January 07, 2014

Marketing Research Chart: Does email produce an ROI?

SUMMARY: Gamification. Big data. Social local mobile marketing.

As we kick off 2014, be ready for more hype about marketing tactics.

While everyone who writes about the marketing industry gets giddy about what could be, in this week's chart, we wanted to focus on what already is. Let's take a look at the tried-and-true tactic of email marketing. Is it producing an ROI?
by Daniel Burstein, Director of Editorial Content

"Email marketing, even as basic as we did it in 2012, outperformed all other forms of online marketing combined for us. We are investing much more in email. It works better than PPC, better than online display ads, and provides a channel for content marketing."

The above quote is from a marketer who completed the MarketingSherpa 2013 Email Marketing Benchmark Survey, in which we asked:

Q: Which statement best describes your organization's perception of email marketing's ROI (return on investment) at budget time?

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Email marketing is producing an ROI for 60% of marketers

Why is email marketing producing an ROI for so many?

As one marketer responded, "ROI on email marketing is easier to measure/test/optimize. Social media is time-consuming and ROI is difficult to measure."

Another marketer responded more broadly, "Email helps us stay top of mind with customers and prospects."

A quick look at the breakout data shows email producing an ROI for:
  • 70% of B2C-only marketers

  • 56% of B2B and B2G marketers

  • 62% of B2C and B2B marketers

32% of marketers do not see an ROI yet … but expect to

Not all marketers have already documented an ROI for email marketing, but many who haven't yet do have faith that they will.

One marketer's goal was to "develop a more consistent email marketing schedule with interesting content, which delivers a measurable positive ROI."

Email marketing will eventually produce an ROI for:
  • 25% of B2C-only marketers

  • 35% of B2B and B2G marketers

  • 32% of B2C and B2B marketers

Email marketing is unlikely to produce an ROI for 4% of marketers

A slim minority of marketers did not see email marketing as a beneficial investment. Why not? Perhaps it was because they did a more thorough job of calculating the actual cost.

As one marketing manager said, "Email marketing produces a financial ROI if you ignore the time cost of the staff involved."

Email marketing is unlikely to produce an ROI for:
  • 3% of B2C-only marketers

  • 5% of B2B and B2G marketers

  • 3% of B2C and B2B marketers

3% of marketers had other ideas

Many of these marketers might be looking at ROI more holistically, and are therefore uncomfortable measuring ROI for a specific tactic, like the marketer who responded, "Email is part of an overall lead generation program, not a sole producer of ROI."

Related Resources

MarketingSherpa Email Summit in Las Vegas — February 17 through 20, 2014

Marketing Research Chart: What is the estimated ROI from email marketing programs for your organization?

The 4 Pillars of Email Marketing

A/B Split Testing: How to use A/B split testing to increase conversion rates, challenge assumptions and solve problems (from the MarketingExperiments Research Directory)

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