Apr 14, 2008

Marketing Adventures #2: E-mail Marketing Vacillation

I was about to engage in e-mail marketing. There are two methods to go about mass e-mailing people:

* Purchase a e-mail list from a company of people who are interested in a subject for X dollars.
* Use another companies opt-in e-mail list to send out information about your company for a fee.

In general, I believe that mass e-mail is not an effective means of advertising:

* Firstly, the messages you send may go to SPAM. When a message is in SPAM, readers pay little attention to it, if at all.
* Secondly, the click through rate is very low. Back in my masters program, I took a class titled E-Marketing. The teacher stated that the response rate is 1%. So that means 1/100 people that receive the e-mail actually take some action. Then you need to consider what percentage of that 1% actually turn into customers.
* Thirdly, if a recipient did not opt-in, some of the people may complain. This is a big no no because your ISP may disable your domain name. ISPs have very strict policies against unsolicited e-mails. So buying an e-mail list from a company for thousands and mass e-mailing those people who have not opted-in may be detrimental to your website.

Let’s look at one case study. Thembid spent $3000 to use the LA Times to mass e-mail 20,000 people on its opt-in e-mail list. They received 120 hits to the Thembid site or a 6% click through rate, which is higher than 1%. 3 of those visitors signed up or 0.015% of 20,000 e-mails sent. The cost per click is $25.00 ($3000 / 120 clicks). Google PPC is way better at 30 cents per click.

In all, is e-mail marketing effective? Thembid does not think so and neither do I.

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