Is email the new DM?

B2B marketing has a reputation for being austere, traditional, somehow more serious and – dare we say it? – a touch too stuck in its ways. Most of the techniques used, from CRM to DM, incentives to conferences, are well established. Most business-to-business practitioners agree on the best strategies and there exists a happy consensus of opinion.

Frankly, consensus is boring.

With everyone in agreement with each other, the garden may be rosy but it is also terribly dull.

Rejoice then for new technology. Rejoice even harder for marketing challenges brought by new technology. And rejoice till your head hurts for email marketing.

Email marketing is a nascent medium that B2B marketers are struggling to conquer. Around each corner lurks a new problem and in each agency a novel approach as to how it may be solved.

This is all perfectly normal. Email marketing is new, the technology keeps on evolving, the marketers are continually learning and the recipients are becoming more mature, more cynical and harder to win over.

What this means is that there is everything to play for. And in B2B marketing terms, that is exciting.

The early days
Nick Martin is general manager of Mardev, a company which is an example of the rise of email marketing. A wholly owned subsidiary of Reed, Mardev specialises in customer acquisition in the B2B and professional markets. In 2000 Mardev established its email marketing business.

“Back then, email marketing accounted for next-to-none of our turnover, maybe two to three per cent at most,” explains Martin. “Now we rely on email marketing for nearly a third of turnover.”

A 30 per cent increase in turnover is a huge leap in four years, but more significant to Martin is the attitude change that runs parallel.

“As you would expect the IT sector is heavily involved in email marketing, but there is no sector that is lagging behind. In 2000 the idea of a supplier in the agricultural market undertaking email marketing to an audience of farmers was anathema. Now it’s seen as logical.”

But this huge spike in the use and prevalence of email marketing comes at a cost. As ever, the buzz and excitement of the early adopters has given way to lethargy. The market has plateaued.

“Email marketing isn’t the silver bullet people imagined it might be in 2000 or 2001,” says Martin. “The early-adopters used it and got great results because no one else was there. There was no clutter, they had amazing share-of-voice and reaped all the benefits of getting in early and being brave.”

Email marketers are now seeing response rates slow down. The latest data from Doubleclick shows that open rates for email campaigns have slowed. In Q1 2004, UK open rates were 40.1 per cent, in Q2 that figure fell to 36.2 per cent.

This shouldn’t have marketers running to the hills. As Doubleclick’s latest report states, the figures are down, but only slightly and only at the rate that should have been expected.

“The decline was seen in all countries and for the first time both Germany and the UK are seeing open rates less than the EMEA average. Year-on-year open rates are relatively steady with only a 0.5 per cent decline. This suggests a maturing of the market.”

Sarah Charlton, creative director at Moonfish, echoes Martin’s sentiments that these figures are only bad news for the lazy marketer. “It’s not a nightmare,” she says. “But it tells us that there are certain things we need to do to ensure our client’s emails are getting through and that people trust them.”

Is spam a necessary evil?
Trust is all-important in email marketing. In the same way that DM is often tarred with the junk-mail brush, so email marketing has been undermined by spam.

While the technology – corporate firewalls and spam filters – is winning back some ground, spam remains a contentious issue.

Some view spam as an irritation, something that undermines the medium while others are more bullish. Optimists within the B2B marketing fraternity claim spam has promoted best practice.

“Spam and viruses have better defined the role of email marketing in the overall mix,” says Richard Bush, managing director of Base One. “We would only ever use email marketing where there is a relationship between the company doing the communicating and the company being targeted. We never send cold emails.”

Ensuring there is opt-in is something that most agencies now take for granted. It has moved from best practice to standard practice, and this is due in no small part to spam.

Jane Byrne, product manager at Thomson Local, explains: “The negative publicity around spamming has had a positive effect on marketing practices. Most people have a very clear opt-in strategy – legitimate email marketers will run the spammers out of town. Spam has definitely done us all a huge favour as it has made the client more discerning and cautious.”

But opt-in is not the panacea. If most agencies are following opt-in procedures, and therefore sending emails to people who have requested them, why are only 36 per cent being opened? Do these figures suggest that despite opting-in, consumers still view 64 per cent of all legitimate email as spam?

Probably not, but it does mean that campaigns are not being targeted properly or monitored, tested and adapted appropriately.

“The point is that it won’t be spam if it’s relevant content to a relevant targeted audience,” says Mark Power, managing director of marketing solutions provider Concep.

Just because someone opted in doesn’t mean you can’t send them spam. If your email is executed poorly – weak design, bad content, sent too frequently and with too large a file size – the chances are even a warm contact will press delete.

A most measurable medium
Despite the potential pitfalls, email marketing does offer numerous advantages. In fact, Bush of Base One goes so far as to herald it ‘the ultimate direct marketing medium’.

Despite what may at first appear a bold statement, it is perhaps the one point upon which the practitioners all agree. Email marketing offers huge advantages, not least cost-effectiveness, mensurability, adaptability and the fact it is highly targeted.

Actually, there is some debate about cost-effectiveness, but we will come to that later.

Bush is evangelical: “It’s one-to-one, it’s highly targetable, every communication can be tailored to the specific individual and their position, it’s highly responsive, it’s immediate and gets straight through to the individual. You don’t have the gatekeeper issues you have with mail or the clutter you get with advertising. It’s also perfectly and immediately measurable.”

Mensurability is one of the key advantages, not least when seen in comparison to traditional direct marketing.

“I come from a DM background,” says Power of Concep. “In DM, small mail campaigns would take weeks and often weren’t that effective because you couldn’t track the results properly. Now results can be seen very fast. The technology allows us to track everything: who looked at what, for how long, where they went next, who deleted, who became undeliverable and who opted out.”

It is easy to see why, in a sector dogged by lack of accountability to the bottom line, this level of analysis is such a boon. It is also cited as the main reason, along with the death of print and distribution, why email marketing is so much more cost effective than DM.

“Typically it’s a fifth the cost of other direct media, and five times as responsive,” says Bush. “So potentially 25 times as cost effective as other direct media.”

Cost saving – fantasy or reality?
Certainly, cost savings are one of the most attractive and most regularly trumpeted benefits of email marketing but not everyone is so sure.

Martin, of Mardev, a clear advocate of email marketing, is one such person who has broken ranks. He questions the validity of claims of cost effectiveness and argues that comparisons to DM are misleading.

“If you see email marketing as simply putting together a pretty HTML and kicking it out the door, then you’ll save loads of money. You’re only paying for the list and a small amount of creative effort.”

Martin says this is a common mistake that companies make. Email is so accessible and so commonplace – we write hundreds each week – that it can be seen as an easy solution.

“A campaign should comprise a few tests, a creative treatment, a set of response objectives that tie in with your website. The website must be designed to facilitate this. The offer in the email has to be properly reflected on the site, you must ensure the landing page and the subsequent flow-through to fulfilment is all properly executed. Once you’ve done all this and done it all properly, I really don’t think there is a huge cost saving.”

At a time when response rates are falling, Martin may have a point. It would seem that the campaigns which show the best results are those that exist as part of an integrated strategy, with clear objectives and supporting work both online and off.

To sell or not to sell?
Email is new. People are feeling their way toward the best solutions, strategies and campaigns. This is never more evident than when asking practitioners about selling through email.

Should B2B email campaigns sell? Clearly a sale is the end game of all marketing, but should this be brokered within the email or not? Is it better to deliver content only and build up brand awareness?

There was one lone voice who expressed his opinion that “in B2B email marketing you cannot sell” and everyone else disagreed to differing degrees.

Power of Concep was the lone voice. “If you send an email to 100 directors telling them about the latest innovations your company has come up with and say now buy, it’s not going to work. It never will.”

He argues that you should send relevant, targeted content but never push the sale.

“You’ve got to send information they can use, that builds trust and strengthens the brand. If you try to sell, it will create bad feeling. People will resent being sold to while they are at work.”

The counter arguments run from the vehement to the diplomatic.

Bush of Base One couldn’t disagree more strongly. “I don’t agree with that at all. Emails are great for selling; the ideal thing about using email for selling is that you can create specific offers for specific individuals with specific needs. If you sell through the website that price is available to everyone, so email becomes very useful.”

Feeling that alliteration is the best form of attack, Bush goes further: “You can almost have an individual pricing element for each prospect. That’s pretty much perfect pricing policy.”

Jane Byrne of Thomson is most sympathetic to the notion of not selling through email. “Typically B2B is at the higher end, pushing products with much greater value. A typical campaign should focus on lead generation, awareness raising and information sharing.”

Whereas Charlton of Moonfish occupies the middle ground. “There are times when selling is appropriate. Sometimes people want to buy and you can frustrate them by sending too much content. Equation Research did a lot of user survey work and discovered that service emails – providing transaction history and account information – are the most useful. The next is content-based emails and scheduled newsletters.”

Clearly the jury is out. For some campaigns in some markets, it will be wrong to sell whereas elsewhere a sale is precisely what is needed. The range of responses demonstrates a range of different experience from a medium in its infancy.

And if the developments to date have been significant, they are nothing next to those about to befall the sector.

Where next?
Technology in email marketing has remained relatively under-exploited. This is particularly the case in B2B marketing. Where some B2C campaigns have utilised data-rich executions, this is something yet to be seen in B2B.

There are two main reasons for this. Firstly, while agencies have been aware of the potential of video streaming and interactive emails that resemble microsites for years, their clients have not. Secondly, it’s questionable whether such campaigns would hit the spot. It could be seen as too tricky, and could even run up against firewalls and filters due to file size and the presence of graphics, colours and other such features that get the spam alarm bells ringing.

These debates still rage, but Bush of Base One is confident that we are on the cusp of greater functionality. “The likelihood is that in the way online advertising has seen an explosion of rich media used to good effect, the use of rich email based applications will increase.”

Charlton of Moonfish though disagrees with this assessment and feels that with email clients becoming increasingly locked up, emails may even see a swing away form HTML and back to plain text. “I would really argue against the idea of data rich emails and interactive emails. It’s clearly great for agencies and may have its place in the consumer market, but that’s all.”

There is very little consensus over any aspect of email marketing. For some it’s a great place to sell, while for others it’s the last place to hawk your goods. Many extol the cost-saving virtues of the medium while others question the validity of such arguments. Even the technological advances are unclear: will your next email feature video and be more akin to a microsite, or will it come through in plain text?

Email’s frontier land is a place that offers rags and riches. It’s all to play for and while some pioneers may become unstuck picking their way through the uncertainty, there’s little doubting that email has the potential to revolutionise direct marketing. On that we’re all agreed.

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