|Email marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fund-raising messages to an audience. In its broadest sense, every email sent to a potential or current customer could be considered email marketing. However, the term is usually used to refer to:
Researchers estimate that United States firms alone spent US $400 million on email marketing in 2006.
Comparison to traditional mail
There are both advantages and disadvantages to using email marketing in comparison to traditional advertising mail.
Email marketing (on the Internet) is popular with companies for several reasons:
A report issued by the email services company Return Path, as of mid-2008 email deliverability is still an issue for legitimate marketers. According to the report, legitimate email servers averaged a delivery rate of 56%; twenty percent of the messages were rejected, and eight percent were filtered.
Companies considering the use of an email marketing program must make sure that their program does not violate spam laws such as the United States’ Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM), the European Privacy and Electronic Communications Regulations 2003, or their Internet service provider’s acceptable use policy.
Opt-in email advertising
Opt-in email advertising, or permission marketing, is a method of advertising via email whereby the recipient of the advertisement has consented to receive it. This method is one of several developed by marketers to eliminate the disadvantages of email marketing.
Opt-in email marketing may evolve into a technology that uses a handshake protocol between the sender and receiver. This system is intended to eventually result in a high degree of satisfaction between consumers and marketers. If opt-in email advertising is used, the material that is emailed to consumers will be “anticipated”. It is assumed that the consumer wants to receive it, which makes it unlike unsolicited advertisements sent to the consumer. Ideally, opt-in email advertisements will be more personal and relevant to the consumer than untargeted advertisements.
A common example of permission marketing is a newsletter sent to an advertising firm’s customers. Such newsletters inform customers of upcoming events or promotions, or new products. In this type of advertising, a company that wants to send a newsletter to their customers may ask them at the point of purchase if they would like to receive the newsletter.
With a foundation of opted-in contact information stored in their database, marketers can send out promotional materials automatically—known as Drip Marketing. They can also segment their promotions to specific market segments.
In 2002 the European Union introduced the Directive on Privacy and Electronic Communications. Article 13 of the Directive prohibits the use of email addresses for marketing purposes. The Directive establishes the opt-in regime, where unsolicited emails may be sent only with prior agreement of the recipient.
The directive has since been incorporated into the laws of member states. In the UK it is covered under the Privacy and Electronic Communications (EC Directive) Regulations 2003 and applies to all organisations that send out marketing by some form of electronic communication.
The CAN-SPAM Act of 2003 authorizes a US $16,000 penalty per violation for spamming each individual recipient. Therefore, many commercial email marketers within the United States utilize a service or special software to ensure compliance with the Act. A variety of older systems exist that do not ensure compliance with the Act. To comply with the Act’s regulation of commercial email, services typically require users to authenticate their return address and include a valid physical address, provide a one-click unsubscribe feature, and prohibit importing lists of purchased addresses that may not have given valid permission.
In addition to satisfying legal requirements, email service providers (ESPs) began to help customers establish and manage their own email marketing campaigns. The service providers supply email templates and general best practices, as well as methods for handling subscriptions and cancellations automatically. Some ESPs will provide insight/assistance with deliverability issues for major email providers. They also provide statistics pertaining to the number of messages received and opened, and whether the recipients clicked on any links within the messages.
The CAN-SPAM Act was updated with some new regulations including a no fee provision for opting out, further definition of “sender”, post office or private mail boxes count as a “valid physical postal address” and definition of “person”. These new provisions went into effect on July 7, 2008.
CAN-SPAM does not pre-empt state laws that prohibit falsity and deception in email messages. Some states allow recipients of false and deceptive email messages to sue the the business whose products are advertised in the false or deceptive email. Examples of falsity and deception in emails include false header information, advertising products as free when they are not, misrepresenting the source of the email, unauthorized use of third party domain names, and misleading or blank subject lines.