Special Delivery: E-Mail Marketers Look Ahead To 2008

(Direct) Speak to e-mail marketers for any length of time about their craft, and sooner or later the topic of deliverability will come up.

This year’s e-mail roundtable was no exception as four top e-mailers outlined what they see as having the biggest impact on the industry in the last year and going into 2008. The consensus: There’s no easy answer when it comes to reaching the inbox.

Participants also had interesting things to say about changes they’d like to see in their clients’ behavior. Logistics forced Direct to conduct this roundtable virtually through separate interviews with Bill Nussey, CEO of e-mail service provider Silverpop; Luis Rivera, CEO of ESP Lyris Inc. (formerly J.L. Halsey); Scott Olrich, CMO at e-mail marketing technology firm Responsys; and Tricia Robinson-Pridemore, vice president, market and product strategy for e-mail insourcing technology company StrongMail Systems.

DIRECT: What’s had the most profound impact on the e-mail marketing industry in the past year?

NUSSEY: People are actually starting to do multichannel integration. That was originally conceived of as ‘Hey, let’s tie our direct mail and our e-mail together and hit ’em twice.’ The results were positive. But what we’re seeing now is Web analytics systems and e-mail systems getting tied together and much more real-time or semi-real-time behavior-based targeting being done, rather than the old-school ‘target segment, infer results and target segment again.’ I think we’re seeing a completely different view of how multichannel marketing works.

DIRECT: Shop.org’s State of Retailing Online 2007 report backs you up on that. Twenty-eight percent of the retailers surveyed said they’d tried behavior-based targeting and 24% gave it very high marks, indicating that not many are doing it, but those that are have seen results.

NUSSEY: Here’s the trick: Everybody knows behavior-based targeting works, but the amount of trouble involved has been a barrier. As the capability becomes more available and marketers can just click buttons to do it, people will use it. But if they have to run an IT integration project, or pay $25,000 to their e-mail service provider to do it manually, then they’re not going to try it. That feature will penetrate the market as more ESPs make it available in their tools. The story of this industry is the availability of technology.

RIVERA: What’s happened during the last year is more internal fighting, particularly among C-level officers, as to the right technology and the right medium to be advertising on. I say that because, with the emergence of Web 2.0, clearly a lot of areas such as MySpace, YouTube and RSS have gotten a lot of attention. But the workhorse is really e-mail marketing. At the executive level, people really don’t understand that. More importantly, they see e-mail as something trivial, so they’ll say ‘Just go ahead and blast that campaign.’ It’s interesting that we even hear the word ‘blast’ today, because it means you’re not even thinking about your e-mail. But marketers are beginning to realize that e-mail really is about reputation. If they’re not sensitive to their readers, then one, they can just block them; or two, they can simply get off the list. So on one hand you have executives saying ‘Just blast that list and get me some leads,’ and on the other you have people saying ‘I really can’t do that.’

ROBINSON-PRIDEMORE: A big thing that’s happened to e-mail marketers during the last year is that budgets have increased. That’s a good indicator of channel adoption — not how much mail people are sending, but the quality of the mail.

OLRICH: One of the bigger things is that most e-mail marketers have done a terrible job at using traditional direct marketing tactics like segmenting, RFM and lifetime value analysis. The reason they’ve done a terrible job is e-mail doesn’t cost them anything, so they just send it out. What we’ve found is that not enough customers are doing basic segmentation. I’m seeing a lot of development in real-time offer management and segmentation based on business rules without the marketer having to do anything. There’s going to be huge development in the automation of that [activity]. You’ll get a feed and it will automatically, in e-mail, [determine] what the best offer is. We’re going to move beyond segmentation and into offer management.

DIRECT: What are the biggest challenges and opportunities facing e-mail marketers going into 2008?

NUSSEY: Deliverability’s getting funky again. The ISPs made their first pass at authentication and did virtually nothing with it. But what we’ve seen in our talks with the ISPs is that they’re about to step up seriously in the next couple of quarters over how they view authentication. And of course, each ISP has a completely different technique and requirement, which I guess raises the value of ESPs because they can invest in these techniques and share them across many different clients. If you ask e-mail marketers if content matters in spam filters, 90% of them are going to say yes. Yet all the studies show that [only] a tiny amount of filtering is done on content these days. It’s all done on reputation. So you have all these well-intentioned people whose lives depend on doing deliverability well and who are simply misinformed about the way things have shifted.

RIVERA: There clearly is no ‘easy’ button for deliverability. You can’t just say ‘I’ll pay Goodmail or Habeas’ because at the end of the day so much of it is driven by best practices.

DIRECT: Absolutely. Much of what determines whether or not you get in the inbox is how you handle your own list.

RIVERA: Yes, and I think marketers are starting to realize that. One of things people should consider is blowing up their e-mail programs. Re-opting in your list may be a good thing, and getting rid of people who don’t respond may be a very good thing. That may partially solve your reputation issues. Determining what to do to an e-mail program is obviously going to be different for each company. It’s about realizing that just because your e-mail has worked for the last three or four years doesn’t necessarily mean it’s OK.

ROBINSON-PRIDEMORE: By and large e-mail marketers are tired of talking about deliverability, and they’re tired of all the vendors making deliverability promises. So many vendors have come out and said ‘We’ve got the thing that’s going to solve the problem of getting your e-mail delivered.’ And e-mail marketers are wise to the fact that no vendor has the magic bullet that’s going to get them delivered across every ISP. Vendors can make sure the technology side of it is as optimal as possible, but they can’t ensure delivery when you still have the variables the e-mail marketer is responsible for, such as list practices.

DIRECT: If you could change one thing your clients do, what would it be?

RIVERA: The biggest thing customers do is they become accustomed to ‘This works.’ If you were a company growing at, say, 5%, would your investors be satisfied with that? No. That’s the way I would describe e-mail marketing today. The people who’re using it are content with the results they’re getting. But if they just started segmenting, for example, they’d get a much better return on investment.

ROBINSON-PRIDEMORE: I wish they’d spend more time on the strategy behind how they message. And I wish they’d spend more time on the strategy behind how they integrate this channel with others, as well as how to optimize the channel.

OLRICH: I would like them to think about a program approach vs. a campaign approach. When E-Loan, for example, found that people were abandoning mortgage applications, it didn’t say ‘Let’s just send a campaign to them.’ [Instead,] E-Loan automated a program where it sends an e-mail to [mortgage applicants] 30 minutes after they abandon. If they don’t respond, another e-mail goes out in seven days. And if they don’t respond to that, it sends a print-on-demand piece. That’s a program across the life cycle. The best marketers in our client base are the ones that have adopted that approach.