Posted by Jordan McCollum

Forrester Research says that marketers say they see ROI on email marketing that’s two to three times higher than any other form of direct marketing. 66% of marketers agree that email is the most cost-effective marketing tool at their company.

So why shouldn’t you waste money on email marketing?

Because wasting money is bad—and why waste money when you can make sure your email marketing is even more cost effective?

The Forrester study takes a look at the email marketing forecast for the next five years, and there’s good news: email will continue to grow in popularity among users and marketers alike. Total spending on email marketing will soar to $2B in 2014 (up from $1.2B this year):

Of course, this popularity means that there’s a lot more competition for email users’ time—and a lot more messages bombarding them, and likely to be perceived as spam. With more than 9000 messages per inbox annually by 2014, users will become even more discriminating about what they read.

One of the effects of this is that “retention email”—permission-based email messages targeted at keeping customers—will become increasingly important. This will grow to more than 40% of total email messages annually. This effect also highlights how important it is to make sure that your messages are well-targeted and stand out from the crowd.

Forrester offers a few suggestions in this area:

• Embrace relevancy-empowering tactics, specifically segmentation and dynamic content, as we try to do more with less in the current economy. Also look for innovations coming in this area.
• Increase the use of services, social sharing, and data integration. Because of the integration of the social services in the email inbox (creating what Forrester calls the “social inbox”), email marketers may have to do as the Facebookers do. They should also use more “web analytics data, [build] more robust subscriber
  profiles, [use] engagement-based targeting, and [use] share-to-social mechanisms.”
• Make today’s best practices tomorrow’s required practices. In addition to maintaining good, current email lists (see more below), marketers will also see behavior-driven engagement messaging tactics, such as sending unique

  messaging to “clickers” and “non-clickers,” become commonplace. Relevant email marketers and ESPs will see growth.

Also, to further increase the cost-effectiveness of email campaigns, be sure to practice good “list hygiene”—remove bouncing addresses, dedupe, malformed addresses, etc. By 2014 companies will be wasting up to $144M on email messages that never reach consumers’ mailboxes. Forrester also recommends sender- and message-level authentication and reputation services to make sure your messages aren’t accidentally caught in ISPs’ spam filters.

What do you think? Do you use email marketing? Do you think its future is looking bright?

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About the Author: Jordan McCollum is a staff writer for the popular marketing blog Marketing Pilgrim. She has worked in search engine optimization with clients including 3M, Little Giant Ladders and ADP. After graduating from Brigham Young University, Jordan joined the SEO copywriting team at the Internet marketing firm 10x Marketing. After 10x closed its doors in December 2006, Jordan became a freelance writer and Internet marketing consultant specializing in SEO. She also has extensive experience with web analytics, conversion rate enhancement and e-mail marketing.