With an increasing variety of media competing for a share of ever-tightening marketing budgets, companies must closely monitor the return on investment (ROI) generated by each channel. Only then can they be sure that they are correctly targeting their marketing spend. Investment in direct marketing remains healthy, with an IPA/BDO Bellwether survey recording a 2.5 percent increase in spending on direct marketing in the 3 months to June 2011 against a backdrop of falling marketing budgets.
The continued popularity of direct marketing is easy to understand, as it drives around £205 billion of sales in the U.K. each year, according to the Marketing Gap Report produced by the Direct Marketing Association (DMA). Of the direct marketing channels, email is by far the most popular form of contact among existing customers, according to a study carried out by Acxiom in July 2011. A massive 78 percent of respondents welcomed contact by email from companies with whom they have an ongoing relationship. This compares to 71 percent of existing customers who were happy to receive communication via printed direct mail, 9 percent by text messaging and 4 percent through social media. A majority of prospective customers are also willing to receive communication by email, with 52 percent of respondents happy to accept this form of contact. In comparison, 57 percent of prospective customers are willing to accept contact by printed direct mail, 6 percent by social media and 4 percent by text messaging.
The popularity of email marketing among consumers is good news for business, as it is currently one of the most profitable marketing channels. The first BIA/Kelsey Local Commerce Monitor study for the U.K. reveals that email marketing delivers a robust ROI. Of the 308 small and medium-sized businesses surveyed, 16 percent reported an ROI of 10 to 19 times the money spent on the campaign, with 12 percent reporting an ROI of 20 times or more the initial spend. Email outperforms social media sites, such as Facebook and Twitter, for those businesses that understand the ROI they receive from these channels. It is also worth noting that more businesses struggled to quantify the ROI on social media than on any other online channel. The poorest performing online channel was pay-per-click, where 23 percent of respondents reported that the return was less than the amount spent.
In a Nutshell…
With the healthy ROI delivered by email marketing and its popularity among consumers, it’s easy to see why email marketing remains the number one marketing channel in the U.K. According to eCircle’s European Social Media and Email Marketing study, two-thirds of the U.K.’s marketing decision makers prefer email marketing above all other channels.