What is Email marketing ?

Email marketing is directly marketing a commercial message to a group of people using email. In its broadest sense, every email sent to a potential or current customer could be considered email marketing. It usually involves using email to send ads, request business, or solicit sales or donations, and is meant to build loyalty, trust, or brand awareness. Email marketing can be done to either sold lists or a current customer database. Broadly, the term is usually used to refer to sending email messages with the purpose of enhancing the relationship of a merchant with its current or previous customers, to encourage customer loyalty and repeat business, acquiring new customers or convincing current customers to purchase something immediately, and adding advertisements to email messages sent by other companies to their customers.

History

Email marketing has evolved rapidly alongside the technological growth that has occurred consistently throughout the 21st century. Prior to this growth, email marketing was not as effective because of a lack of reach, as emails were novelties to the majority of customers and potential customers. In 1978, Gary Thuerk of Digital Equipment Corp [DEC] sent out the first mass email  to approximately 400 potential clients via the Advanced Research Projects Agency Network [ARPANET]. It resulted in $13 million worth of sales in DEC products, and highlighted the potential of marketing through mass emails. As email marketing developed itself as an effective means of direct communication, a problem arose in that users were blocking out large amounts of content from emails by use of filters and blocking programs. It therefore became the case that in order to effectively communicate a message through email, marketers had to develop a way of pushing content through to the end user, without being cut out by automatic filters and spam removing software. This resulted in the birth of triggered marketing emails, which are sent to specific users based on their tracked online browsing patterns.

Historically, it has been difficult to measure the effectiveness of marketing campaigns because it is not always possible to fathom what portion of a target market has been reached. Email marketing carries the benefit of allowing marketers to immediately identify returns to investment and therefore measure and improve efficiency. Email marketing allows marketers to see feedback from users in real time, and to monitor how effective their campaign is in achieving market penetration and helps to reveals how wide or narrow a communication channel is. At the same time however, it also means that the more personal nature of certain advertising methods, such as television advertisements, cannot be captured.

Types of email marketing

Email marketing can be carried out through different types of emails:

Transactional emails

Transactional emails are usually triggered based on a customer’s action with a company. To be qualified as transactional or relationship messages, these communications' primary purpose must be "to facilitate, complete, or confirm a commercial transaction that the recipient has previously agreed to enter into with the sender", along with a few other narrow definitions of transactional messaging. Triggered transactional messages include dropped basket messages, password reset emails, purchase or order confirmation emails, order status emails, reorder emails and email receipts.

The primary purpose of a transactional email is to convey information regarding the action that triggered it. But, due to its high open rates (51.3% compared to 36.6% for email newsletters), transactional emails are an opportunity to engage customers: to introduce or extend the email relationship with customers or subscribers, to anticipate and answer questions or to cross-sell or up-sell products or services.

Many email newsletter software vendors offer transactional email support, which gives companies the ability to include promotional messages within the body of transactional emails. There are also software vendors that offer specialized transactional email marketing services, which include providing targeted and personalized transactional email messages and running specific marketing campaigns (such as customer referral programs).

Direct emails

Direct email or interruption based marketing involves sending an email solely to communicate a promotional message (for example, an announcement of a special offer or a catalog of products). Companies usually collect a list of customer or prospect email addresses to send direct promotional messages to, or they can also rent a list of email addresses from service companies, but safe mail marketing is also used.

Mobile email marketing

Email marketing now develops large amounts of traffic through smartphones and tablets. Marketers are researching ways to capture the attention of users, in both span and volume. This is because the rate of delivery still relatively low due to strengthened filters and also because certain users have multiple email accounts that serve unique purposes. Because emails are generated according to the tracked behavior of consumers, it is possible to tailor promotional material to their needs and to present relevant details to potential buyers. Because of this, modern email marketing is perceived more often as a pull strategy rather than a push strategy.

Comparison to traditional mail

There are both advantages and disadvantages to using email marketing in comparison to traditional advertising mail.

Advantages

Email marketing is popular with companies for several reasons:

• An exact return on investment can be tracked ("track to basket") and has proven to be high when done properly. Email marketing is often reported as second only to search marketing as the most effective online marketing tactic.
• Email marketing is significantly cheaper and faster than traditional mail, mainly because of high cost and time required in a traditional mail campaign for producing the artwork, printing, addressing and mailing.
• Businesses and organizations who send a high volume of emails, utilize an ESP (email service provider) to send, track and utilize information garnered from behaviors related to these emails. Understanding and leveraging consumer behavior through the insights provided by consumer response to email marketing has become an integral facet of the digital marketing landscape.
• Email provides a cost-effective method to test different marketing content, including visual creative, marketing copy and multimedia assets. The data gathered by testing in the email channel can then be use across all channels of marketing campaigns, both print and digital.
• Advertisers can reach substantial numbers of email subscribers who have opted in (i.e., consented) to receive email communications on subjects of interest to them.
• Almost half of American Internet users check or send email on a typical day, with email blasts that are delivered between 1 am and 5 am local time outperforming those sent at other times in open and click rates.
• Email is popular with digital marketers, rising an estimated 15% in 2009 to £292 m in the UK.^[7]
• If compared to standard email, direct email marketing produces higher response rate and higher average order value for e-commerce businesses.

Disadvantages

A report issued by the email services company Return Path, as of mid-2008 email deliverability is still an issue for legitimate marketers. According to the report, legitimate email servers averaged a delivery rate of 56%; twenty percent of the messages were rejected, and eight percent were filtered.

Companies considering the use of an email marketing program must make sure that their program does not violate spam laws such as the United States' Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM), the European Privacy and Electronic Communications Regulations 2003, or their Internet service provider's acceptable use policy.

Opt-in email advertising

Opt-in email advertising, or permission marketing, is a method of advertising via email whereby the recipient of the advertisement has consented to receive it. This method is one of several developed by marketers to eliminate the disadvantages of email marketing.

Opt-in email marketing may evolve into a technology that uses a handshake protocol between the sender and receiver. This system is intended to eventually result in a high degree of satisfaction between consumers and marketers. If opt-in email advertising is used, the material that is emailed to consumers will be "anticipated." It is assumed that the consumer wants to receive it, which makes it unlike unsolicited advertisements sent to the consumer. Ideally, opt-in email advertisements will be more personal and relevant to the consumer than untargeted advertisements.

A common example of permission marketing is a newsletter sent to an advertising firm's customers. Such newsletters inform customers of upcoming events or promotions, or new products.^[12] In this type of advertising, a company that wants to send a newsletter to their customers may ask them at the point of purchase if they would like to receive the newsletter.

With a foundation of opted-in contact information stored in their database, marketers can send out promotional materials automatically using autoresponders—known as Drip Marketing. They can also segment their promotions to specific market segments.

Legal requirements

Australia

The Australian Spam Act 2003 is enforced by the Australian Communications and Media Authority, widely known as "ACMA". The Act defines the terms unsolicited electronic messages, how unsubscribe functions must work for commercial messages and other key information. Fines range with 3 fines of $110,000 AUD being issued to Virgin Blue Airlines (2011), Tiger Airways Holdings Limited (2012) and Cellarmaster Wines Pty Limited (2013).

Canada

The "Canada Anti-Spam Law" (CASL) went into effect on July 1, 2014. CASL requires an explicit or implicit opt-in from users, and the maximum fines for noncompliance are CA$1 million for individuals and $10 million for businesses.

European Union

In 2002 the European Union (EU) introduced the Directive on Privacy and Electronic Communications. Article 13 of the Directive prohibits the use of personal email addresses for marketing purposes. The Directive establishes the opt-in regime, where unsolicited emails may be sent only with prior agreement of the recipient, this does not apply to business email addresses.

The directive has since been incorporated into the laws of member states. In the UK it is covered under the Privacy and Electronic Communications (EC Directive) Regulations 2003 and applies to all organizations that send out marketing by some form of electronic communication.

United States

The CAN-SPAM Act of 2003 was passed by Congress as a direct response of the growing number of complaints over spam e-mails. Congress determined that the US government was showing an increased interest in the regulation of commercial electronic mail nationally, that those who send commercial e-mails should not mislead recipients over the source or content of them, and that all recipients of such emails have a right to decline them.The act authorizes a US $16,000 penalty per violation for spamming each individual recipient. However, it does not ban spam emailing outright, but imposes laws on using deceptive marketing methods through headings which are "materially false or misleading". In addition there are conditions which email marketers must meet in terms of their format, their content and labeling. As a result, many commercial email marketers within the United States utilize a service or special software to ensure compliance with the Act. A variety of older systems exist that do not ensure compliance with the Act. To comply with the Act's regulation of commercial email, services also typically require users to authenticate their return address and include a valid physical address, provide a one-click unsubscribe feature, and prohibit importing lists of purchased addresses that may not have given valid permission.

In addition to satisfying legal requirements, email service providers (ESPs) began to help customers establish and manage their own email marketing campaigns. The service providers supply email templates and general best practices, as well as methods for handling subscriptions and cancellations automatically. Some ESPs will provide insight/assistance with deliverability issues for major email providers. They also provide statistics pertaining to the number of messages received and opened, and whether the recipients clicked on any links within the messages.

The CAN-SPAM Act was updated with some new regulations including a no fee provision for opting out, further definition of "sender", post office or private mail boxes count as a "valid physical postal address" and definition of "person". These new provisions went into effect on July 7, 2008.