Rethinking Email: The Next Frontier of Email Marketing Technology
:: By Dan Roy, MessageGears ::
Email has been around for decades, but marketers are facing new challenges as send volumes routinely rise into the millions each month and the demand for real-time communication increases.
At these high volumes, the need for personalization and segmentation is even more important, but more personalization usually means more delays—the opposite of what marketers need in a real-time marketing world.
To find out how marketers are using technology to address today’s email marketing challenges, a survey was conducted with our company and The Relevancy Group of more than 300 marketers of mid-market and enterprise companies with 1,000-plus employees. Most of the participants in the survey send between 10 and 50 million email marketing messages monthly, but over 20 percent send more than 100 million.
Below is a look into what our survey reveals about how top global brands are using email marketing technology now, what issues they are encountering with current technology infrastructures, as well as a glimpse into what technology is best poised to help marketers meet the send volumes and real-time marketing demands of the future.
What email technology is most popular now?
Marketers were asked what type(s) of technology they use today, and the data reveals that 20 percent of organizations utilize more than one solution for email marketing. Below are the top email technology infrastructures that are most popular now.
Software-as-a-Service or Hosted ESP
Software-as-a-service (SaaS) is software that is licensed and hosted by a vendor and is made available to customers on a subscription basis. These email service provider (ESP) applications are hosted in a cloud and are accessed via a Web interface. At 46.2 percent, marketers reporter SaaS as the most widely used technology infrastructure in use today for email marketing. Over 80 percent of respondents from the automotive industry utilize a SaaS solution, and at least half of media, real estate, retail and travel industries also use SaaS. Of the marketers that send over 100 million messages per month, 57 percent use a SaaS solution.
Commercial On-Premises ESP
Software that is installed directly on a local server inside a company’s own network is defined as a commercial on-premises ESP. At 39.2 percent, commercial on-premises systems rank as the second most popular technology infrastructure. Industries that most utilize on-premises software include manufacturing, government, telecomm, pharmaceuticals, and technology. While marketers who manage send volumes over 100 million messages a month seem to favor SaaS, marketers with lower volumes seem to favor on-premises systems.
Custom Homegrown Email Marketing
Custom, homegrown email solutions are developed and maintained internally by I.T. resources. Only 28.2 percent of marketers reported using this type of infrastructure likely due to the amount of internal resources required to create and maintain a custom, homegrown solution. Entertainment, consumer products, real estate, technology and financial services are the industries that most frequently use custom, homegrown solutions.
Hybrid Email Marketing
A relatively new addition to the mix is hybrid email marketing. There are multiple forms of hybrid email marketing. Hybrid email marketing may feature a combination of any of the above technologies, such as a custom, homegrown solution mixed with some SaaS elements; however, the hybrid email marketing model gaining in popularity is the combination of an on-premises system with a cloud platform. By combining these two platforms, marketers are able to store sensitive customer data in a centralized, in-house database that reside behind a company firewall, while selectively making use of cloud applications to handle tasks that do not require data to be stored in the cloud. Currently, due to the newness of this model, only 18.3 percent of marketers report using a hybrid solution.
What are the top email performance challenges?
When asked how satisfied companies were with various aspects of their email marketing program, most respondents were fairly satisfied with their email marketing vendor technology but less satisfied with the ease of data utilization. Twenty percent said they were either “very dissatisfied” with the ease of data integration or were “somewhat dissatisfied.” Mid-market companies were less satisfied overall than enterprise, which signals that they may need to graduate from or upgrade their existing tools.
Thirty percent of marketers said their biggest email performance challenge is not being able to leverage all of their marketing data. Years of fragmented marketing have resulted in companies having data silos that represent an incomplete view of customers. The high adoption of SaaS platforms, whether for e-commerce, email, content management or analytics, has set up businesses to store and manage data in multiple locations. With every new platform, a new database must be created that updates independently and allows little flexibility in the way data is structured. Enterprise companies also struggle with feeling that IT is too involved, and they don’t like replicating their data. Mid-markets feel that the entire process between the vendor and their team takes too long and their vendor requires too much custom work (and charges for it).
What’s the email technology of the future?
Overcoming the data integration challenges plaguing today’s marketers means a shift not just in the way departments coordinate, but also in the way they collect and store data. A key to breaking through the challenges above is consolidating and centralizing data internally. This usually requires a custom, homegrown email solution that is managed and maintained internally or a hybrid email marketing solution that allows core functionality to be maintained in the cloud while accessing data from a centralized location.
Consolidating data gives all key stakeholders in your organization a unified, global view of customers, which helps you provide a seamless, consistent real-time experience no matter where customers interact with you, be it email, mobile, in-store, social media, Web, etc. This helps break down silos and gives your entire team access to more information about your customers. From the data, it appears that enterprise organizations are moving towards this goal faster than mid-market companies. The companies that centralize their data are best poised to meet the send volumes and real-time marketing demands of the future.
About the Author
Dan Roy is CEO and co-founder of MessageGears (www.messagegears.com). Dan has more than 25 years of experience in enterprise technology, with an emphasis in enterprise email marketing software and services.