Spiral Marketing: The More You Know, The More You Can Know

January 24, 2009

Is email losing it’s effectiveness? Uh . . . Yeah?

Posted in response to the question on LinkedIn:

I don’t know how you define “effective,” but email marketing, in my opinion, is definitely losing its effectiveness.   I think any discussion of effectiveness is relative to other media – that doesn’t mean email is more effective; it rather means email is losing traction less quickly than alternative techniques.  For instance, DMNews, in a recent article (http://preview.tinyurl.com/4qleog), tried to rationalize the promise of email for the future (consider the source . . .) with the statistic that the main reason people acces the internet is to use email.  This, side by side with the statistic that the younger demographic are more likely to use social networks, rather than email, seems a bit “optimistic.”

Also, the justification itself is a false analog – DKNews discusses this statistic – that the internet is primarily used for email – as though, QED, that validates email as a marketing technique, when in fact, the more relevant statistic is that people are finding alternative means of communicating, devoid of all the commercial email “noise.”   Across the board prices are down for email lists, response rates are down, etc. etc.   They just aren’t down as far as other means of mass marketing – that becomes a real conundrum, because if all we are faced with is a set of bad choices, of which we can only choose to select the least bad, then we are in trouble.

Someone also made the point that the party is being ruined for “legitimate” marketers by spammers – I think it is tough to have anything but a subjective discussion on that point, relevant to whether you are talking about your email blasts, or someone else’s.   The real issue is that marketers as a group tend to spoil their own parties before they start – they do so honestly – they are trying to do the right thing for their companies.  With a lack of viable mass marketing options, though, marketers create so much noise in aggregate that they dilute the effect of their own messages, as well as everyone else’s.   I suspect the same will rapidly occur for SMS-based campaigns, or any other emerging mass-marketing, “push” technique.

That becomes a tough row to hoe – you have to meet your goals with your marketing campaigns, but the ground has moved beneath everyone’s feet, and I am not sure anyone has a real handle on what “mass marketing” means in this new terrain.

I also believe that email service poviders do not help their case when they make claims devoid of any rational basis; one individual claimed the ROI for email is $57 for every dollar spent, vs $22 for non-email online marketing dollars; in other words he was suggesting the ROI for email marketing is 5,700%, compared to an ROI for non-email online marketing of 2,200%.  Put another way, this statistic suggests a payback period for your entire annual marketing budget – assuming a 24/7 business – using email is a little over 6 days! I certainly think that meets my hurdle rate requirements; I’d be interested in this individuals source for these figures, and how “ROI” is being calculated in this case.  The broader issue, however, is that – to me, at least – such claims propagate because of a sense that in this brave new world, nothing works the way it used to, and marketers are looking for answers in the heart of a maelstrom.  Through a combination of hope and factoids  based in psuedo-science, I sense that mass market service providers seek to create an arbitrage opportunity for themselves.

Unfortunately, in this “brave new world” (thanks, Aldous), I suspect the real answers are going to be quite a few orders of magnitude more difficult than we would like . . .

More on this later.  In the meantime, hold on to your hats – it’s going to be a hell of a ride!

K

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