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The best in email marketing

Forrester Research has identified the some of the best vendors in email marketing and predicts future trends for this evolving market segment.

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The email marketing landscape is cluttered with a hodgepodge of offerings -- from best-of-breed technology vendors to outsourcers -- and it's difficult to discern which providers are best at what.

In fact, it makes selecting the right provider a daunting challenge. So Forrester Research, a Cambridge, Mass.-based research firm, recently completed an evaluation of nine of the 41 email marketing services companies it identified. But the results may not be as cut and dried as email marketing decision-makers might like.

"One of the challenges in this type of evaluation is in this particular space, so many vendors do the same thing," said Shar VanBoskirk, analyst and author of the report. "It comes down to fit. How does it fit with the culture of your organization?"

For example, services-based businesses often use a very different approach to email marketing than product-based businesses. According to VanBoskirk, the best first evaluation step is for a business to determine if it is looking for software, a self-service application service provider or an agency. Then, companies should consider what email marketing function is most important to their business, whether it's data management or setting up campaigns. @17667

While VanBoskirk found that many of the providers offer the same functionality and describe themselves in the same way, Forrester was able to identify some leaders in the market. Redwood City, Calif.-based Responsys Inc., which recently overhauled its platform and corporate strategy, was named a leader for its interface, dynamic content, reporting and integration capabilities. It's well suited for midmarket companies that are running sophisticated email programs, according to the report.

New York-based Epsilon Interactive, formerly Bigfoot Interactive, was also named a leader. The report says it has the most scalable platform and competitive features set, making it a solid choice for large companies running high-volume, dynamic campaigns.

Digital Impact Inc., an enterprise-level email marketing agency based in San Mateo, Calif., and Harte-Hanks Postfuture, the email arm of database marketing giant Harte-Hanks Inc. in San Antonio, were both named leaders as well.

E-mail alive and well

While the vendor landscape remains confusing and complicated, the report does offer some good news for email marketers in the short term. Despite the rise of Really Simple Syndication (RSS), podcasts, blogs and other news media, email will continue to be an important way of delivering marketing material. In fact, according to the report, email is second only to search in companies' online marketing budgets today, with 80% of marketers using piloting or planning email marketing programs, and 88% expecting email effectiveness to increase in the next three years.

"Email spending will continue to increase, but the places where people are spending will change," VanBoskirk said. "We'll see a shift in spending on delivery and an increase on integration, such as coordinating online with direct mail. Email will grow until 2007 and then plateau. That's when marketers will stop with high-volume campaigns and learn less is more and more targeted is better."

As email marketing matures so too will the email marketing market. There will always be room for a basic email delivery tool with one message and little segmentation, VanBoskirk predicts. On the other end of the spectrum will be tools that accommodate high-volume, highly dynamic campaigns with customized messages.

"I don't think we'll see a lot of folks in the middle," she said. "Marketers can't be competitive in the middle. There will always be a class of blast out messages -- everyone else will have to move to more advanced capabilities."

A recent survey of 2,528 email users in the U.S. conducted by Quris Inc., an email application vendor in Denver, found that there is still a significant gap between what kind of email customers want from a company and what companies are actually sending. However, the types of email that are most popular with customers -- transaction confirmations, account statements and email coupons -- are being sent more often. When asked which of three types of permission-based emails work best, purchase and shipping confirmation messages ranked highest with 56% of respondents placing them at the top of the list, followed by electronic statements and account information with 50% each.

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Good forward-facing article. Thanks for sharing.