ROI for Email Marketing Dips (but still dominates)

Figures from the Direct Marketing Association (DMA) show that ROI from email marketing dipped from previous years, but still yields just under $50 USD per every dollar spent.

“…The DMA forecasts marketers will spend $600 million on e-mail to drive $27 billion in sales in 2008.

The group calculated that by the end of 2007, e-mail will have delivered $48.56 in sales for every dollar spent, and $45.65 for every dollar spent in 2008.

The figures are a serious drop from the $57.25 the DMA said e-mail returned for every dollar in 2005, and $51.58 the channel reportedly returned for every dollar spent in 2006…”

The dip makes sense, as more and more email marketers are using the channel for non-revenue generating communication. Commercial email marketing isn’t used solely for promotional campaigns anymore. More and more practitioners are using the medium to build and sustain relationships with customers and prospects. If you factor out all of those non-revenue-generating emails (double opt-ins, order confirmations, added-value messages, etc.), the figures would change.

It is difficult to measure the ROI for investments in building good relationships – which in the long run are more valuable than the immediate and measurable gains associated with direct marketing efforts.

For more information about the DMA’s Power of Direct Marketing Economic-Impact Study, read E-mail ROI Still a Stunner, But Diminishing: DMA

Thanks to Mark Brownlow for pointing us to this report. For his take on measuring success in email marketing, read Email success measures: the good, the bad and the irrelevant