I have been in and around e-mail and banner advertising for 12 years. In fact one of my first jobs out of business school was the Group Product Manager for AvenueA’s new media solutions, which included its precision e-mail and mobile products. Yes, even in 2001, we thought it was the “year of mobile.”
You can find a primer on e-mail marketing, how it can be used for both acquisition and retention marketing and some of the classic advantages/disadvantages here. For the sake of this blog article, I will focus on email marketing as a prospecting vehicle and–for which–you would often rent 3rd party lists of e-mail addresses to e-mail against. Your goal is to try to convert a generic “suspect” into a semi-qualified “prospect”. This is in contrast to loyalty/retention e-mails where you are e-mailing your “house list” to share information and perhaps softly up sell current customers on new products/capabilities.
Back in 2001, I was talking to people about how they could use a combination of banner advertising and e-mail to acquire customers at low cost per leads. Although that article is not archived, a very good friend, Brady Brewer, who is now a very senior marketer at Starbucks, built on this point in an article for ClickZ. He wrote:
Rather than relying solely on banner advertisements and third-party email lists to acquire new customers, you can put into play a strategy that integrates the strengths of both banners and retention email marketing: using promotional incentives in banner ads as a low-cost mechanism for luring prospects to an opt-in page, and using subsequent email campaigns to offer greater product details and loyalty programs to close the deal and generate a long-term relationship.
Using the standard rates for banner CPMs, open rates, etc. of the day, he proved that you could reduce your cost/sale by 73% compared to banners alone and 85% compared to e-mail list rentals by using the two together—a match made in heaven.
The math has changed over the years as CPMs and open rates have dropped, but the principle has not. Even today, 11 years later, it surprises me that more people do not use a media-integration strategy that reduces cost of acquisition and cost of sales.
Fast forward to 2012 and I am back talking about e-mail and banner advertising but from a slightly different angle—i.e., using banners as a “lead-nurturing” type activity via e-mail retargeting. Just recently, I had a great conversation with Tim Peterson, a journalist for DM News, and he did a fabulous job capturing the broader strategy in his article here.
In this article, Tim quotes leaders from Responsys, which has been around FOREVER, AdRoll (an AdReady competitor) and Epsilon. While the gentlemen quoted all provide good insights and slightly different strategies to approach e-mail retargeting, we all agreed that it is surprising that there has not been more uptake on this strategy.
I told Tim that I think the major reasons this tactic is not used more often is because of marketing silos. The people, activities and budgets are often not coordinated across a marketing department. In my experience, it is rare that the marketer-at large companies–who controls the outbound “customer” communications is the same person responsible for lead generation communication with “prospects”. Interestingly, I was just reading What Sticks, by Rex Briggs and Greg Staurt last night and they were making a similar point. I.e., one of the main reasons 30% of all marketing dollars go wasted is because of the established hierarchies at large fortune 500 companies and the agencies that support them.
In this environment, e-mail is often relegated to a direct response medium. Display, until recently, has been thought of more as a branding medium. Finally, there is the reality that the set of names on an in-house list is probably small, relative to the number of visitors to one’s site—which are usually the cookies that are re-targeted. However, the value of re-targeting is directly tied to the size of the cookie pool. Thus, it makes sense to use whatever means you can to build the cookie pool.
Here is the best part. Whereas it may have been time consuming and onerous to coordinate the e-mail and retargeting strategies because of the need to integrate multiple platforms, it truly is not much work if you have a system like AdReady’s in which you can load retargeting tags directly into the campaigns.
If you are interested in learning more about how to set up e-mail retargeting today, please contact your Account Manager directly. Otherwise, stay tuned for a case study of one our clients doing this well and the step by step process on how to do it in our platform.