Forrester’s March report, “Email Marketing Comes of Age,” finds that clickthrough rates have remained steady since 2003, at an average of 5 percent, and that email is the No. 1 activity on the Web.

And Datran Media’s December 2006 annual email study found that 83.2 percent of respondents picked email marketing as the most important advertising tactic they planned to use in 2007. British Columbia-based super-affiliate Colin McDougall claims that email marketing is his most powerful marketing channel and it accounts for approximately half of his business earning. He thinks that relying on natural search rankings is a “fool’s game” and considers his email list to be his customer base. McDougall says that when he sends an email to his list, the response is immediate, with most of the sales flooding in on mailing day, and then a trickle of sales ongoing as a result. The Forrester report finds that when email solicitations work, they work quickly: 29 percent of all online consumers buy immediately following an offer. And consumers who buy products advertised in emails spend 138 percent more online than peers who do not.

Email 2.0

Email marketing has been around for more than 10 years, but lately it’s been going through a renaissance as marketers experiment with integrating new innovations into email to make it more effective and useful. Web 2.0 has been defined as the more interactive iteration of the Web – the participatory Web, which involves user action. That’s what today’s email campaigns are designed to do – reach out to potential customers and get them involved.

Email newsletters comprised of user-generated content (UGC) are one example. Tara Lamberson, vice president of marketing and solutions for interactive agency MindComet Corporation, says that its client, Daucourt Martin Imports, has a newsletter called the Drink Pink Weekly for its brand XRated Fusion Liqueur. The newsletter, targeted at professional women, highlights UGC-like consumer-submitted recipes and drinks collected by bartenders.

Lamberson says the campaign’s results are measured by viral pass-alongs and the tone and spirit of the user feedback, and that the campaign is effective in nurturing brand evangelists.

A newsletter called the Daily Shoe Digest, by the shoe e-tailer Zappos.com, is constructed only of UGC. The newsletter, which has links to Zappos but does not appear promotional, has a moderator who edits the content. Chad White, director of retail insights and editor-at-large at the Email Experience Council (EEC) and editor of the RetailEmail Blogspot, points out that if references to other retailers were deleted, the forum would seem artificial and overly managed.

White explains that Zappos is trying to build a community of passionate shoe buyers and bask in the halo that it generates. “UGC is all predicated on the success of product reviews – and products that have received good reviews sell much better.” He also notes that allowing contributors to mention other outlets builds credibility for Zappos as a trusted source of information.

UGC in email newsletters works best for narrower categories. White says there needs to be a “niche to grab on to,” so a company like Macy’s would be too broad. AbeBooks newsletters are effective at creating a sense of community because when consumers subscribe, they choose an area like cooking or science fiction, and then are sent relevant content related to that interest and asked to contribute book reviews and participate in poetry contests.

Another popular form of UGC is blogs. Companies are establishing blogs to nurture ties with customers – and retailers are promoting their blogs in their email newsletters. In January, PETCO launched its PETCOnews.com blog and alerted subscribers to its presence in a PETCO Post newsletter the following month. PETCO has been using its email newsletter and blog in tandem to keep people updated on the pet food recall and has directed subscribers to its blog for updates.

Marketers also are promoting their RSS feeds through email newsletters. Retailer eBags entices email recipients to subscribe to its brand-alert RSS feeds, which tends to be very frequent, so consumers can see new styles as inventory is updated. Jeanne Jennings, an email marketing strategy consultant, explains that some prospects want email, others like RSS and others prefer direct mail. “Consumers can choose – they are more likely to read the information if you’re catering to their preferences.”

RSS feeds can be delivered in email form to their subscribers. Rosalind Gardner plugs her blog’s RSS feed URL into AWeber’s Blog Broadcast and it takes her blog’s content and automatically creates an email newsletter. Affiliate consultant Shawn Collins also uses Blog Broadcast – he has it set up so that when he posts two entries to his Affiliate Tip blog, the entry is sent to subscribers’ email boxes.

Going Viral

eMarketer analyst David Hallerman says that email remains the primary way people tell other people about an ad or marketing website that’s funny or fascinating or in some way cool. “Although some people communicate via community postings or IM, the “Did you see this?” kind of email message still rules.

Greg Cangialosi, president and CEO of Blue Sky Factory, says he has clients who use email to drive their audience to blog posts, online videos and wikis and from there, the dialogue continues and the message is extended. Cangialosi predicts that out of all the elements that are highlighted in email, he thinks that blog posts and video will be the most widely used and will generate the most interest.

Marketers are also leveraging video in their email campaigns. As of June, EEC’s White found that 18 percent of the 100 major online retailers tracked via RetailEmail Blogspot have included a link to video in at least one email in recent months. White suspects this number will grow rapidly and that the frequency of use will increase.

White points out that links to video can be useful for a lot of different types of marketers. Barnes & Noble uses video for book readings and author interviews, and Bass Pro Shops has video tutorials on fishing advice and trips.

Executive director and senior partner of Worldwide Email Marketing of OgilvyOne, Jeanniey Mullen says that based on case studies of Ogilvy clients over a 60-day period in the spring of 2007, response rates for emails with video links are three to 10 times higher than those for static email. More important, these email messages tend to drive even higher increases in landing-page traffic and conversion. White explains that in 99 percent of cases, email newsletters have included a link to the Web-hosted video because there can be problems with embedded video – many email clients either don’t support it or block it by default.

But Mullen says that most of the problems with video-embedded email such as spam filters stripping JavaScript from emails and lack of broadband penetration have been overcome. She says that email service providers, such as VIZmail and AviMail, are able to deliver emails with video and flash inside.

But others find there are frequently rendering issues with video inside of email. Founder of the Affiliate Summit, Shawn Collins, says that a lot of email clients don’t allow video to be played with video in email – it doesn’t work right – it gets stripped out and “comes up blank in the email.” Most experts agree the best practice for right now is to link to Web-hosted videos so the user experience will not be degraded.

Mullen agrees that the best practice is to link to Web-hosted video for other reasons: Video that opens up in emails can be wasted on a recipient who does not have the volume up, or the recipient might not want to disturb office neighbors and quickly close the email – causing the message to be lost.

One of the solutions for distributing video via email is through Magnify.net, which allows website creators to create a branded site to showcase their videos. Through an embedding option, Magnify.net

lets email marketers use plain HTML to insert a static image of the video player. When it’s clicked, email recipients are taken to the page where they can view the video. Collins explains that Magnify has AdSense built in to the landing pages and they share the revenue with the community owner.

Social Media Tools

In addition to users generating and sharing content, Web 2.0 innovations also look at how users can promote and rate content that is important and relevant to them. Marketers can leverage this trend in their email campaigns to incentivize consumers to indicate what is important to them.

When subscribers receive Shawn Collin’s Affiliate Tip blog RSS in their email, they have options as to what they can do with each post. They can use “Email This,” “Digg This” or “Add to del.icio.us.” Collins explains that these methods are a way that The Affiliate Tip gets more exposure in top Web properties. This past spring Buy.com experim ented with Digg and Delicious links alongside its products in one of its newsletters so that subscribers could click on the links to recommend products to those communities.

Craig Swerdloff is the vice president and general manager of Postmaster Network, part of Return Path, which offers email deliverability solutions. He explains that for Dell’s campaign to drive customer acquisitions, they sent an email that had a four-point rating system along the side that asked the recipient how relevant the offer was to them (on a scale from “highly valuable” to “no value”).

Swerdloff describes this type of a campaign as a “win-win” – the recipient gets to provide feedback and the marketer can gather data that over time improves their ad targeting, which eventually helps to fine-tune an appropriate offer. But marketers sometimes stay away from email because of the problem of unwanted email, Swerdloff says. However, ISPs are coming up with solutions that distinguish between wanted and unwanted email and some experts predict that deliverability issues will improve in the short term.

This is good news for marketers who are experimenting with new elements to use in email to engage potential customers. White says that all the improvements we’re seeing in the Web world will be translated into the email world and that email is benefiting from the growth in content on the Web such as video and UGC. Affiliates should keep in mind that they can have an advantage over merchants that are sometimes apprehensive to try new marketing techniques.