Email is More Popular Than Beer...

According to Google Trends, email is more popular than Elvis, the Beatles, chocolate, beer, Justin Bieber and Harry Potter… but not sex. 

Say you printed out each non-spam email sent in the world on a single piece of standard A4 copy paper:

• One day’s worth of emails would produce a stack of paper 2,159 times taller than Mt. Everest

• It would take just over 20 days for the stack to reach the moon

• In just under 2 hours, you would have enough paper to cover the continental USA

• Around 4 days later, you could cover the earth’s entire surface area

If email accounts were people, the email population would be:

• 2.3 times the size of China

• 9.9 times the size of the USA

• 38 times the size of Germany

(credit)

Is Email Dead?

Advertising in Email Grows Up

When looking at the email advertising marketplace, you don’t have to dig very deep to figure out why more than 90 percent of all inbox ad inventories have historically gone unsold. With approximately 188 billion emails sent every day, that means there are billions of wasted impressions 365 days per year. Most email ad inventory is bought on a CPMs (cost per thousand emails sent) basis and it’s impossible to accurately validate publisher send counts in real-time. To make matters worse, the inventory curation and reporting processes are labor intensive and time consuming, all for this unguaranteed inventory.  So it shouldn’t come as a shock that advertisers are not flocking to buying email advertising.

That’s all about to change.

Real-time advanced ad serving is now possible with ad optimization and decisioning occurring within milliseconds of opening an email. Now, real-time reporting, 3^rd party ad tags, advanced targeting, day-parting, and frequency control can all be utilized. With greater segmentation capabilities, CPMs is no longer needed, making way for the reign of the more precise CPMv (cost per thousand views) pricing model. With this innovation, the email advertising marketplace has the potential to rival, even overtake, display from a performance perspective.

So why isn’t everyone buying in?

Some folks are put off by the fact that CPMv’s are higher than what they’re used to in display. But CPMv’s are higher because they’re more valuable. On average, 20% of the emails delivered result in Opens/Views and then those views drive an average .3% CTR, yielding a 5-100x lift from what traditional display delivers.

Strong considerations for CPMv:

1. Why buy or sell anything less than an impression?
2. Why buy something you can’t verify through a trusted 3^rd party?
3. Expect CPMv’s to be at least 5x higher than display CPM’s
4. Why wouldn't you buy an impression in real-time in email on open using all the major features offered in the display marketplace?
5. Your email subscribers are your most valuable customers; why not enhance their user experience with the most relevant advertising available?

My expectation is that soon the transparency, functionality and terminology we are used to using across the display marketplace will become the norm in email. When there’s no need to distinguish things like CPMv vs. CPMs, no one will have to pay for anything less than an impression.

- Jason Oates

Groupon and the Myth of the Daily Deal Company

Less than a year ago, incredulous observers were surprised when Andrew Mason and Erik Lefkovsky turned down a rumored $6 billion offer from Google for their fast growing daily deals company.

Fast forward to Friday, November 4^th. On that date, Groupon raised about $800 million in an IPO that valued the company at $16.6 billion. It’s a day many thought would never come. The stock opened at $20 and ended the day at $26. Not bad for a company that, at the end of the day, is comprised of a huge email list, some sales people and assorted copywriters.

Various observers, for good reason, have focused on the crowded and controversial daily deals space and questioned Groupon’s longevity in the face of consumer daily deal fatigue. But limiting Groupon to the daily deal is not unlike limiting Amazon to the book – every company has its on ramp and what it does once its created a platform is what separates Google from Overture. So what is Groupon?

Groupon is one of the world’s largest email companies. At 150 million email addresses, Groupon possesses one of the most valuable assets of the modern age: a list and permission to send email at an astounding daily frequency. Daily deals are Groupon’s ‘books’.

They’re in great company. And very well positioned for the future, despite what you hear from casual observers who value the company based on the trailing results of their daily deal business. So why are they positioned so well?

First, with their 150 million email subscribers, and all the preference data they’ve collected, Groupon can transition out of the daily deal business and into the general ecommerce business and become a force in whatever category it sets its sights – and executes - on. Experiments in ‘Travel and Product’, as Mason put it, ‘are enormous opportunities’.

Second, they’ve already incurred the cost of acquiring these email customers. True, their growth has slowed, but along with the slowing of growth, they should also have a slowing of customer acquisition expense. Based on Groupon’s valuation, each of the customers that they’ve acquired are worth about $100. According to Mason, they clearly know how valuable this asset is: “Once we have a customer’s email, we can continually market to them at no additional cost…With Groupon, we just spend money one time to get you on our email list, and then every day we email you a reminder of the sweetness of our [daily deals].”

Mason is right: almost every other brand has to continually advertise in order to retain their customers. When it comes to email, most people are subscribers for the long haul, whether they actually enjoy the content or are just too lazy to hit the unsubscribe button.

Just one more click...

A post by Fred Wilson on his great AVC blog today highlighted something that needed to be pointed out.  For more, check out his post ("Social Media's Secret Weapon - Email").

Fred reports that one of his most respected product-centric entrepreneurs links Facebook's strong metrics to its use of email to drive traffic back to the site, increasing site visits in both uniques and repeats.

I remember four or five years ago, people, myself included, were asking if social media was going to lead to the end of email as we know it. In an ironic twist of fate, it turns out that email is social media's secret weapon. And more and more social applications are leveraging the power of email to drive repeat usage and retention.

But Social Media isn't the only category that benefits from email.

Traditional online publishing is as dependent on email as any other category.  The reason is simple:  we are faced with unlimited choice when it comes to content that we can consume.  Every second, more content is being created.  It's feeding the growth in all sectors of the internet economy:  storage, distribution, categorization, advertising, search...you name it.  When content is created it has to be stored, shared, tagged, monetized and found.  And unless you people what you've done, they won't find it.

And what does that better than email?  Not SMS.  Not Search.

Why is that?  Two reasons.

Format and Habit.

Email gives you a large pallet to draw on.  You aren't limited to 160 characters.  You can use HTML.  And it doesn't cost most users to receive or send email.  Users are obsessed with checking their accounts.

It's also part of your daily routine.  It's the first thing you check when you get up, get off the plane, when you're standing in line at Chipotle.  When you're waiting for your friend that's late.

So when you are looking to get your users' attention (and more importantly their traffic), email is definitely the go-to channel.

Mary Meeker’s Mobile Trends Demonstrate Continued Power of Email

There's probably no other financial analyst whose presentations are as anticipated, shared, quoted, disputed, tweeted, downloaded and re-posted than Kleiner Perkin's Mary Meeker. Her previous presentation in November 2010, was an instant hit, identifying and unearthing market opportunities that many observers hadn't noticed.  Her thesis?  Mobile is changing things dramatically and you'd better get on board.

Her latest post is a follow-up jeremiad predicts something spectacular - a 26x growth rate in global mobile traffic (see slide 20).

It don’t get no respect…but it should!