US users braced for boom in marketing email

US consumers can expect to be bombarded with more than 200 billion marketing emails by 2004.

Analyst Forrester Research predicts that the rise of such marketing will also boost the presence of email service bureaus which specialise in broadcasting messages on behalf of retailers.

Jim Nail, a senior analyst at Forrester, said companies using such services are four times more likely to win sales than by keeping their email operations in-house.

As a result, $3.2bn (£2bn) of the $4.8bn email marketing business in the US will go to such third parties to help retailers retain their existing customers. The remaining $1.6bn will go to other outsourcers that help attract new consumers through emails.

This is a sharp increase from last year's email services market in the US, which was worth $156m and split equally between outsourcing firms that send emails to existing customers and those that create emails to attract new consumers.

But the difference between emails in 2004 and so-called spamming that plagued customers a few years ago is that consumers will have given retailers their permission to send the messages, said Nail.

"Email marketing is different to spamming because of the use of opt-in and permission-based marketing [whereby consumers have consented to their email addresses being used]," he said. "With spamming, people used to go into news groups, scoop email addresses and sell them."

Nail warned, however, that the definition of 'permission' is still confusing because some retailers do not specify whether they might also give customers' email addresses to their marketing partners.

But retailers were not always getting the best out of their marketers, he added, because it is more productive to tailor messages rather than send blanket emails, which may not interest everyone.

As a result, retailers should think about using collaborative filtering techniques or cross selling their products. This would involve examining what customers have bought in the past and sending them offers on related items. For example, online retailer Amazon.com uses such techniques to recommend new books to its customers.

Retailers should also allow customers to specify how often they would like to receive emails, said Nail. "Email turns marketers into herders. Once they trap consumers, they must learn to tame and cultivate them as ongoing sources of nourishment," he said.