Email marketers optimistic about 2014 budgets as ROI hits 2,500%

More than half of UK client-side email marketers anticipate increasing their 2014 email expenditure after ROI for the channel reached 2,500% in 2013, new research published by the Direct Marketing Association (DMA) has revealed.

According to a panel of 128 senior B2B and B2C client-side email marketers interviewed for the DMA’s annual National client email report, 56% expect to see increased marketing budget allocation to email in 2014. Optimism for the channel’s outlook this year has been underpinned by a 16% leap in average ROI from £21.48 in 2012 to nearly £25 (£24.93) in 2013 for every £1 spent on email campaigns. This rises to an average of £30.52 for B2C campaigns.

The report’s authors have attributed a heightened focus on better-targeted campaigns to the increase in ROI. There has been a strong emphasis on list segmentation as the percentage of marketers segmenting campaigns for six+ audiences rose from 29% in 2011 to 38% in 2013. The amount of marketers not using segmentation techniques dropped from 19% in 2011 to 11% in 2013. Segmented emails accounted for 60% of all email revenue in 2013, compared to 55% in 2012. As a result the percentage of revenue marketers attribute to targeted email has also risen from 30% of total revenue in 2012 to 39% in 2013.

Increased social activity has also made a big impact on email ROI as it has increased levels of brand engagement with consumers and helped to drive a rise in the acquisition of new email addresses.

James Bunting, chair of the DMA Email Marketing Council’s benchmarking hub, commented:

“Email will be grabbing the headlines once again as it has delivered a 16% increase in ROI in 2013. This increased return can be attributed to the growth in the use of segmentation techniques, closer integration of email with other channels such as social media and an increase in the use of automated campaigns like welcome, birthday and abandoned cart messages. From a marketer’s point of view automation of emails is not only highly efficient but also it gives them the time to actually ‘market’ when it comes to email. I’m sure we’ll see this trend continuing into 2014.”

In other findings, the report highlights a shift in emphasis of the business objectives of email. Retention having been the primary focus of email campaigns in 2012, declined from 78% to 62% in 2013. Instead 72% of marketers cited engagement to be the driving force behind email marketing programmes in 2013, a 2% increase since 2012.

B2B marketers also found regular newsletters to be the most prevalent type of message (58%), closely followed by welcome messages (40%) and thank you messages (33%). Breaking news alerts (20%), first purchase offers (20%) and purchase confirmation emails (20%) were the most widespread type of email message among B2C marketers. The frequency of contact made with individual email addresses has declined in 2013. Contacts received no more than three emails per month, while four emails were sent to each contact in 2012.

Commenting on the latest study, Dela Quist, CEO of Alchemy Worx, sponsor of the DMA’s National client email survey 2013, said:

“Optimism about email marketing budgets on the back of increased targeting ignores the elephant in the room, that success requires more resource. At the same time the report highlights that the largest barrier to this growth is internal resource availability, with additional reservations about the levels of email marketing expertise available. With around 75% of email marketing still being run by in-house teams, the obvious solution to both of these challenges is to bring in outside help. But rather than buy in an additional person or two, we expect to see more brands looking to outsource their email marketing – getting the benefit of additional resource, but from email specialists. Both budgets and senior buy-in were both reported as significantly less of a barrier than previous years, thus further paving the way for more outsourced models.”

The eighth annual National client email report, which is sponsored by Alchemy Worx, provides industry statistics and insight from brand and client side marketers. It reveals how the role of email shaped marketing plans in 2013, how brands integrate email with other channels and the amount of revenue generated through email marketing.

Download the report

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Contact

Ed Owen, Head of PR
Tel. 020 7291 3324
Email ed.owen@dma.org.uk