Email is STILL the most effective online marketing tool By Mike Alvero | Posted May 1st, 2008
Email marketing always gets a bad press… but a new study proves it’s actually the most effective and efficient marketing tool available to online entrepreneurs.
Sure, spam is still as problematic as ever. But if you’ve got a targeted list of opt-in subscribers and a message they want to hear, email marketing can be incredibly powerful!
A new survey by Forrester Research and Shop.org says email marketing messages sent to in-house subscriber lists provide the highest return on investment of any type of e-marketing activity.
The report says the average value of a sale generated by email marketing to in-house lists is $120.27. At the same time, the average cost of making that sale is only $6.85.
So the Return On Advertising Spend (ROAS) is 17.56, which means the average value of a sale made through email marketing is 17.56 times more than the amount it cost a business to make the sale.
ROAS is calculated by dividing the sale value (dollars earned) by the amount spent on corresponding advertising (dollars spent). Any value higher than 1 represents a positive return on investment.
So, 17.56 is a pretty impressive figure!
But remember, this only refers to email marketing using in-house subscriber lists. In other words, people who’ve actively asked you to contact them, not random email addresses you got from a rented list.
The survey says search engine optimization is the second most effective e-marketing tool, with an ROAS of 12.71.
However, I think this is much more difficult to measure — because it’s harder to attribute a sale to general SEO marketing than a specific email campaign.
Nevertheless, it emphasizes the importance of a top organic search ranking.
In third place is affiliate marketing, which can be easily measured. It has an ROAS of 10.01.
Bottom of the pile — rather predictably — is banner advertising, which has an ROAS of just 1.58.
So, as we’ve always said at IMC, email marketing works! It just needs to be used with a targeted list of subscribers who are interested in what you’ve got to say.
For more information on the report and these statistics, click here.
And if you’ve been neglecting your email marketing for newer, sexier strategies — get back on it!
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