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Email Marketing - Closing the Loop from Acquisition to Retention - Jupiter, June 2000

Email Marketing - Closing the Loop from Acquisition to Retention - Jupiter, June 2000

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  • 1. Jupiter E-Mail Marketing Closing the Loop from Acquisition to Retention Michele Slack Senior Analyst Online Advertising Strategies
  • 2. © 2000 Jupiter Communications Jupiter 2 E-mail Marketing – What are We Talking About E-mails from Commerce or Content VenturesE-mails from Commerce or Content Ventures Focused on:Focused on: • Acquiring New CustomersAcquiring New Customers • Driving Repeat VisitsDriving Repeat Visits • Cross-Selling; Up-SellingCross-Selling; Up-Selling In the Following Formats: • RetentionRetention – messages out to house lists– messages out to house lists • AcquisitionAcquisition – messages out to purchased lists– messages out to purchased lists • SponsoredSponsored – placing ads in existing content driven– placing ads in existing content driven messagesmessages • Driving LoyaltyDriving Loyalty • Promoting ProductsPromoting Products • Reinforcing the BrandReinforcing the Brand
  • 3. © 2000 Jupiter Communications Jupiter 3 Key Questions • How Effective is E-mail Marketing? • How Are Consumers Reacting to E-mail Marketing? • How Are Companies Using E-mail Marketing? • What Is the Expected Growth for E-mail Marketing? • How Will Marketers Maintain a Valuable Dialog with Consumers Through E-mail Over the Long Term?
  • 4. © 2000 Jupiter Communications Jupiter 4 Key Finding • The number of marketing e-mails the average consumer will receive per year will increase over 40-fold in the next 5 years. • In order to maintain high e-mail response rates and low unsubscribe rates in this new competitive environment, companies must perform end-to-end integration across: – Media – Channel – Data • And they must do so today.
  • 5. © 2000 Jupiter Communications Jupiter 5 Metrics E-mail Direct Mail E-mail Direct Mail Sponsor- ships Banner Variable Prod. $0 $50 $0 $50 $0 $0 Media CPM $0 $0 $200 $110 $25 $15 Deliver CPM $30 $500 $0 $500 $0 $1 CTR 10% N/A 7% N/A 1.5% 0.5% Conversion 5% 3% 2.5% 1% 2.5% 2.5% Cost/ Conversion $6 $18 $114 $66 $67 $128 Execution Time 3 Weeks 3 Month 3 Weeks 3 Months 3 Weeks 3 Weeks Response Time 48 Hours 3 Weeks 48 Hours 3 Weeks 48 Hours 48 Hours Up-front Creative Costs $1K $20K $1K $20K $1K $3K For Marketers Focused on Direct Response: E-mail is the Killer App Retention Acquisition Pub. 4/00
  • 6. © 2000 Jupiter Communications Jupiter 6 One to Two Percent: 31% Three to Five Percent: 34% Six to Ten Percent: 13% Ten Percent or More: 9% Zero: 13% Marketers Are Not Blind to the Power of E-mail Source: Jupiter Executive Survey (3/00); n=32 Percentage of Marketing Budget Spent on E-mail Marketing
  • 7. © 2000 Jupiter Communications Jupiter 7 Acquisition Is Difficult Because Consumers Focus on the Known 14% 13% 14% 22% 24% 47% 68% 6% 0% 20% 40% 60% 80% 100% None of the Above Site/Prod. Info. Useful Reminders Promotions/Offers Entertainment Useful Information Site/Prod. Info. Promotions/Offers Companies with Previous Contact Companies with No Previous Contact Reasons Consumers Find E-mail Marketing Messages Useful Source: Jupiter/NFO Survey (1/00); n=1,287
  • 8. © 2000 Jupiter Communications Jupiter 8 Focus on Deepening Customer Relationships and Acquiring New Customers 11% 29% 29% 46% 61% 18% 0% 20% 40% 60% 80% 100% Other Shorten Purchase Cycle Up-sell Cross-sell Acquire New Customers Deepen Relationships Source: Jupiter Executive Survey (3/00); n=28 What is the Goal of Your E-mail Marketing Efforts?
  • 9. © 2000 Jupiter Communications Jupiter 9 E-mail Is Rarely Incremental… Comparisons Hint at Growth 39% 32% 11% 4% 14% 0% 20% 40% 60% 80% 100% Online Advertising Direct Marketing Off-line Advertising Incremental Other How are You Funding Your E-mail Marketing? Source: Jupiter Executive Survey (3/00); n=28
  • 10. © 2000 Jupiter Communications Jupiter 10 0 50 100 150 200 250 1999 2000 2001 2002 2003 2004 2005 E-mail Is Growing in Leaps in Volume 3 billion 268 billion Retention-based Acquisition-based E-mail (in billions) Source: Jupiter Internet Direct Marketing Model, 3/00 Sponsored
  • 11. © 2000 Jupiter Communications Jupiter 11 Spending on E-mail Grows Concurrently $7.3 billion $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 1999 2000 2001 2002 2003 2004 2005 $164 million ($ in billions) SpendingonE-mail Retention-based Acquisition-basedSponsored Source: Jupiter Internet Direct Marketing Model, 3/00
  • 12. © 2000 Jupiter Communications Jupiter 12 Direct Mail to be Cannibalized by 13 Percent by 2005 $47.8$48.5$48.3$47.5$46.0$44.1$41.9 $7.0 $4.2$2.4$1.3$0.6 $0.2 $0.1 12.8% 8.0% 4.8%2.6% 1.2%0.4%0.1% $0 $10 $20 $30 $40 $50 $60 1999 2000 2001 2002 2003 2004 2005 0% 10% 20% 30% 40% 50% ($ in billions)($ in billions) Source: Direct Marketing Association, Jupiter Internet Direct Marketing Model 3/00 DirectMailSpendingDirectMailSpending PercentageofDirectMailCannibalizedPercentageofDirectMailCannibalized Cannibalization Cannibalized Direct Mail Spending Percentage of Revenue Displaced
  • 13. © 2000 Jupiter Communications Jupiter 13 The Fight Is on for Consumers’ Attention in Their Inbox 1999 2000 2001 2002 2003 2004 2005 1,746 2,059 2,420 2,758 3,094 3,511 3,990 40 131 276 482 761 1,133 1,612 E-mail Received per User per Year Non-work Related, Personal Marketing 40-fold Increase Pub. 4/00
  • 14. © 2000 Jupiter Communications Jupiter 14 Marketers Must Perform End-to-End Integration to Maximize Value of E-mail Acquisition Retention Media:Media: Increase AcquisitionIncrease Acquisition EffectivenessEffectiveness Channel:Channel: Shift CommunicationShift Communication to High Efficiencyto High Efficiency MediaMedia Data:Data: Increase MarketingIncrease Marketing Intelligence/ValueIntelligence/Value ValuetoConsumer Pub. 4/00
  • 15. © 2000 Jupiter Communications Jupiter 15 Integrate Messaging to Maximize Response Rates Degree of Response Change due to Additional Advertising Exposure Much More Likely: 10% More Likely: 39% Indifferent: 44% Less Likely: 2% Much Less Likely: 3% Almost 50% Positively Influenced Source: Jupiter/NFO (1/00), n=1,287
  • 16. © 2000 Jupiter Communications Jupiter 16 Aggressively Growing House Lists Requires Channel Integration RetailRetail WebWeb PhonePhone HOUSEHOUSE LISTLIST AcquiredAcquired ListList ViralViral Sponsors’Sponsors’ E-mailE-mail Pub. 4/00
  • 17. © 2000 Jupiter Communications Jupiter 17 Initial Sign-up Data Provide Valuable Targeting Information How Often: Daily, WeeklyHow Often: Daily, Weekly When: Morning, EveningWhen: Morning, Evening What: Subject/Offer InterestsWhat: Subject/Offer Interests Who: Gender, AgeWho: Gender, Age Profile Database Pub. 4/00
  • 18. © 2000 Jupiter Communications Jupiter 18 Begin Data Loop by Using All Available Targeting Information Name:Name: Location:Location: Interests:Interests: Purchase Information:Purchase Information: Pub. 4/00 Explicit User Provided Data • InterestsInterests • DemographicsDemographics Observable User Data • Purchase InfoPurchase Info • Surfing InfoSurfing Info DifficultyinObtainingInformation
  • 19. © 2000 Jupiter Communications Jupiter 19 Test to Optimize Results Offer/SubjectOffer/Subject $5.00 Off, Free Shipping, 10% Off$5.00 Off, Free Shipping, 10% Off Text, HTMLText, HTML Past Purchasers, Men, Teens, etc.Past Purchasers, Men, Teens, etc. Creative FormatsCreative Formats SegmentSegment TimingTiming Time of Day, Time of WeekTime of Day, Time of Week Pub. 4/00
  • 20. © 2000 Jupiter Communications Jupiter 20 • Open Rate*Open Rate* • UnsubscribesUnsubscribes • Click-throughClick-through RateRate • Clicked LinksClicked Links • ConversionConversion RateRate • Pass AlongPass Along Rate*Rate* Close Loop by Tracking Results and Growing Targeting Data E-Mail Outputs * Available only for html messages • Level ofLevel of InterestInterest • FatigueFatigue • EffectivenessEffectiveness of Targetingof Targeting • Subject/PromoSubject/Promo InterestsInterests • Purchase InfoPurchase Info Pub. 4/00
  • 21. © 2000 Jupiter Communications Jupiter 21 Summary • Do Not Let Current High Results Lure You into a False Sense of Complacency • Competitive Heat Is Turning Up • Nail the Basics • Integrate Message, Channel, and Data • Do it TODAY • Or Risk Having Your Dialog Drowned Out by the Rising Din
  • 22. Jupiter Thank You

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