Brand marketers today have many ways to connect with consumers and audiences, but email marketing is still one of the most efficient ways to target, engage, and drive conversions.
Though the channel has endured, consumers’ expectations are changing. For starters, it’s no longer enough to call an email “personalized” just because it includes the recipient’s first name. Consumers want content that’s catered to them and knows their patterns and history. Consumers are often frustrated by email promotions that feature a product they’ve already purchased or product recommendations that don’t align with their interests.
Of course, data collection is essential for a successful, personalized email strategy, but even that is changing, making targeting increasingly difficult.
In this guide, we outline the current state of email marketing, the importance of personalization, and how new opportunities like AI can elevate your strategy.
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The state of email marketing
Consumers receive an enormous amount of emails each day. During the first half of 2023, more than 10.5 billion marketing emails, 62 million SMS messages, and 129 million web push messages were sent worldwide by Omnisend merchants, according to eMarketer’s Industry KPIs. While open rates were close to 25% (24.38%), conversion rates from the messages sent were just 0.07%.
Following the pandemic-induced shift to ecommerce, more marketers began using AI to automate their email marketing. In February 2023, 63% of marketing professionals named email automation as the top marketing trend included in their plans, per an Ascend2 report. However, as the total number of emails soared thanks to the ease brought by automation, email conversion rates have decreased.
Now, with so many emails flooding consumers’ inboxes, it’s harder for marketers to stand out. To encourage opens, as well as clicks—and ultimately, conversions—email marketing needs to have a clear value exchange.
In fact, 34% of US internet users ignore or delete brand emails without reading them about half the time, per an Airship survey conducted by Sapio Research. One-third of respondents say they often don’t open emails at all, while another 15% say they always hit delete without bothering to read the message.
Despite this, marketers in 2023 spent $629.9 million on email advertising, per eMarketer’s October 2023 forecast. And although conversion is low, email ad spend is expected to consistently increase through 2027.
Why B2B and B2C marketers rely on email
US marketers use a diverse mix of media channels to reach consumers. Although social and TV (38%) combined make up the bulk of marketers’ advertising budgets, digital (14%) and email (12%) account for a sizable portion of annual spend, according to March 2023 Quad research.
Email is essential for both B2B and B2C marketers. It’s highly reliable, easily controllable, and can be delivered to anyone with an email address. Between April 2022 and April 2023, 62% of US B2B and B2C marketers increased their email marketing budget, SeQuel Response and ISG found.
B2C marketers rely on email to communicate with existing and potential customers. In ecommerce, email is essential for order confirmations, shipping alerts, and customer retention tactics like cart abandonment notices.
Email is also effective for discount and promotional offers. MessageGears found that over half (51%) of US digital shoppers most prefer to receive discount offers by email, far outpacing other methods such as in-app notifications, SMS, and push notifications.
For B2B marketers, email is a staple for communication and education pre- and post-sale, as well as managing existing client relationships. Forty-three percent of US B2B marketers believe email is the marketing channel that contributes most to achieving top-of-funnel goals, per April 2023 Ascend2 data.
But now that B2B buyers are younger and digital-first, they have higher expectations for email. Today’s B2B buyers expect email communication to be relevant, or it will be ignored. Similar to B2C, buyers won’t bother to engage if the email doesn’t provide value or useful information.
Using data to unlock email marketing personalization and segmentation
Nearly two-thirds (65%) of marketers worldwide believe personalized emails have the most impact, according to a January 2023 Ascend2 report. To be impactful, marketing emails must go beyond superficial personalization (like including a name in the email subject line) to provide the right message, at the right time, and with an authentic brand voice to your target audience.
Organizations are increasingly using customer data to create more relevant and personalized email marketing promotions for their customers.
Targeted promotions aren’t new, but the growing adoption and demand for them is. Increasingly, brands are discovering that, when they don’t personalize offers, they may be eroding brand trust while also wasting promotional dollars. In addition, personalization can help drive customer loyalty.
Without the proper cadence in mind when sending out email promotions, companies can create a negative customer experience (CX). Accordingly, brands are getting more sophisticated about when they reach out to customers with a promotion.
Over the next few years, “true” personalization within email marketing will go from advantageous to mandatory. In order to make this happen, brands will need to get more sophisticated at data collection, not to mention adopt more agile processes and automation to get emails out faster. Greater efficiencies on the whole will allow the typical email marketer to invest that saved time into a bigger emphasis on personalization.
Other email tactics marketers need to embrace
As vital as email personalization is, it’s not the only factor. CX, relevancy, privacy protection, and measurement are also important components of an email strategy.
Email should be mobile-first
With smartphone use increasing and time spent shifting from desktop and tablet, a mobile-friendly email design is a program tactic 56% of marketers worldwide are planning to apply, according to July 2023 Ascend2 data.
Without a mobile-optimized design that resonates with the intended audience, email marketers risk damaging CX and may lessen the chance of a recipient taking action.
Using AI responsibly
Protecting email users’ data privacy (39%) from spam messages and phishing attempts is also top of mind, Ascend2 found. Email marketing has also been a hotbed for AI use this year.
AI’s use in email marketing has nearly doubled between 2022 (16%) and 2023 (30%), as more marketers turn to the technology for content creation, like personalizing subject lines and drafting body copy. However, email has long been a scam-prone format, and AI is making scamming easier.
Although the majority of AI-generated posts are easy to spot, scammers approach writing convincing copy and organizing user data in the same way most email marketers do. As AI-generated spam grows and slips by platform filters undetected, marketers will need to keep data security features up to date.
- Personalization: In addition to customizing content, AI can segment audiences, choose optimal send times based on recipients’ preferences, and analyze their behavior and actions. Marketers can then use the insights gathered to make future campaigns more relevant, timely, and engaging.
- Reengagement: AI can be used to identify customers at varying stages of a purchase in real time. This information can be used to send specific, targeted messages to boost conversions and retention rates.
- Email list health: AI can help marketers keep lists updated, correct, and clean by performing email validation, manage auto-replies, and detect deliverable issues that may impact a campaign’s success rate.
While these AI use cases are relatively safe, oversight is still required. Marketers should carefully review copy and user groups created by AI tools to ensure quality, efficacy, accuracy, and avoid embarrassing mishaps.
How email marketing measurement is changing
Marketers struggle to measure email performance and ROI.
Nearly 50% of US marketing professionals consider measuring performance and ROI to be a significant challenge, per July 2022 data from Ascend2 and OMI. Indeed, a Nielsen survey found that 21% of marketing professionals worldwide have low confidence in their email strategy’s ROI measurement.
Apple’s Mail Privacy Protection, for instance, has made email ROI more difficult to determine. In its latest system update this September, Apple iOS 17 automatically removes some tracking parameters from URLs. This feature, referred to as Advanced Tracking and Fingerprinting Protection, extends to links shared through the Mail app.
The removal of tracking parameters should not affect click tracking by email service providers or email marketers. However, at an individual level, click data may be disrupted, which could impact email marketers’ personalization and list filtration efforts.
Common types of email marketing messages:
- Welcome emails: When a new consumer signs up, subscribes, or creates an account for a brand’s goods or services, a welcome email can be deployed. Welcome emails are important as they’re often the consumer’s first impression and introduce the brand’s attributes alongside other helpful information.
- Promotional emails: A promotional email is used to alert subscribed consumers to exclusive sales. The email will often highlight goods or services on offer, the dates of the promotion, and may include a discount code. Promotional emails are also used to encourage event attendance, such as webinars, concerts, and other special events.
- Loyalty program emails: Often sent out to new, lapsed, or frequent consumers to encourage loyalty program participation, loyalty emails outline the program’s attributes to increase sign ups, and may offer an introductory discount offer. Once established as a loyalty program member, emails can be sent periodically to encourage use of points or other perks, like free birthday gifts.
- Product update emails: Used to announce a product update to email subscribers who may have purchased the item previously or have expressed an interest. Common product update emails include back-in-stock alerts, new colors and sizing, or general improvements based on consumer feedback.
- Confirmation emails: An email deployed post-purchase to confirm that the transaction is complete. Confirmation emails often include the order number, purchase details, and a method to track delivery.
- Cart emails: Notification emails that remind a consumer of items left unpurchased in their shopping cart. Cart emails aim to encourage consumers to complete their purchase, and may include a discount alongside the reminder.
- Lead-nurturing emails: A lead-nurturing email is sent to recipients who have expressed interest in a product or service but have not yet made a purchase. These emails continue the conversation to build a relationship, and may eventually lead to a conversion.
- Seasonal emails: Emails sent to mark an occasion, such as a shopping season like back to school or specific holidays like Mother’s Day. Seasonal emails often include curated product recommendations and alert recipients to deals and discounts.
- Email newsletters: A subject matter-focused email sent to subscribers periodically. Email newsletters may include content pieces such as news, tips, product suggestions, and other information relevant to the audience and their interests.
- Unsolicited email/spam: Akin to physical junk mail, these messages are irrelevant to the recipient or from senders with nefarious intentions.
Common email marketing KPIs:
- Email bounce rate: The percentage of sent emails that were not successfully delivered to the recipients’ inboxes
- Email campaign conversion rates: The email campaign conversion rate is calculated by the number or orders placed divided by the number of emails delivered
- Email click rates: The percentage of email recipients who click on one or more links contained within an email message
- Email click-to-open rates: The number of unique clicks to unique opens
- Email conversion rates: Email conversion rates are calculated by dividing total orders by total emails sent
- Email open rates: The number of opens divided by the number of emails delivered
- Email spam rates: The percentage of recipients who mark an email as spam or report it as unsolicited or unwanted
- Email unsubscribe rates: The percentage of email recipients who choose to opt out or unsubscribe from an email list