The amount of research supporting the effectiveness of online marketing is staggering yet many business owners are still unconvinced or just inadequately informed. If you are seriously looking for reasons to justify spending marketing dollars online, here are a few facts and trends to ponder:

Although most marketers allocate minuscule amounts of their budgets to their email efforts, the channel continues to deliver substantial returns on every dollar spent. According to the Direct Marketing Association, marketers spent $500 million on email in 2007 to capture an astronomical $23 billion in sales – yes, $23 billion in sales; that's not a typo.

The DMA forecasts:

  • During 2008 marketers will spend $600 million on email to drive $27 billion in sales; and
  • Email delivered $48.56 in sales for every dollar spent in 2007. A substantial return is also predicted for 2008; $45.65 for every dollar spent. More from the DMA is available here.)

The results are in. The success of online marketing is supported by reliable research reports and marketing pros have taken notice. In McKinsey's July 2007 global survey of marketers, more respondents used email than any other form of digital advertising. Some people still don't understand the value but those that do are moving online across the spectrum of marketing activities, from building awareness to after-sales service. They see online tools as an important and effective component of their marketing strategies

McKinsey survey of marketing executives reports that:

Respondents consider online ads to be as useful for brand building as for direct response. Spending is expected to increase on all types of online advertising vehicles over the next three years.

In addition to established online tools such as email, information-rich websites, and display advertising, survey respondents show a lot of interest in the interactive and collaborative technologies collectively known as Web 2.0 for advertising, product development, and customer service. (Reference: How companies are marketing online: A McKinsey Global Survey)

But that's not all – others predict much higher online spending. According to a report from Jupiter Research’s lead email analyst David Daniels, spending for email marketing will go from $1.2 billion in 2007 to $2.1 billion in 2012. And Forrester Research predicts much higher numbers; they predict spending on email marketing will increase from $2.7 billion in 2007 to $4 billion in 2012.

One thing to note, the DMA figures for 2007-2008 have dropped from $51.58 the online mavericks garnered for every dollar spent in 2006. There are several possible reasons for the drop but one stands out – marketers are investing in email faster than they are creating new revenue from it. Why?

There are several reasons. Here are a few pointed out by our friends at Email Marketing Reports

According to John Rizzi, president of eDialog, companies are increasingly spending more on indirect and non-revenue generating emails, such as order confirmations and “thank you” messages. However, just because they don’t drive immediate revenue doesn’t mean they don’t drive it at all, he said.“These types of messages cost money to send and it’s hard to measure their ROI, but there is no doubt they have a positive effect,” he said.

“Email ROI is declining the way Bill Gates is not getting as rich as he used to,” quipped Peter Johnson, research strategy and platforms vice president for the DMA, during a presentation of the findings.

There is plenty more but I won't go on. The important question now is how do you take advantage of these trends? If you would like more info, please feel free to contact AIM Custom Media and we'll be glad to help you create online marketing campaigns that accelerate your ROI.

PS: For those that love to read, here's the link to purchase a comprehensive report on email marketing – MarketingSherpa's Email Marketing Benchmark Guide 2008

  • Results from in-depth survey of 1,210 marketers with hands-on email experience
  • 328 pages that include 260 charts, 12 images and 9 new eyetracking heatmaps
  • 4 new special reports