The results of our sixth annual Email Marketing Industry Census 2012, published today in association with Adestra, has shown that companies consider the ROI from email marketing to be higher than for most other digital channels including social media marketing.
In fact, in terms of the company respondents who said that email marketing was "excellent" or "good" for return on investment, email was higher than any other channel except SEO.
This year's study has also found that companies adopting best practice and using ESP platform functionality (beyond basic 'batch and blast'), are significantly more likely to see a strong financial return from their email campaigns.
In total, 70% of company respondents taking part considered the ROI from email to be "excellent" or "good". But do all marketers feel the same way?
At the beginning of the census, we asked the question, "Do you use an email service provider for anything other than the basic broadcast of email?". Only 40% of respondents cited that they did.
We then compared the difference between those who said they did use an email service provider (ESP) for more than basic broadcast, with whether they considered the ROI from email to be excellent or good.
For those marketers who used an ESP for more than just basic broadcast, they were 32% more likely to state that email marketing offered an "excellent" or "good" ROI.
The extent to which companies get a good return from email was also found to be correlated with whether they carry out testing, whether they use at least basic segmentation and whether they have integrated their email activity with other business functions, such as CRM and web analytics.
Consistently, it was found that those using advanced functionality and putting greater efforts into their email marketing campaigns were more likely to consider the ROI from email to be "excellent" or "good".
According to the research, only 31% of companies surveyed regularly test their email marketing campaigns. But 81% of companies who do regular testing for email marketing say their ROI from email is "excellent" or "good", compared to 72% for those who do "occasional" testing, 65% for those who do "infrequent" testing and only 37% for those who "don't test".
The research also found that companies who are practising basic segmentation are 95% more likely to rate email ROI as excellent or good than those who do not use even basic segmentation, nor have plans to do so.
Such results mirrored the findings of email marketing in the US, with Econsultancy's Email in Action survey showing that those simply 'batching and blasting' were seeing reduced returns.
Henry Hyder-Smith, Managing Director at Adestra, said:
This year, delving deeper into the data, shows a direct result of using best practices is better ROI. So doing more segmentation, more testing, and integrating email with CRM, web analytics and sales data, all show significant growth. Get the basics right, and you will sell more.
This was a view shared by Morgan Stewart of Trendline International, another contributor to the report. Morgan said:
What I am sensing and seeing, is that there is a growing disparity between the 'haves' and 'have-nots' – an erosion of the middle class in email. For a long time, marketers could send email that wasn't that great and still generate a return on investment. This created a mentality of 'if it's not broke, don't fix it'. For those people that are not integrating, personalising, and using other tactics for their email, there is now a cost to not doing that.
Despite the fact that greater email sophistication (and even basic best practice) produces better results, many marketers have not been taking advantage of this. The census found that only 31% of companies operated welcome programmes through email, and only 28% sent out a triggered email in response to a site visit or sign-up.
While email may not be seen as the most fashionable digital marketing technique, the fact remains that it offers a worthwhile investment for marketers and should definitely not be discredited in favour of other (perhaps less effective) channels.
Furthermore, in light of the challenges that email is facing, email marketers need to step up their game to ensure the best results.
For more information, download our Email Marketing Industry Census 2012.
Andrew Warren-Payne is a Research Analyst at Econsultancy.
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