A survey of UK email marketers has found that almost half of companies are failing to track their return on investment from email.
The Email Marketing Industry Census 2007, published by E-consultancy in association with Adestra, surveyed more than 500 in-house and agency respondents across different industry sectors.
The overriding and most worrying finding is that 47% of in-house marketers are not measuring how much revenue their email campaigns are making despite a high level of investment in this channel.
The Census also found that, on average, companies are spending a fifth of their online marketing budget on Email Marketing (second only to website spend).
But despite this high level of investment, 81% of email marketers say they are not using email marketing as effectively as they can, compared to only 13% who are.
Linus Gregoriadis, Head of Research at E-consultancy, said: “Email
is such a widely used weapon in the online marketer’s armoury that it
is surprising that so many companies are struggling to use it as
effectively as they would like. Tracking return on investment is
crucial but too many organisations are not doing this.”
He added: “The Census shows that a major part of the problem is lack
of skills and training. Some 42% of respondents said that this was an
issue.”
With its major sales and communications potential, and relatively
low cost, email marketing is undeniably a fast growing industry: 78% of
companies are set to increase their email marketing spend (according to
DMA, November 2006); and the email services market is growing at 20%
per annum (according to E-consultancy’s Email Marketing Platforms
Buyer’s Guide).
However, the growth cannot continue in the longer term without the systems in place for tracking the results back to spend.
Given that £178 million was spent in the UK on email marketing
platforms and services in 2006 (according to E-consultancy), the
findings of the census suggest that up to £84 million of this
investment may be untracked marketing budget which may or may not be
working.
Paul Crabtree, Marketing Director at Adestra, said: “It is critical
for future growth, and makes basic business sense, to be able to
measure ROI. In fact, it can severely stunt growth if you can’t measure
ROI as it will make proving the business case for extra investment
almost impossible. The point is that email marketing is probably the
most direct channel to be able to measure ROI – and it is a relatively
simple process to enable it.”
Of companies that were able to measure ROI, the figures are
promising: more than half of company email marketers (55%) say that
their ROI from email is three times or more. Almost a third of company
respondents (32%) say that their ROI is five times or more.
Other findings from the Census include:
Lack of skills & training is perceived to be the biggest barrier
to effective email marketing. Some 42% of respondents viewed this as a
problem. The next biggest barriers to effective email marketing were
lack of budget / finances (39%) and lack of strategy (36%).
More than half of Company Email Marketers (57%) said their
organisations were using less than 50% of their email systems’
functionality. Less than a third said they were using more than 50% of
their email systems’ functionality.
Organisations are being held back by their inability to integrate
email with other sales & marketing activities. Three quarters of
respondents said there is ‘some integration but room for improvement’.
One in ten respondents said there was no integration at all and only
12% said ‘they are on top of this’.
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