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E-Mail ROI Is Falling

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Nov 8, 2007 

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DM Confidential  |

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E-Mail ROI Is Falling

Though the return on investment garnered from e-mail marketing operations is still healthy, there has been a downward trend in recent years, and it is forecasted to continue through 2007 and 2008.  This is according to the U.S. Direct Marketing Association.

In 2005, e-mail marketing ROI was $57.25 for every dollar spent, while in 2006 this figure dipped to $51.58.  In 2007, this number is expected to be $48.56, with e-mail marketers spending $500 million for $23 billion in sales.

This decline in ROI is expected to continue through 2008, where DMA predicts the figure will be $45.65, with marketers spending $600 million for $27 billion in sales.

Part of the explanation for this downhill procession could be the increased sending of e-mails that do not generate any revenues, such as order confirmations and double opt-ins, though these may have subtle, indirect influences on revenues generated.

Still, this negative trend does not seem to be dampening any efforts to utilize the potential that lies in e-mail marketing, as is exhibited in the increased spending expected next year of $100 million.

Richard Gibson, chair of the benchmarking hub at the DMA E-mail Marketing Council, suggests that marketers start a dialogue with e-mail service providers to get some help.  “Many suppliers or ESPs – email service providers – have the ability to work with the marketing function within a small company and show how their tools can be used effectively to increase response,” he says.

Sources:
http://www.bizreport.com/2007/10/email_marketing_continues
_to_generate_impressive_roi.html

http://www.webpronews.com/topnews/2007/10/26/email-effect-lessens 

Jason Hahn is a writer for DM Confidential

Compliments of DM Confidential

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