Balancing Act: Efficiency and Revenue
Posted by Bill Leming on April 23rd, 2009
From any number of articles I’ve read and from numerous conversations with colleagues, it seems a generally accepted fact that total email spend in 2009 will outpace that of 2008 by anywhere from 15% to 20%. Obviously, like most generalities, much will depend on the specifics like to whom you’re talking, the industry in which they operate, the impact of the recession, the markets served, etc. If you accept that percentage increase as fact or close to it, there is the even more-widely held tenet that email marketing has far and away the highest ROI of any measurable media at our disposal today.
So we’re spending more on email because it gives us the highest return and, conversely, spending less on the more costly media that deliver lower ROIs. That seems to make sense. Stated a bit differently, we’re allocating more budget dollars to that marketing channel which is most efficient. That has me scratching my head. Specifically, it’s the “more” to “most” which is troublesome. What if we were spending most of the marketing budget on those initiatives that were most efficient (had the highest ROI)? That makes far more sense to me.
The answer lies in the fact that “efficiency’ is not the only metric that marketing must address. The other and equally important is the issue of “volume” in terms of units sold, revenues or profits generated, incremental profits produced, etc. Email may be enormously efficient but it’s nowhere near the revenue driver of say, internet marketing excluding email. So what’s the answer? 
