Email marketing trends: Budgets set to rise in 2013

06/02/2013

Senior brand marketers are bullish about the prospects for email marketing budgets, with the majority predicting a rise in expenditure in 2013, new research published by the Direct Marketing Association (DMA) reveals.

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More than half (56%) of the 250 senior B2B and B2C brand marketers surveyed for the DMA Email Marketing Council's 2013 National Client Email Report, stated that they are “confident that expenditure on email marketing will increase this year”.

The findings indicate that email is bucking the prevailing industry trend as the figures published in the latest IPA Bellwether report1 suggested an overall decline in direct marketing spend.

The report links marketers' optimistic outlook for email's prospects to the improving commercial performance of the channel.

According to the respondents polled, email delivered an average ROI of £21.48 for every £1 spend last year – the first time the Client Email Report has published an ROI figure. Its strong performance is tied to ever-improving and more sophisticated techniques: over half of brands surveyed reported an increase in open, click and conversion rates in 2012, a 5% increase
compared to 2011 figures. The value of generic ‘one size fits all’ campaigns continued to decrease with 75% of email revenue now coming from more targeted approaches. Trigger email campaigns generated 21% of email revenue, despite low volumes sent compared to more general campaigns.

Nine in 10 (89%) respondents declared email to be "important" or "very important" to their organisation. However, in spite of email's strong commercial performance, respondents expressed concern that the channel's contribution to their businesses' bottom lines is failing to earn the recognition it deserves among senior colleagues.

Commenting on the latest study, Dela Quist, Chair of the DMA Email Marketing Council’s Email Benchmarking Hub and Chief Executive at Alchemy Worx, said: “The report characterises 2012 as the year where email has defied market trends and carried the load in terms of delivering revenue. This is equally true for our clients, who closed 2012 up on budgets and targets for email but down in other channels. The result of these successes, as the report reveals, is that marketers will be investing even more effort in email in 2013.”

In other findings, the report highlights that marketers are still facing major internal barriers to achieving greater email marketing success, with over 25% citing business goals, internal resources and goals, technology and lack of data as their primary obstacles The sixth annual National Client Email Report, which is sponsored by Alchemy Worx, polled 250
B2B and B2C brand marketers.

The report can be downloaded from http://dma.org.uk/toolkit/national-client-email-report-2013.

Executive results summary

Email continues to be highly valued with impressive ROI

• Email marketing remains critical to business, with 89% of respondents declaring email to be
"important" or "very important" to their organisation

• Email marketing's ROI is strong: it returned an estimated average of £21.48 for each £1
spent in 2012

• For roughly a third of respondents, email marketing accounts for 50% or more of all digital
business revenue

• Click and conversion rates are the factors that marketers rate most often as important to
achieving business goals

More budget and in-house resource set aside for email marketing – but marketers still feel
Constrained

• Budget allocation to email marketing increased slightly in 2012, with 15% more marketers
spending at least 30% of their budget on email than in 2011. Over half expect their budget
to increase across 2013

• More organisations are managing email marketing in-house, with staff hours dedicated to
email marketing rising accordingly

• Marketers are more comfortable with email marketing basics than in 2011, but there is still a
need for more customised, advanced training and education opportunities

• The disconnect between email's value and email's position in the organisation continues,
with internal resources and budget the top two constraints to success cited by respondents:
marketers need to better communicate email's value internally

Customers respond positively as email tactics mature

• Just over half of respondents reported open, click and conversion rates improved in 2012.
Even more expect their numbers to improve in 2013. Only less than 12% reported any
decline in these metrics

• Despite relatively low volumes, trigger email campaigns accounted for 21% of email
revenue. Over 75% of email revenue is now generated by alternatives to generic one-sizefits-
all campaigns

• Marketers are making use of a far wider number of email marketing approaches, but there
is still significant room for improvement. For example, just under half still don't send a
welcome email

Marketers finesse their list-building and usage strategies

• Marketers are getting better at using different techniques to build their lists. Organic website
traffic and transactions remain the top two acquisition sources

• Marketers are also increasing their use of segmentation: the number segmenting into more
than six different audiences rose 28% in 2012

• The growth of diverse email streams has also encouraged marketers to develop strategies
for maximum email contact levels. Some 11% more have such a strategy than in 2011

• Maximum contact frequencies have risen significantly, with the number of organisations
never sending more than one email a month to subscribers almost halving to 14%
More sophisticated integration of email with other channels

• Marketers are using email for an increasing range of objectives beyond straightforward
revenue generation, including retention, engagement, acquisition and brand awareness

• Marketers report that the best other channels to integrate with email are online marketing,
social networks, direct mail and mobile marketing – both for ROI and profitable relationship
building

Source: www.dma.org.uk

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