The From Line

To build on my colleagues' positions in previous postings, social media is eroding email's social use in spite of its reliance on the medium and desperate claims that these two mediums can exist symbiotically in their current forms. Just as email displaced the U.S. Postal's role as the primary choice for delivering love letters, summer camp news and vacation postcards, social media is rapidly overtaking email for these same correspondences for the 35 and younger crowd. If you're a B2B marketer you can skip reading the rest of this -- because I have yet to see LinkedIn and the like encroach on email's power in the business world. However, consumer marketers better pay attention, because your ability to achieve the same ROI year over year with email is going to be turned on its side.

Email was not built for socializing. The basics of email are still the same as they were when the medium was first put to use with DARPA net. Very little has changed over the past 40 years, with the exception of HTML rendering and a few other nuances. As a result of email's efficiency and cost, it had an easy win for displacing the U.S. Postal Service for social correspondences. However, as an incumbent against social media networks, email will sorely lose ground in the coming years because of its inability to evolve as a medium and the corruption of the medium by spam. Social media networks build on the email experience, enhancing its basic features with true interactive tools and providing a far superior experience.

Who cares If social media relies on email? In defense of email in this debate, many ESPs and email marketers argue that email is the backbone of social media, providing the timely alerts that prompt users to respond to one another. Based on this fact, they argue that social media and email exist symbiotically, feeding off one another's strengths and coexisting in a harmonious marketing world. I strongly disagree with this sentiment. Social media dilutes email's luster, as it diverts activity away from the medium to a closed network. This is not a symbiotic coexistence. This is one medium displacing another while reducing it to a cheap pager.

Stop thinking you can integrate email with social media. A lot of email marketers have come up with the thought process of, "if we can't send email to social networks, we should try to integrate the two." I have my sincere doubts that it's possible to integrate email with social media for every industry. Despite social media's infancy, people are already annoyed that their so called "friends" are constantly trying to pitch cosmetics, insurance, mortgages and other products and services, intruding on their "social" experience. Now email marketers are giddy about the prospects of someone receiving an email and posting it to Facebook or MySpace. Please! I don't doubt that this happens -- but thinking it will occur on such a scale that it will increase ROI using the same crappy content is ridiculous. If you want to create buzz, give them something real and unique to talk about. Just using a social media link doesn't cut it. It didn't with "forward to a friend" and it won't for social media. either.

Your inbox will soon look like your metal mailbox. When was the last time you received a personal letter in that useless hunk of metal crap sitting on your front lawn? In fact, when have you found anything of value in there lately? Your inbox will soon be reminiscent of your mailbox, as social correspondence shifts from email to social media. Once you remove "social" email from your inbox, what's left? Junk, commercial email (some people will categorize commercial email as the former) and bill reminders. How social are those? Real fun! Something I really want to share with my friends and family. Face it. The inbox is changing and will be marginalized for social use.

The last holdout of hope for email to retain its crown -- From what I can see, there is one last hope for email to remain a superior marketing channel for the long run. If social media networks become the next inbox providers by opening their intra email systems, only then can email's luster be restored. I have been predicting this for the past couple of years and have been wrong... so far. My argument is that social media networks will need to continue to find ways to keep people glued to their screens for longer periods of time so that they can sell more ads or command higher prices from their existing advertisers. Since email is a major consumer of time, it's a natural fit for social media networks. While this scenario has not yet come to pass, I'm still standing strong by my prediction.

Email will not die -- just be marginalized. Just as direct mail isn't completely dead, email isn't going anywhere, either. It's still the most cost-effective marketing medium and delivers the biggest bang for the buck. However, email's effectiveness over time will become marginalized for consumer marketers as social interaction over the Internet shifts from email to social networks.

Since I'm the CEO of an email service provider, some critics might think I'm crazy for spreading the idea that email will soon become marginalized. To them my answer is, it was crazier for railroad barons to think they were in the railroad business when they saw their first airplane in the sky.

In case you haven't kept up with the email marketing industry over the past few months, it has been star of glimmering hope for marketers enduring economic turmoil. In fact, the industry has been faring so well that many email service providers (ESPs) have announced record growth for 2008 and expect to do equally as well in 2009.

Even though demand for ESP services is high and clients are spending more, there is still a lot of competition. Now is the time to try to squeeze more value from your ESP, while many are fat and happy.

But before you start calling your ESP to demand a rate decrease, there are some things you should know to help you get the best deal. To start with, if you're a casual email sender or use an entry-level email service provider that services small businesses, you're out of luck. Their pricing is set in stone since they rely on a massive number of customers to be profitable. However, if you send a lot of volume and use an advanced email service provider, you might find them not only a bit more flexible on price, but also more accommodating in offering additional features and services.

Get your best price. Whether your contract is up for renewal or you're shopping for a new ESP, now is the best time to get the best price. ESPs are walking a tightrope between protecting their current client base and taking advantage of growth opportunities, so they will be more flexible with their pricing terms, especially with existing clients. I have seen some ESPs reduce their fees by up to 50% to keep an existing client from changing to a competitor. However, many ESP fees were bloated to begin with so in the extreme 50% reduction case, the customer is now paying market price.

Just as you would negotiate with any other vendor, you need to be armed with a competitor's quote when you start pricing negotiations with your ESP. In order for your quote to even be considered in negotiations, it needs to be from an ESP in a competing class. By competing class I mean ESPs with similar feature sets, client sizes and services offered. Don't expect your ESP to budge on price if you present a low-ball offer from a competing ESP lacking two of the three of the above criteria. Once you finagle a competing quote, expect your ESP to beat that price by at least 5% -- sometimes 10%. For big volume senders, this can be a huge cost savings.

Get a unique IP address and custom DNS for FREE. All good email marketers know that a unique IP address coupled with a custom DNS is one of the marquee standards for exceptional deliverability, so much so that it is a requirement for most white listing and sender-certified programs. For this fact alone, many ESPs charge very hefty IP address rental and DNS configuration fees, even though the IP address costs them $1 a month from their ISP. This cash cow ESP service needs to be deflated in these tough economic times. There's no reason why your ESP shouldn't GIVE you a unique IP address at no extra charge -- especially if you're a high volume sender.

Get access to your ESP's API for FREE. Another ESP cash cow is charging access to use its application programming interface (API). This tax amounts to crimes on par outlined in the RICO Act and should be considered legal extortion. It costs your ESP next to nothing to offer Web services and it's something they can easily give you access to at no charge. If your ESP starts whining that your access consumes resources and there is a true cost associated with access, just kindly remind them that there are a number of other ESPs that don't charge for the same service and that they made up for the costs in three months of charging access to it. If your ESP's whining turns into cries, just string the sales guy or account exec along for a couple of weeks. They will come around and you'll get a better deal. Don't worry! Your sales guy will still eat.

Get personalized training thrown into your deal. Most email marketers want to start sending with their new ESP before the ink dries on their agreement, but are at a loss on where to begin. Instead of providing personal training sessions, many ESPs give clients half-baked instructional vcasts and webinars, expecting their clients to retain the details of complex features. In my opinion, there's no reason why an account exec can't spend a couple of hours with new or existing clients to make sure they understand the complexities of feature sets and application logic. Given this low cost to the ESP and high return to the client, I am confident that if you demand the extra attention you will receive it. If you're prepared to spend thousands of dollars with an ESP, you should get some personalized handholding and love.

Unless you're in healthcare, the federal government, or email services, the effects of an economic pinch by now have turned into a nasty bite with relief only to be had in cost savings. Bloated ESP licensing and ancillary access fees will soon give way to market conditions enabling email marketers to take advantage of cost savings and increased ROI from the email medium. The best deals are out there. All you have to do is throw a little fit.

Gold Lasso’s RegReady is a fast growing co-registration network – serving hundreds of websites and processing hundreds of thousands of co-registrations. RegReady’s co-registration network serves both publishers and advertisers.

I always get a chuckle when my email marketing colleagues push "relevance" as an industry best practice.  If we as marketing experts have to remind the common practitioner to ensure their message matches their market, it proves email marketing is an institution with bottom of the barrel admission standards.   Based on my experience, most email marketers fail not with relevance, but rather with the timeliness of their messages.   Despite the advanced timing features ESPs offer, email is treated like other mass marketing mediums by marketing executives.  If you don't believe me just ask any CEO of an email service provider about the percentage of their clients who use their timing features.   I can promise you an uncomfortable look on their face will emerge when you bring the subject up.    If the main objective of commercial email is to sell (widgets, ideas, relationships, donations, etc.) then a message's timing trumps most other best practices.  All top sales people will tell you the calendar is their best sales tool because it ensures timely follow up around specific purchasing cycles.  Top sales people know that being in front of the customer at right time is far more valuable than frequent and blanketed calls.   Therefore savvy email marketers have learned from their sales counterparts to view time as a holistic window into their customers' needs, timing campaigns according to specific dates, relationship cycles and behavior instead of obsessing over the right time of day to send email.  Below are some examples about how the savvy email marketers use time to increase sales.

Date Driven Campaigns

When most email marketers think about date driven campaigns, the first thing that comes to mind is a Happy Birthday email.  Although birthdays are important life benchmarks, they are just one of many criteria that can be used to build relationships with customers and anticipate spending patterns.  Other lifecycle events that are rarely used unless they are industry specific are birth, graduation, wedding, divorce, death, moving and religious ceremonies such as a bar-mitzvah or confirmation.   However since many email marketers are stuck on birthday campaigns yet execute them ineffectively I've included the following example.

 Sheryl, a marketer of plus size women's apparel took the philosophy of not reminding her customers of their age to heart by marketing around their birthdays.  She conducted market research zeroing in on the psychographics of her customers and discovered that around their birthday they felt unhappy with themselves because of the prospects of getting older while overweight.  So instead of sending her customers a happy birthday email reminding them of their age, she decided to send messages that looked much different than her typical campaigns.  Her messages contained motivational headlines such as "Older is Sexier" and "Big Girls Get Love Too!" three weeks before the actual date.  After conducting a three month test she discovered the test group was 26% more inclined to complete a purchase around their birthday with woman ages 34 to 41 spiking to 32%.  Now Sheryl has her birthday campaigns down to a science automating the timing of every message.

Timing the Relationship

Ask any married couple and they will confirm that relationships change with time, a fact that transcends from personal to business and business to consumer.   Companies with an extensive business history should have the ability to predict relationship cycles with their customers.   Just look to your office water cooler for example of relationship timing.  The water delivery company knows there are 40 people in your office who drink on average 24 ounces a day.   Since there are 640 ounces in a water cooler bottle and the office consumes on average of one and two third bottles per day assuming a five day work week the delivery guy knows that you will purchase roughly 34 bottles each month.  One day the delivery man comes to the office and finds a newly installed soda machine.  Based on previous experiences with other offices of this size, the water company knows to scale the order back by 20% to keep the customer happy.  Identifying these pinch points in a customer relationship is tantamount for long term success.  Just as an old and happy married couple can complete each other sentences and anticipate what the other will do so too does a successful email marketer when it comes to timing the relationship cycle of their customers.

Timing Behavior

From click to sales timing to triggered follow ups, timing behavior is the golden chalice of email marketing yet the most difficult to implement.  Having the advantage of knowing who opens and clicks on what and where they go after they click gives unparalleled insight into your customers however requires research and investment to parlay that data into effective behavior timing campaigns.   Steve, an email marketing manager for an online electronics retailer knows from research that if his flat screen televisions are price competitive, a website visitor has a higher probability of making a purchase within two weeks after conducting research on Cnet or other shopping related websites.  Therefore, he created a process using web analytics to entice visitors who came from Cnet to give up their email address.  If no purchase was made within 6 hours, the email address placed in an automated two week campaign with a series of 7 messages that included top recommendations from shopping sites.  The campaign yielded roughly an 18% conversion rate within the two week cycle. 

Even though technology makes it easier to implement campaigns based on timing one common thread sticks out in above examples, research.  Timing is a science that takes a combination of primary and secondary research compiled, well, over time.  Timing is so valuable in marketing (especially email marketing) that only its counterpart can shadow its importance, money!

Every January email marketing pundits try to make predictions of what the industry will bring for the upcoming year. They range from the career conservative to off-the-wall reckless. Some self-serving predictions blur the line between editorial and advertising so much that only a New Year's hangover can help you tell the difference between the two. Even though the accuracy of annual email marketing conjectures can be debated, almost all have some sort of truth to them. With that being said, below are my four bold predictions for 2009 prefaced by the fact that I have a short-term 50% accuracy rate and an 80% long-term rate. So I'm usually right, eventually.

The price per email for the middle and enterprise marketplaces will drop.

Commercial email and the ESPs used to send them are both commodities. In a depressed economy, most commodity prices fall, especially ones with excess supply. Technologically speaking, with few exceptions, there's no difference between the commercial email you and your competitor send even if you use a more expensive ESP. It's true that more expensive ESPs tend to provide better feature sets and customer service -- however, feature and service parity have been achieved in the Soho market and are rapidly becoming reality in the middle and enterprise marketplaces. Therefore, I predict that customers using middle and enterprise market ESPs will squeeze hard during the contract renewal process in 2009, forcing the industry average price per email down. No rocket science here!

Commercial email volume will increase exponentially, forcing down email's lofty ROI.

Based on my above assumption, simple economics suggests that any high-demand commodity with an infinite supply and falling price will be over-consumed. Unlike traditional business models, the overconsumption of commercial email will cause a positive relationship between falling prices and ROI. The reason for this positive relationship is simple. As consumers receive more commercial email, marketing messages are lost in the clutter, making the medium less effective, and challenging marketers to come up with new ways to grab consumer attention. Hence my next prediction....

The demand to stream video via email will increase.

All savvy email marketers know that it's impossible to stream video via email as a result of enhanced anti-spam technology. What was once considered an advanced email marketing trick in 2002 quickly fizzled as inbox providers rushed to put anti-rendering measures in to curb the onslaught of spam, thus destroying many early ESPs' video-via-email business models. However, increased bandwidth and the fanfare of YouTube and similar video Web sites have resurrected the demand for video via email, prompting companies such as GoodMail to develop solutions that will keep both ISP and marketer happy. The catch is that not every marketer will qualify for GoodMail's certified video service -- creating two sets of have and have-not marketers, and forcing the have-nots to simulate video players with still images encouraging click-thoughs to a video-enabled landing page.

Social networking sites will become the new inbox providers.

I made the above prediction in January of '08 and was off the mark, but I'm going to continue to stick with it in '09, as I'm confident it will come to fruition (any year now). I laugh every time I hear someone claim that social networking will kill email marketing. It's true that social networking has cut into email's market share of consumers' personal communication, but this phenomenon will be short-lived as social networking sites rush to become the new inbox providers. The reason for my confidence is that social networking sites have yet to live up to financial expectations, forcing them to find other avenues to monetize their traffic. This has already started the early adoption of traditional ad models, allowing social networking sites to nibble at Yahoo, MSN and Google's market share. With the adoption of a traditional ad model comes inbox services, as email is one of the largest consumers of Internet time. If MySpace, FaceBook and the like want to sell more ad space, they will need to guarantee activities with proven performance.

Do you think my predictions makes sense for 2009 -- or are they completely off the mark? I guess we'll have to wait until next year to find out. In the meantime, if you have any additional insights you would like to share, please comment below.