Spending on Email Marketing Will Increase to $2 Billion by 2014

A new report by Forester Research shows that spending on email direct marketing in the US will grow to $2 billion by 2014. The increase adds up to an 11 percent compound annual growth rate. The reasons behind the expected growth are the decreasing cost per thousand (CPM), the high return on investment (ROI) and the increase in the usage of social email accounts. Consumers are expected to receive more than 9000 unsolicited direct marketing emails a year by 2014.

“By 2014 direct marketers will waste $144 million on emails that never reach their primary target,” said Forrester Research Vice President and Principal Analyst David Daniels. “Successful Direct Marketing pros will alter their tactics to overcome inbox clutter and increase relevancy.”

Direct marketing is the marketing branch that engages consumers directly, bypassing a media platform, usually through mail, email or by phone, most of the times unsolicited. While disliked by many consumers, this form of marketing is sometimes favored as it has some unique advantages. By using direct marketing businesses can easily see the “positive” responses, meaning the ones that followed up on the campaign, which isn't possible with normal media marketing campaigns. However the amount of “negative” responses, the ones offended by the messages, is much harder to estimate, making the practice a somewhat risky measure.

The report also notes some of the directions in which email direct marketing is headed. One important aspect is “retention email,” the emails that consumers have agreed to receive, which will make up for one third of all email marketing. The report also suggests that the increasing complexity of email marketing means that some businesses will use dedicated email service providers. “The use of email in social networks will be one of the biggest challenges for direct marketers,” said Daniels. “Over the next five years, marketers must bridge the gap between social and traditional inboxes with social sharing tools.”