Online Exclusive: Necessity Is the Mother of Innovation

In this era of M&A activity, where Oracle acquires Seibel, E.piphany gets snatched up by SSA Global and Alliance Data buys both Bigfoot Interactive and DoubleClick Email Solutions, just to name a few, marketers inevitably wonder what it all means.

Especially in the case of e-mail marketing service providers being acquired by mixed-media firms, consolidation is rampant and can be tumultuous on the marketer. While differentiation between high-end e-mail tools is negligible, what the client should ultimately ask themselves is, “Is this ESP the best fit for my business requirements?”

According to the JupiterResearch report “E-mail Marketing Buyer’s Guide, 2005,” pairings of ESPs and offline marketing firms have not yet changed the market in terms of product innovation or growth. In fact, the research firm points out that stand-alone ESPs account for more revenue and e-mail volume than mixed-media ESPs and outperform the overall market in average annual growth. Why is that?

In my opinion, stand-alone ESPs are outpacing mixed-media ESPs because we have a laser-like focus on adapting our dynamically changing medium to evolving market demands and we are committed to proactively bringing new e-mail marketing ideas to our clients. Furthermore, we have the drive to differentiate our solutions with innovative and sophisticated strategic services, such as consumer data integration and analysis, to help our clients deliver increasingly targeted messages that produce unbeatable results.

Though JupiterResearch expects market consolidation to continue, the report asserts that buyers should be skeptical of the all-in-one approach. Research director and lead author David Daniels states that no on-demand or service-based analogue in the technology sector illustrates consolidation of related services radically delivers more value. So why won’t the marriage between database marketing companies and ESPs necessarily build strength?

First, none of the acquisitions in this space have been mergers of equals. The revenues from the new e-mail divisions are small compared to the parents’ existing business, meaning corporate leadership cannot give them their full attention. Meanwhile, acquisitions create a natural level of turmoil for the acquired company as remaining employees figure out their new roles, procedures and reporting structures.

Cultural mismatches need sorting, and the new management must figure out the business before it can add value. Lastly, with all this commotion going on, is the ESP able to be innovative, client-focused and nimble? Marketers must go back and ask themselves, “Is this larger, combined entity the right fit for my rapidly changing business requirements?”

If your business requires agility, a laser-like focus on the customer, and strategic services that will enable you to achieve a higher level of sophistication and results in e-marketing efforts, then the answer is no. Stand-alone ESPs are thriving in this era of competition because they are consistently and persistently innovating to help marketers advance this powerful communication channel.

Marketers need to choose which type of provider they are more comfortable with — smaller, nimble and innovative or bigger and less focused — but they can certainly feel secure by choosing a stand-alone ESP that specializes in helping them solve their business problems in the evolving medium of e-mail. That kind of expertise is the best choice for innovative marketers who want to execute top-level e-mail marketing.

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