The Evolution of the E-mail Service Provider

When e-mail emerged as a key marketing channel in the late 1990s, marketers’ needs were pretty basic: acquire e-mail addresses and send out one message to everyone. “Batch and blast” wasn’t a bad term—it was the only term. Since then e-mail marketing has matured to the point where companies need more-sophisticated solutions to meet their communication needs. As those needs increase and transcend offline and online channels, service providers, too, are evolving.

Is death inevitable for the traditional e-mail service provider (ESP)? You can almost hear the bagpipes playing in the distance. Perhaps that’s too strong, but the reality is that changes are occurring for ESPs, and change is good. ESPs are no longer confined to just e-mail. Rather, they are morphing into multichannel camps to better serve marketers’ needs.

Let’s face it: There will always be a need for ESPs. But today, the way in which marketers are using them is expanding. As end users more frequently interact with brands in multiple channels, particularly in an increasingly connected world, marketers are challenged to deliver not only the right message at the right time, but also in the right channel. Today consumers demand more of brands, and in turn, marketers expect more of their solutions providers. As a result, this multichannel evolution reflects the growing need for ESPs to mature into more-complex solutions providers.

Consequently, I belief three “flavors” of solutions providers have emerged:

1) the traditional ESP. This model of service provider typically caters to small and midsize businesses that have less complex e-mail marketing needs. They offer basic e-mail delivery capabilities and ready-to-use creative templates, handle bounces, and are typically self-service. Even this group of ESPs is changing, however, as evidenced by Constant Contact, one of the more dominant players in this space, and its recent acquisition of Nutshell Mail, a social media tracking service.

2) the online solutions provider. E-mail marketing is no longer just about sending e-mails. Businesses are creating new approaches to engage customers by personalizing content and integrating campaigns across a multitude of online channels. These solutions providers give marketers the tools to use online channels, including e-mail, mobile, and social networks, in a coordinated and directed manner. These vendors fill the gap by assembling relevant communication to help marketers achieve increased results through online marketing efforts. This group focuses more on the emerging online disciplines rather than on integration with traditional offline programs.

3) the multichannel solutions provider. Some solutions providers have broadened their portfolio to offer multichannel solutions that transcend virtually every marketing channel, including traditional offline as well as online media. They offer all-encompassing expertise in e-mail, social, web, mobile, direct mail, brick-and-mortar, and catalog, among other tactics, and have strong strategy and analytics groups to facilitate more-advanced segmentation and multichannel program development.

As traditional organizational silos at brands are evolving to better manage multichannel marketing programs, the need for tightly integrated databases, robust reporting and analytic functions, and multichannel development and execution capabilities are increasing. Multichannel solutions providers have the capabilities and expertise to deliver highly technical, industrial-strength solutions to handle the most complex marketing programs.

Each category is designed to grow as the needs of businesses change and programs expand. Smart vendors that anticipate those changes are now offering a greater array of solutions to stay in the game. The result? The higher that companies climb the “new” solutions provider ladder, the greater the vision for a multichannel marketing approach.

No matter which type of provider you choose, e-mail marketing is a top customer engagement tool. It is a channel in and of itself, but it is also a medium that supports every other marketing channel. If used properly, e-mail will remain a dominant component of cross-channel marketing strategies for years to come.

As you evaluate your e-mail marketing goals, choose a solutions provider that accurately reflects your needs today and takes you where you want to go tomorrow.

So if you are looking for basic e-mail marketing services, then the traditional ESP is the way to go. If, however, you are seeking a provider that can tie in online capabilities, then an online solutions provider will fit the bill. But if you are searching for a true multichannel solutions provider that will support your brick-and-mortar and other offline functions as well as your online and e-mail programs, then the multichannel solutions provider will meet your needs.

Which one will you choose? The choice is yours.

Geoff Smith is vice president of marketing for Epsilon, a marketing services provider.