, with the number of click-throughs generated by email marketing. In December 2009, ESPs reported that 9.5 per cent of the 90 million emails sent by their clients generated clicks - 8,100,000 in total. Remember, this number is only per ESP. Twenty-five ESPs took part in the report, so it’s likely that at least 200 million click-throughs were generated in December 2009 by UK email marketing activity, dwarfing the numbers delivered by Facebook.
Where next for social media marketing?
The enthusiasm with which social media marketing has been greeted is understandable. The fact that if Facebook were a country, it would have the world’s third largest population makes it an extremely inviting prospect for advertisers. However, email marketing is a far more effective driver of traffic and sales than social media.
Where email was once regarded with a degree of suspicion by many consumers, legitimate email marketing now enjoys widespread trust. This is borne out by the findings of the DMA’s 2010 Marketing GAP Analysis Report, which shows that email is consumers’ favoured channel for being contacted by brands. Gaining this cache of trust has been a long time in the making. Email marketing is now three decades old. Over the years, its practitioners have developed standards of best practice and honed their techniques through a never-ending process of trial and error. The potential of social media marketing is extraordinary, but it will be many years before this nascent platform can be truly considered to rival, let alone succeed, email marketing.
Dela Quist
DMA Email Marketing Council member & CEO of Alchemy Worx
Blog: dmaemailblog.com