According to a new study by the Direct Marketing Association, and as reported in DIRECT, email marketing delivers the highest ROI of all media available to marketers. Having just finished reading a pre-release version of WOMMA president Andy Sernovitz’ new book – Word of Mouth Marketing: How Smart Companies Get People Talking – he would probably argue that word of mouth marketing would have the highest ROI as you can get that going with no investments.
The DMA research shows that the return on email marketing in 2005 was $57.25 for every dollar spent, compared to $7.09 for catalog marketing and $22.52 for non-email Internet marketing. The study also projects that all the ROI’s for the different media marketing options are headed down-ward.
The same research also estimates that the commercial email market in the US was $16.5B in 2005, while the direct marketing-driven sales hit $1.806 trillion in 2005 – projected to hit $2.627 trillion in 2011!
Ouch…that sounds like a lot of wasted dollars…there should be better ways to reach people. And no matter what Set Godin says about messaging frequency vs. “being full ,” there ought to be better solutions out there to resolve the ambient findability problem in marketing!
The DIRECT article did not mention anything about the methodology used by DMA – but it is assumed that the study looked at investments vs. “new” customers and “new” revenues – which is a really bad transaction-based metric in marketing.
A more interesting metric would have been to understand how email direct marketing impacts long term customer-relationship-based revenue streams for companies. Isn’t that where the real profitability lies?
MARKETING – it’s not the transaction anymore, it’s the relationship, dummy!