How much revenue does the email marketing industry generate across all industries in a given year?
It seems like a relatively simple question to answer, and surely something that everyone in the email marketing business has wondered in passing, at least once or twice…
Yet, there seems to be no definitive answer to be found anywhere!
Everyone knows that the email marketing industry drives a LOT of revenue worldwide.
However, finding specifics on what those revenue numbers are is, as it turns out, actually pretty tough.
Which struck the team here at Phrasee as odd. Very odd indeed.
So, we decided to take a look and see what we could find out…
Global email marketing ad spend
Data compiled by Forrester and reported by Samuel Scott in his recent Drum article No, advertising spend is not moving online – here’s why put total global email marketing spend at $2.32 billion USD in 2015, $2.56 Billion in 2016, and $2.81 Billion in 2017.
While 2+ billion dollars per year might seem like a big figure, it is important to bear in mind how small it is when compared to almost every other advertising medium and tactic in common use today.
The ROI conundrum
While email marketing ad spend numbers are relatively clear, the waters begin to muddy when one attempts to gauge what kind of return that email marketing advertisement investment generates.
- In 2016, Campaign Monitor’s annual company report claimed an ROI for email marketing of $44 for every $1 spent.
- Email Monday’s 2015 National Client Email Report puts the figure at 38-1
- A June 2016 survey of US marketers conducted by the Direct Marketing Association(DMA) and Demand Metric found that email had a median ROI of 122%
- The Marketing Insider Group, meanwhile, reported global email marketing ROI numbers at a paltry 21%
We could list a bunch more email marketing ROI numbers, but you get the point. Actual global email marketing ROI numbers vary widely, depending on who is reporting them.
Based on Forrester’s global email ad spend estimates and the 4 reported email marketing ROI rates we mentioned, we can extrapolate that global email marketing revenues in a given year between 2015 and 2017 fell somewhere between $487,200,000 and $123,640,000,000 USD.
That’s one BIG variance.
The good news
Any way you slice it, there is revenue being generated through email marketing. If there wasn’t, investing in email marketing would make no sense at all.
Econsultancy’s Email Marketing Industry Census 2017 estimated the annual figure for online retail sales driven by email at £29bn in the UK alone.
Better still, it appears as though brands are happy to keep spending at least some of their advertising budgets on email. In fact, global email marketing ad spend continues to rise year on year and has done for some time.
The interesting news
What is less clear is exactly where that extra email advertising budget is going.
In his post The Changing Economics of Email and Print in an Omnichannel Strategy, Neil O’Keefe argued that while email marketing spend is indeed increasing, these increased costs are attributable to increased operational costs incurred by the use of third-party email marketing services, rather than simply industry growth.
What this means is that bigger email marketing budgets do not necessarily translate to bigger email marketing volume (more emails).
Email marketing departments across the globe have learned that simply sending more emails no longer cuts the revenue-generating mustard. Sending fewer, better, more targeted and relevant emails does.
And data holds the key.
This revelation has led to the birth of a massive industry of 3rd party email marketing companies which help brands leverage their own email marketing data and emerging technologies like AI to do email marketing more effectively and more efficiently than ever before.
The future looks bright for email marketing.
A report by Global Industry Analysts, Inc. states that Global Email Marketing Spend is projected to reach US$9.1 billion by 2020. If true, this would represent a more than threefold increase in global email marketing investment over a three year period
That sounds great to us, and we’re looking forward to it very much.
And hopefully, by then we’ll have a global email marketing ROI number we can all agree on.