Moving beyond e-mail blasts and cost-per-thousand pricing

November 13, 2013 04:15 PM

Say good-bye to market-blanketing e-mail blasts; say hello to more targeted cross-channel marketing campaigns.

“The market doesn’t see e-mail volume as where the value is anymore,” says Adam Sarner, an analyst at technology research and advisory firm Gartner Inc. He says both business-to-consumer and business-to-business marketers are getting smarter about how they use e-mail as part of their marketing mix as they gain more access to technology such as customer lists segmented by shopping interests and “predictive analytics” that use past shopping patterns and other data to pitch products customers are likely to buy. “They’re sending less e-mail, but starting to take advantage of things like predictive analytics, segmentation and offer management to e-mail the right campaign to the right recipients.”

At the same time, he and others say, e-mail marketing vendors are looking for new ways to make money while also helping marketers run more effective coordinated campaigns across multiple marketing channels, including e-mail, online display ads and mobile messaging.

And that’s leading vendors to move away from pricing based on e-mail volumes, a long-running method known as cost-per-thousand e-mail recipients, or CPM.

“CPM-based pricing represents a bit of a mismatch between the medium and the value that it provides,” says Shar VanBoskirk, a marketing analyst with Forrester Research Inc. “It tends to reward marketers for sending more e-mail, with lower pricing tiers for higher volumes, and penalize them with higher fees for creating more customized messages.” For example, she adds, inserting dynamic content into e-mail marketing messages and segmenting campaigns based on customer interests typically comes with higher fees.

In that light, Adobe Systems Inc. this week took an initial step toward a new pricing model by announcing a change in the works for Adobe Campaign, a marketing system that coordinates campaigns across e-mail and other marketing channels. The new pricing model will charge marketers a flat fee based on the number of customer profiles Adobe holds for a marketer, regardless of how many marketing tools or channels they use in a campaign, Adobe says.

“Under our new model, marketers can communicate with their customers across any channel without being charged extra,” says Matt Belkin, vice president, customer strategy and business development. By comparison, under conventional marketing services arrangements, “every time a marketer wanted to speak to a customer across another channel, they get charged,” he adds. “We didn’t think that was right.”

The company’s move to cross-channel marketing services with single pricing follows its July acquisition of Neolane, a company whose technology was designed to integrate marketing campaigns across multiple marketing channels, including e-mail, social media, mobile, direct mail and personalized product recommendations made at store point-of-sale counters or by reps in customer contact centers. Adobe has since rebranded Neolane as Adobe Campaign, a cross-channel marketing service within the Adobe Marketing Cloud software suite.

Adobe says it won’t publicly release details on its new pricing terms for Adobe Campaign until January.

Robb McCarter, director of e-commerce and omnichannel marketing and integrations at store and web retailer Edwin Watts Golf Shops LLC, No. 727 in the Internet Retailer Second 500, says the new pricing model could be a refreshing change from volume-based e-mail pricing. “I’ve never liked pricing based on e-mail volume,” he says. “There needs to be a better pricing model based on customer profiles or some other method.”

McCarter says that a system like Adobe Campaign could be particularly helpful if, for a flat fee, marketers can take customer segments and run consistent campaigns for them across multiple marketing channels. But it all depends on how high Adobe sets its price levels, he adds. “It’s possibly a good deal if the numbers are right,” he says.

Forrester’s VanBoskirk says other marketing technology and services providers, which she didn’t name, are also considering new pricing models based on more effective campaigns rather than focusing on e-mail volume. She adds, however, that it remains to be seen how well merchants will respond to Adobe’s new pricing, regardless of the price levels it sets. “I’ve not heard marketers ask for this pricing change,” she says. “I think they may be somewhat resistant at first, because it is different and change is hard.”




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