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E-Mail Service Providers in Brutal Battle

NOVEMBER 8, 2006

If competition is good for business, things are looking up for e-mail marketers, if a little confusing.

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According to figures released this fall by the Internet Advertising Bureau (IAB), spending on e-mail marketing grew from $116 million in the first half of 2005 to $158 million in the first half of this year, a healthy jump.

US Online Advertising Revenues, by Format, First half 2005 & first half 2006 (millions and % of total revenues)

Unfortunately, the percentage of e-mail marketing's spend compared to total online spending remained constant at 2%.

In a hot market, the annual "E-Mail Buyer's Marketing Guide," from JupiterResearch, is much anticipated. This year, however, it contained a warning for e-mail service providers (ESPs).

According to Jupiter, if given the same services at a similar or reduced price, 32% of marketers that use ESPs may switch vendors in the next 12 months.

"As the e-mail market becomes increasingly mature, ESPs that lack tight integration with their clients, or a satisfying process and service experience, are susceptible to client churn," said David Daniels, Jupiter analyst.

In fact, the report itself is generating some churn — or at least more competition — among ESPs.

SubscriberMail put out a press release announcing it has achieved the highest marks in the guide for the second year in a row — and scored first in overall business value in the small and mid-size market category.

Not to be outdone, Responsys announced that it had scored highest overall among large-enterprise-oriented ESPs — "the second consecutive year that Responsys has earned the highest combined score in its category."

Quickly joining the fray, e-Dialog claimed it was named "the top performing" ESP based on its achievement of the highest combined score in value and market suitability among service-oriented ESPs.

Finally, a release from Silverpop noted that the Jupiter guide had cited it among the top large-enterprise-oriented ESPs offering outstanding business value and market suitability: "This is the third year in a row that Silverpop has been given one of the highest scores in its category and the fourth year it has scored in the top five in its category."

Congratulations to all the winners.

For more about where marketing dollars are going online, read eMarketer's US Online Ad Spending: Peak or Plateau? report. 

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