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Email Advertising Trend Shows Steady Decline

Generating digital revenue via email advertising is becoming more difficult than ever based on current trends, technology and competition for consumers’ attention.

That doesn’t mean it’s dead, just that it’s not nearly as bright an opportunity as it was some years ago.

In fact, the Internet Advertising Bureau has dropped email advertising as a product category that it tracks in its trend reports.

In the first half of 2013, email ad revenue totaled $78 million or less than 1 percent of search revenue, according to research reports from the IAB.

Email advertising trends

Email advertising revenue in millions. Source: IAB. Graphics: © Promise Media

By comparison, revenue reached $230 million in 2008. The drop since then has been steep as mobile and social media have risen.

What Went Wrong

E

mail advertising became the victim of viruses, user preferences and more efficient forms of digital advertising.

Visual display in emails became an opportunity for spammers and other Internet troublemakers. One common method of infecting a computer with a virus is via an embedded image.

The HTML code used to enhance an email body with colors, fonts and graphics can also embed scripts that trigger the virus once the recipient opens and views the ad.

As a result, some spam filters began to block images altogether while email clients added a feature that allowed users to block all images automatically unless they clicked on a button to display them.

“Some sources indicate that as many as half of all email images are blocked.”

The image would have to be extremely enticing to get the email recipient to click on that button.

Some sources indicate that as many as half of all email images are blocked. In other words, the effectiveness of display email advertising is cut in half by that one development. Although text advertising remained an option, text usually has much lower click rates.

User preferences then intersected with the growth of mobile. A mobile phone typically downloads data more slowly and often at a higher cost for accounts with bandwidth limits.

Anyone accessing email via mobile is less likely to allow images because of those two reasons alone.

At the same time, the growth of social media has contributed to a more efficient return on investment.

A typical open rate for many email newsletters is around 20 to 30 percent depending on the industry and quality of the newsletter.

The click rate for such newsletters often runs about 5 to 6 percent.

Effective social media campaigns may see two to three times those click rates or even higher.

In addition, major online players such as Google, Facebook and others are able to track users and capture demographic and geographic data more easily with mobile, search and social media, which provides better targeting for advertisers.

Email More Vibrant for Marketing

A
report from The Radicati Group predicts a decline of emails sent worldwide among consumers in the years ahead.

Despite the estimated decline, there is no question that email remains an important form of marketing because of its low cost of entry, high targetability and ease of implementation.

An email newsletter with a 6 percent click-through rate performs substantially better than a banner ad with a national average click rate of 0.1 percent.

The challenge of making money from email marketing is clearing getting bigger. The challenges of growing and maintaining an accurate email marketing list continue.

But email remains a viable form of marketing for any business that understands the value of having multiple channels of promotion.

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