Sunday, August 5, 2001

A Look at the E-mail Marketing Sector

In a new report released this week, e-Mail Marketing: Relevancy, Retention, and ROI, Aberdeen Group explores the future direction of the e-mail marketing sector -- a market Aberdeen projects will exceed $1 billion by 2003. Technology suppliers of the "killer app" in the e-Marketing space will face accelerated consolidation in the next 12 to 18 months, and the explosive growth achieved during the past year will begin to moderate.

"As marketers have begun to embrace e-mail marketing technology and services, the market has finally displayed the growth that most leaders in the space have been accurately predicting for years," commented Aberdeen Research Director, Kent Allen, "the next stage of strong growth will see increasingly sophisticated online marketers looking for more complete offerings that allow them to take their e-mail marketing initiatives to the next level -- and that means increased sector consolidation."

e-Mail marketing has rapidly become a cornerstone of Marketing Automation (MA), one of the primary and fastest-growing segments of Customer Relationship Management (CRM). From 1999 to 2000, e-mail marketing grew by more than 270% and has emerged as the killer application for marketing. Aberdeen research indicates that e-mail marketing will continue to grow through 2003, based on its simplicity, cost-effectiveness, and ability to retain and cultivate long-term customer relationships.

At the same time, suppliers of technology designed to enable marketers to create ongoing dialogues of value with customers will experience accelerated merger and acquisitions. "The M&A activity we have seen recently is related, in part, to the slowdown in advertising and marketing expenditures, but the real driver [of the M&A activity] is tied to the lack of financing available from the usual suspects," Allen stated. "Some of the companies that will be acquired in the coming months have actually been seeing business pick up nicely but need an infusion of funding ? [that funding] is beginning to materialize from e-Marketing companies that have weathered the recent downturn and are now positioning themselves to be the marketing platform of choice when the dust settles."