Live from E-mail use up, costs down

(Direct Newsline) New York–The average amount of revenue generated from an online customer grew from $168 in 2001 to $208 in 2002, while the cost to acquire a customer online fell $8, to $30, during the same period, according to a study by the Association for Interactive Marketing (AIM) and Return Path.

The study, which surveyed 110 marketers who perform e-mail campaigns, was released May 7 at the Conference, cosponsored by AIM and the Direct Marketing Association. The conference runs through tomorrow at the New York Hilton.

Some 64% of respondents to the survey reported that e-mail generates revenue primarily by driving transactions. Forty percent said e-mail revenue comes from ads, sponsorships, and banners.

Marketers are fairly conservative when it comes to how often they send e-mail. Nearly 60% contact their customers no more than monthly. A number of them are also enabling their customers to indicate how often they would like to be contacted. Most marketers (76%) use e-mail for promotions, product announcements, and e-newsletters.

While opt-in policies are still the standard for commercial marketers, more respondents appear to be adopting opt-out policies: 57% of respondents use opt-in or double-opt-in methods to acquire customer permission to contact them by e-mail. That’s down from 71% in 2001.

Some 64% of businesses are handling e-mail inhouse. The cost to send an e-mail has stabilized to $0.03-$0.05 per e-mail.

Marketers seemed to contradict themselves on the value of online customers and their respective e-mail addresses. While the average cost to acquire an e-mail address is about $30, and online customers generated more than $200 in revenue, only 50% of marketers were willing to pay more than $1 to get the new address of someone who changed their e-mail address.

Marketers still apportion little of their marketing budgets on managing and maintaining e-mail lists. Sixty-seven percent spend less than $25,000 annually on e-mail database maintenance.