South African marketers are wasting 20% of the R500 million they spend annually on e-mail and digital direct marketing, according to a study done by the Direct Marketing Association.
Titled the “Bulk Email Deliverability Report SA 2011”, the report was released today by the DMA and its research partners, TouchBasePro and E-mail Connection, saying that R500 million was spent on e-mail and digital direct marketing in 2009.
However, significant wastage occurs because many of the messages they send never reach the intended recipient.
This, according to the report, is because the biggest cause of non-delivery is a poor domain name reputation that causes the e-mails of companies flouting best practices to be filtered before they reach recipients.
Brian Mdluli, DMA CEO, says: “At a time when marketing budgets have been slashed to the bone, it is unforgivable that any amount of marketing spend is unaccounted for, by any means.”
Cordell Brewer, director of TouchBasePro, notes: “It is open to question whether each e-mail marketing rand is working as hard for South African companies as it could. This is regrettable, because the problem is relatively easy to fix through responsible e-mail and Internet practices.”
Brewer says digital sender reputation is based on the mailing practices of the sender and feedback from the mail recipients. Sender reputation has superseded content filtering as the biggest factor that determines whether a message gets through ISPs' filters to the recipient.
Statistics for the US, Europe and Asia regions from Return Path's "Global Email Deliverability Benchmark Report, 2H 2009", show that between 14% and 20% of e-mail marketing messages never make it to the intended inbox.
"There is every reason to believe that these international trends hold true in SA as well, meaning that millions of rands are wasted on non-delivered messages each year," Brewer says.
Deliverable question
E-mail deliverability is one of the key questions marketers should be looking at in a world where return on investment (ROI) matters more than ever before.
Brewer pointed out that e-mail marketing is steadily growing in importance as an engagement driver for SA's direct marketing industry. E-mail marketing accounts for 3.34% of direct marketing budgets, says the DMA.
He says the traditional direct marketing by post still accounts for the majority of the budget direct marketing companies spend, followed by telemarketing and then SMS to mobile phones, with e-mail receiving the least in terms of spend.
"This relatively low contribution to direct marketing spend is partially due to the low cost of e-mail marketing. When marketing budgets are tight, low costs are good," he added. "But there are still too many companies whose e-mail strategy is characterised by high-frequency, low-value and lack of segmentation. This approach often leads to poor ROI and deliverability."
Many e-mail marketers in SA have been lax about adopting best practices for e-mail marketing, because of the country's relatively relaxed direct and electronic marketing laws. But this picture is changing rapidly and marketers need to prepare for a swarm of new laws and regulations.
“But even so, many top brands are not following the best practices that will safeguard their sender reputations,” says Brewer. “A company can achieve a good reputation by selecting a credible technology partner that can help it to navigate the e-mail marketing environment.”
He says that, by following best practices like welcome messages and efficient opt-out procedures, appropriate permission levels, as well as avoiding spam-like behaviour (unwanted or unsolicited commercial mailing), companies can safeguard their reputations and enhance deliverability of their mails.
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