EMAIL RETURN ON INVESTMENT ANALYSIS

By Posted in - Email on October 16th, 2013

Email return on investment best amongst all marketing channels

Email may not be the most glamorous marketing channel, especially with all the hype surrounding social media, but when it comes to effectiveness, email return on investment is the clear leader.

In a study conducted in 2011 by the Direct Marketing Association‡, email recorded a return on investment of $40.56 for every dollar spent on it. In comparison Search Engine Marketing (SEM) returned $22.24, Internet display advertising generated $19.72 and social media provided $12.71 per dollar.

ROI COMPARSION ACROSS DIGITAL CHANNELS

Email ROI Comparison

Email’s high return of investment makes it a favourite amongst organisations with 72% of companies rating email as “excellent” or “good” for ROI#.

But why is that? Didn’t spam kill email? Do people even use email anymore? And what about all the other new ways to communicate online, don’t consumers prefer to receive information through other channels such as social media?

In an October 2011 survey^, only 27% of respondents said they had a positive attitude towards Facebook marketing. However, the humble email registered the highest positive rating amongst all measured digital formats, sitting at 47%.

ATTITUDES TOWARD DIGITAL ADVERTISING 2011

Attitudes toward email

On top of that, 54% of consumers said they have a more favourable opinion of companies that send them email†.

This sense of loyalty and trust towards email stems from marketers largely contacting recipients that have granted permission to receive communications through an opt-in subscription process. Implementing a proper opt-in procedure allows a consumer to feel a greater sense of control over their relationship with a brand and a perception of reciprocal value from the interaction.

A recent study by Exact Target supports this statement, with 66% of online consumers saying they have made a purchase as a result of an email, a result that’s three times the percentage of people who purchased in response to a message delivered through Facebook (20%) or text message (16%).

Overall

15-17

18-24

24-32

35-44

45-54

55-64

65+

Email

66

50

65

68

71

71

68

65

Direct Mail

65

51

50

57

72

72

75

85

Telephone

24

21

20

22

30

30

23

27

Facebook

20

32

24

27

16

16

8

6

Text (SMS)

16

27

24

22

15

15

4

1

Mobile App

10

22

14

17

6

6

2

1

Twitter

6

16

11

10

2

2

1

0

LinkedIn

4

10

4

8

1

1

1

0

 

Overall, email continues to provide some of the strongest results in terms of return on investment. The average dollar spent on email marketing yields the greatest return in revenue compared to most forms of marketing, whilst providing a good customer response. Despite its age (relative to digital), email still outperforms a large majority of the other digital channels currently available. However, as with any marketing approach email should not be your only channel and a diverse and strategic marketing mix should be the approach for any successful marketing plan.

‡ All figures are in US dollars.

# Econsultancy “Email Marketing Census 2011″

^ Survey conducted by adpropo

† Epsilon (Oct 2008)