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The Future of Email Marketing
Along with mobile, new tools and technologies are changing email marketing—is your brand ready?
For the rest of the February 2014 issue of CRM magazine please click here
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While email remains, for the time being, the most cost-efficient way to connect with customers, many marketers worry that recent developments could hamper its effectiveness. Thanks to recent changes made by various email service providers (ESPs) and the tremendous growth of mobile devices, email marketing is evolving significantly, leaving marketers with little to do but adapt to the advent of new tools and technology in a classic case of sink or swim.

Throughout the past year, major changes have occurred in the email marketing realm. For one, many ESPs have changed the rules for email deliverability. Since the new engagement policies took effect, email providers including Google, Yahoo!, Microsoft, and AOL began regulating deliverability based on past engagement. This means that if consumers do not regularly open and click on emails sent from businesses, the ESPs may stop delivering emails from that company, and may divert those messages into the spam folder, even if the user has subscribed to the content in the past.

Google, specifically, has made some big adjustments on its own as well. Email billers and marketers were sent into a frenzy when Google announced the introduction of tabs to Gmail inboxes. The objective was to make it easier for users to unclutter their mailboxes by moving certain marketing messages out of their primary inbox and filing them under a Promotions tab.

"We wanted to give our users more control over their inbox," Alex Gawley, product manager with Gmail, said in an interview with Marketing Land in May 2013, when Google first introduced the tabs. After much testing, Google found that people were scanning their inboxes and jumping past certain types of email, such as promotional mailings, "because they weren't ready" to deal with them, Gawley said. Organizing email into various tabs was seen as a way to let users deal with those messages when they were ready. "The reaction [from customers] was really positive,"Gawley said. Email marketers, however, were left frustrated.

Groupon CEO Eric Lefkofsky told Wall Street analysts in November that the company saw a steep drop from the previous quarter in the number of promotional emails opened, and Google was to blame. "Third quarter results were impacted by Q3 seasonality and double-digit declines in email open rates related to the new Gmail Promotions tab that was rolled out earlier in the quarter," he said. "While it hasn't been a huge material effect, it did have an effect on our open rates, and it is part of the story," he added.

A study conducted by marketing services provider Epsilon, which looked at four million sets of emails over a period of seven months, evaluated Gmail's performance in comparison to competing providers Hotmail and Yahoo!, and found that while the three experienced similar open rate patterns throughout the study's duration, including a predicted seasonal downturn around July and August, Google's click rates dropped in June and never recovered.

In June, Gmail's click rate was 4.6 percent while Yahoo!, which had the second highest number of clicks, posted a 4.0 percent rate in the same month. By October, Gmail's click rate was only 75 percent of its June rate, while both Microsoft and Yahoo! recovered stronger; the two posted 87.5 percent and 82.5 percent October over June numbers, respectively, according to the study. Though Gmail ultimately led runner-up Yahoo! by 0.1 percent at the conclusion of the study, the email giant could not regain the 0.6 percent advantage it boasted in April, before the tabs were introduced.

In addition to ESP changes, mobile technology also presents challenges. People are spending more time on their mobile devices than on their desktop computers, leaving marketers concerned that their emails aren't reaching consumers the way they used to. However, this doesn't necessarily mark the death knell of email marketing. "Just because people aren't spending as much time online on their computers doesn't mean they aren't accessing their email," Alex Lustberg, chief marketing officer at Lyris, a digital marketing solutions provider, says. "Email marketing is going mobile, but that doesn't mean it's going away. Mobile is hugely important for email, and it presents an incredible opportunity because companies can reach their subscribers anywhere and any time," he adds. This opportunity, however, comes with new responsibilities.

Marketing Goes Mobile

As user interactions with email become more dynamic and uninhibited by the limitations of a desktop environment, email content must become more dynamic as well. People move through their inboxes quickly, looking only for the information they need and want. Delivering relevant messages that resonate with them is fundamental--that includes live email content that adapts in real time to location, device, time of open, and behaviors.

Among the most popular and effective live content strategies, Lustberg explains, are countdown clocks. "Countdown clocks connect to your customers through immediacy," he says. "By including a live countdown to the end of a sale or other promotion, you're creating a sense of urgency that will inspire your customers to buy at that moment rather than later, or not at all."

Geographic targeting is an important tool to leverage as well, especially if the brand has multiple locations. Personalizing an email based on the recipient's location is a way to create a sense of belonging, Lustberg explains, and to build a community feel around

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