Jupiter: Rich Media E-Mail Underused

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Few marketers take advantage of Flash- and video-enhanced e-mail despite the growing popularity of rich media in online advertising, a new study by Jupiter Research concluded.


Rich media e-mail is regarded as an expensive direct marketing tool because it costs marketers 30 percent to 60 percent more than its HTML variant and can be viewed by only one-third of consumers, the study said.


"For now though, rich media e-mail seems to be at a point where rich media on the Web was several years back where penetration levels weren't quite as high as marketers would like or marketers didn't have an excellent understanding of how to use rich media to its best effect," Jupiter associate analyst Nate Elliott said.


Rich media e-mail has champions in only three types of marketers: those sending messages to more than 250,000 users and thus able to amortize costs; entertainment marketers using sample music and video clips without visiting a click-through page; and those with high value per customer, like luxury automakers.


"Marketers who don't fall in this category are likely to have a hard time making the economics work because of the higher upfront costs and the higher fees associated with rich media," Elliott said.


Two factors determine the ability to view rich media e-mail. One is the e-mail client, and the other is the presence of a rich media player. Nearly all Internet users have rich media players like Flash and Java installed on their computers. But more than 65 percent of personal e-mail accounts use clients like AOL, Yahoo Mail and Hotmail, which do not display rich media content.


Consequently, only a minority can view Flash- and video-enhanced e-mail.


In a typical rich media e-mail campaign, 30 percent to 35 percent of consumers e-mailed will view the rich media message, 50 percent to 60 percent will view an HTML version and 10 percent to 20 percent will see a text message, the study found.


Cost is a major factor in rich media e-mail's adoption. Creative and production fees can cross $10,000 in certain cases. Rich media serving fees add 2 cents to 4 cents per message delivered to reach only one-third of the list able to view such content.


Marketers using rich media e-mail need to keep a few things in mind, Jupiter advised.


For instance, they must choose the appropriate type of rich media. Digitizing a television commercial to run as video e-mail costs up to 50 percent less than designing new Flash e-mail. But marketers must gauge the strengths of each type of rich media and select the technology that has the best effect on their audience.


So, video e-mail is quite appropriate to generate new subscriptions for premium cable TV networks. Similarly, cell phone makers have found that interactive Flash e-mail is good for demonstrating handset features.


Marketers are also urged to test rich media e-mail across an entire list. While e-mail creative normally is tested on small segments of a list, the high upfront costs of rich media e-mail make that an uneconomic option.


"Marketers considering the format should make one entire mailing in rich media," Elliott said in his study. "The list will automatically split itself based on e-mail reader compatibility, and marketers can then compare the effectiveness of rich media with HTML."


Finally, marketers should shop around for best prices. The market for rich media e-mail is still maturing, so prices have yet to stabilize. Some vendors charge up to 80 percent less than competitors for creative services work of similar quality, the study found. Marketers sending a high volume of rich media e-mail can get discounts of up to 75 percent on serving fees.


Though rich media e-mails to consumers are tough, those directed at professionals are more likely to succeed, the study claimed. Rich media penetration among business users is higher. On average, 40 percent to 50 percent of business mailing list users can view rich content.


The argument can be made that business lists usually are smaller than consumer lists, creating a higher cost per message for rich media e-mail. But this cost may be offset by the typically high value of a business acquisition.


If there is a danger to future e-mail marketing, it is Microsoft. The software giant later this year will introduce a new version of Outlook, its corporate e-mail software. Outlook 2003 will require users to take an extra step in each e-mail message to see HTML images. Plus, the program may also prevent users from viewing rich media content inside a message.


"What it's going to wind up doing for marketers is make it harder to send compelling messages," Elliott said. "If every message a user receives in Outlook is a series of blank images until they click a button, that's not going to be an attractive solution for marketers trying to reach their customers.


"Additionally, if users can't open rich media inside of Outlook, that's also going to be a detriment to what certain marketers are trying to do. It's somewhat of an understandable step by Microsoft because these are the technologies that can potentially be used to create or spread viruses. But at the same time it's going to make life more difficult for marketers."


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