Businesses cashed in big time on email marketing last year, according to DMA’s National Client Email Report. It's return on investment (ROI) hit 2,500% - a figure that has email marketers pretty excited for the year ahead.
From the 128 big-cheese email marketers that were interviewed, 56% are expecting to receive a larger budget this year following the 16% year-on-year leap of ROI. For every £1 spent on email marketing, the average return was almost £25 in 2013, a figure which leaps to over £30 when just considering B2C campaigns.
These hiked up returns have been put down to improved targeting methods. The study revealed that more marketers are segmenting their campaigns than in 2011; the percentage tailoring their approach for six or more different audiences is now 38%, in comparison to 29% two years previously. In turn, the number of marketers not using any form of segmentation fell from 19% in 2011 to 11% in 2013. These audience-specific emails accounted for 60% of all email-driven revenue, and retailers estimate that about 39% of their total revenue came courtesy of them 2013; that’s a 9% increase on 2012.
“Email will be grabbing the headlines once again”, predicts James Bunting, chair of the DMA Email Marketing Council, “as it has delivered a 16% increase in ROI in 2013. This increased return can be attributed to the growth in the use of segmentation techniques, closer integration of email with other channels such as social media and an increase in the use of automated campaigns like welcome, birthday and abandoned cart messages. From a marketer’s point of view automation of emails is not only highly efficient but also it gives them the time to actually ‘market’ when it comes to email. I’m sure we’ll see this trend continuing into 2014.”
Meanwhile, Dela Quist, CEO of Alchemy Worx (sponsor of the 2013 survey) discusses what the news means for future growth opportunities: “Optimism about email marketing budgets on the back of increased targeting ignores the elephant in the room, that success requires more resource. At the same time the report highlights that the largest barrier to this growth is internal resource availability, with additional reservations about the levels of email marketing expertise available.
“With around 75% of email marketing still being run by in-house teams, the obvious solution to both of these challenges is to bring in outside help. But rather than buy in an additional person or two, we expect to see more brands looking to outsource their email marketing – getting the benefit of additional resource, but from email specialists. Both budgets and senior buy-in were both reported as significantly less of a barrier than previous years, thus further paving the way for more outsourced models.”