JupiterResearch Sends a Message to Email Service Providers

In its recent release of the "Email Marketing Buyer's Guide, 2008," JupiterResearch examines how marketing executives view email and the challenges they continue to face. Deliverability and overall costs continue to be top concerns for buyers; but as the market demands increasing sophistication, email service providers (ESPs) are expected to keep up. Vendors were grouped into three categories: full service; enterprise; and small and midsize business markets. According to the report, 70 percent of the 630 email marketers surveyed ranked "deliverability [of] features and services" as the "most important" factor when evaluating ESPs. (This sentiment is in accord with the 80 percent who ranked "usability" as the "most important" basic feature to be offered by their ESPs. Usability, as defined by JupiterResearch, refers to ease of use and the ability to automate routine tasks.) Among other evaluation factors, "overall cost of service" was a close second, cited by 69 percent of respondents; only 62 percent believed vendor reputation -- which, in previous years, had been the top consideration -- was most important. Though the ranking of reputation may have dropped from first to third, JupiterResearch still recognizes it as an important consideration in a buyer's decision. Email marketers need to do their research before investing in an ESP, conducting independent analysis and speaking with a potential vendor's existing or past clients, the report states. At least one vendor suggests that buyers ought to beware cutting corners: "Marketers are misguided for making deliverability and cost their key criteria for making a decision," says Scott Olrich, chief marketing officer of Responsys, a provider of B2B and B2C marketing solutions. He argues that email marketing isn't just about getting the message to the inbox, it's about ensuring that that message is highly relevant, targeted, and if possible, automated -- that, he says, is where the high returns will come from. While ESPs are geared to help with successful email marketing deliverability, Jupiter's report states that the root of the problem begins with an organization's "poor list-hygiene practices." Therefore, marketers should focus more on infrastructure improvements (such as authentication) as well as list-quality strategies that will reduce customer churn. One major problem facing ESPs is the lack of standardization in terms of authentication schemes, such as DomainKeys Identified Mail (DKIM) and Sender ID, the report states. Moreover, as the market continues to push for mobile functionality, ESPs will find themselves hard-pressed to effectively translate and synchronize email to mobile devices. ESPs are constantly working with internet service providers to ensure they're doing the right thing and following the best practices. These challenges will remain whether vendors stick with traditional email or move to mobile, says J.D. Peterson, product marketing manager at Lyris, a provider of Internet marketing solutions. Of the advanced features, 61 percent of email marketers revealed that analytics and reporting was of utmost importance, followed by segmentation (57 percent). Segmentation capabilities, bounce management tools, triggering, and integration with other applications appeared for the first time this year among the top 10 applications email marketers were most interested in. This, the report states, reflects the growing sophistication of the market. "The successful marketers in 2008 are really the ones that most closely align email with their other marketing elements and activities," Peterson says. He adds that marketers need to treat "email not as a siloed application but [as part of] an integrated marketing platform." While frequency caps, testing, and image hosting are some features that have become basic to any email marketing program, many ESPs have yet to include basic email marketing features as part of the standard package. Peterson says that Lyris addressed this problem by stripping its service down to one standard package based on insight derived from user demands, and offering advanced features that can be added for the more sophisticated subset. Jupiter's report warns marketers against taking a one-size-fits-all approach, suggesting that they not be swayed by the flashiness of advanced email features when the goal is to address a particular set of needs. Not surprisingly, Peterson disagrees: "Specifically for the small and midsize businesses," he says, "having one system that addresses the [majority] of their needs is something they find significant value in." JupiterResearch's assessments, with the ESPs in each segment ranked in descending order based on low, medium, or high market suitability and overall business value):

Market leaders in the "full service" segment:
• e-Dialog (which was recently acquired by GSI Commerce);
• CheetahMail;
• Epsilon;
• Click Tactics; and
• Acxiom Digital.
Market leaders in the large enterprise segment:
• Responsys;
• Silverpop;
• ExactTarget;
• Yesmail;
• Datran Media; and
• Alterian (which was named one of CRM magazine's Rising Stars in 2007).
Market leaders in the small and midsize businesses segment:
• EmailLabs;
• SubscriberMail; and
• iPost.

Related articles: Email Marketing to Reach $2.1 Billion by 2012 Email is still -- and will continue to be -- a favorite channel for marketers, according to a new report. Forrester Evaluates Top Email VendorsEmail continues to play a strong role in marketing campaigns, but improvements are still in high demand. Is November (Unofficially) Email Marketing Month? CRM vendors flock to high-capacity online promotional capabilities. 8 Email Marketing TipsExperts provide commonsense advice about 'one of the most powerful and yet one of the most dangerous mediums of communication.' What Are Best Practices for Effective Email Marketing Fixing slow response times and keeping message content brief and to the point are two of several ways to effectively manage customer service email. Enhance Your CRM Strategy With Targeted Email Marketing 5 guidelines to abide by when choosing to integrate email into your CRM suite. Best Practices: Subscribing To Smooth Email Marketing Retailers are toiling to make their email subscription procedures easy, quick, and more transparent; subscription incentives seem to be slipping in popularity. Steps to Successful Email Marketing Ensuring your outbound marketing message reaches its targets. Feature: The 2007 Market Awards: Rising Stars United Kingdom-based Alterian is one of those companies zeroing in on integrated marketing strategies -- but the trick is getting customers to take the plunge. GSI Commerce Acquires e-Dialog E-commerce company GSI Commerce announced Thursday that it will acquire the email marketing firm e-Dialog for $157 million.

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