The use of email marketing to drive customer acquisition is in significant, and terminal, decline.

Demise? Is that the right word for what’s happened to IPT? A company with a market capitalisation of £30m+ sold for £1.3m to a ‘turnaround’ venture capitalist? Demise is fairly accurate, I think.

So what does this teach us about the online space and email marketing in particular?

The first point is that email is not a customer acquisition tool. In fact it never has been, but in the early years of the media, the novelty of receiving email meant that acquisition and lead generation emails wereopened and clicked on.

However, the rise of permission marketing and opt-in hastened the decline in open and click rates. Essentially, this means that IPT’s business model was flawed from the start.

The other interesting element of the IPT story was what the company said about deliverability when its acquisition was announced to the press:

"Despite overcoming the specific delivery problems experienced in 2007, the business has been affected by generally increasingly difficult email delivery environment."

So, IPT never solved the deliverability quandary, something the market has known for some time.

Different companies take different approaches to resolving deliverability issues. But deliverability is based on one key focus; tying business marketing needs to consumer expectations.

Any email marketer who thinks that consumers expect and deserve regular, mass email marketing will find their reputation and results flowing rapidly down the toilet.

Email marketing is a retention tool, and used cleverly it is the ‘killer app’

If IPT is ever going to recoup even part of its losses it needs to seriously rethink its ‘raison d’être’. 

Cold emailing as a core business proposition just doesn’t work because the need to flog as much data as possible is totally contrary to email marketing’s core requirements - targeting, relevance and quality. 

Matthew Kelleher

Published 10 October, 2008 by Matthew Kelleher

Matthew Kelleher is commercial director as RedEye and a contributor to Econsultancy.

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Comments (8)

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"Cold emailing as a core business proposition just doesn’t work because the need to flog as much data as possible is totally contrary to email marketing’s core requirements - targeting, relevance and quality. "

Couldn't agree more!

almost 10 years ago



I agree with it because emailing is getting tougher with the scam mails and mala-fide people. Besides, i get irritated with mails which are irrelevant and occupied the space in my mailbox!

almost 10 years ago




this is a statement that is somehow exagerated and therefore I would advice the writer to consult a few sources that do customer acquisition for clients.

You can rent lists in Europe (and also in the US) and run personalised campaigns on those networks (some of the guys out their do a very good business in keeping their lists fresh). The total cost of acquisition will ALWAYS be lower than similar campaigns offline. For e-tailors most of the time the paper catalogue is the source of most leads (source: 3Suisses). Compare the cost of such a catalogue with an email campaign and you'll see that email acquisitionis ten times more affordable.

Also, e-tailors invest far less in email than in thair paper catalogues, if they would invest the same, they would most of the time get more leads and have a more personlised contact with their clients.

So email is not only a loyalty machine, but certainly also a driver of sales & leads. ... you have it wrong!

Kind regards

Hans Smellinckx
Brand Manager

almost 10 years ago

Matthew Kelleher

Matthew Kelleher, Commercial Director at RedEyeEnterprise

Hi Hans, it is important to point out that my blog comments are not representative of the views of eConsultancy in any way, but my personal opinions and, to a degree therefore, the opinions of RedEye.



almost 10 years ago

dan barker

dan barker, E-Business Consultant at Dan Barker

I agree with a lot of this, especially that IPT had big strategy problems & that 'cold emailing' is dodgy at best.

Here are 3 places I think email can work for customer acquisition:

1. Very high margin items with highly targetted lists.
2. Long, soft-sells. eg a housing developer who builds a list of interested people & emails them throughout the build process.
3. Web visitor->Email subscriber->Customer. It may be easier to convert a web visitor to an email subscriber & *then* to a buyer.


almost 10 years ago


Mark Patron

I'd add that email works for conversion as well as retention. It's not really a media for cold acquisition

almost 10 years ago


James Cioban

No matter how many times you say it, some people still don't understand the message. Your comments are not only spot on, they use market realities to reinforce the message. Now, all we need is the "cranial hammer" to bang it into people's heads....

almost 10 years ago

Ian Tester

Ian Tester, Senior Product Manager at brightsolid online publishing

Renting 3rd party lists for acquisition has sucked forever and always will.

Back in 2001, the price of email lists in the UK was so depressed that you could buy most for £5, not that you would want to. The economics are like inserts in papers - you know the cost of fulfilment is almost zero, so if you stick too your guns, most salespeople would always take a catastrophically low CPM rather than no revenue.

The issue is the quality of lists - most publishers have appalling list hygiene and they don't proactively clean out hard and soft bounces, and more importantly, people who don't respond, don't unsubscribe and simply hit the spam button (and therefore create deliverability problems for the entire domain). Lots of publishers don't even have a working unsubscribe - I won't name names but sadly, you probably DON'T know who you are.

As an acquisition marketer, you don't want your message going into inboxes managed under these circumstances as the brand damage is horrible even when weighed against the sales you might wing. If you're a responsible publisher, you similarly wouldn't want to tarnish your image by delivering 3rd party solus messages. The crappy CPMs don't justify it.

I'm surprised IPT kept going as long as it did - most of their lists were generated by prize draws or other incentivised signups - so you're basically buying "compers" - not the best converting audience. I imagine that beyond a few select verticals, their client retention rate was not high.

Email is astonishingly effective. But only if you build your own lists, treat the users with utmost respect and build in bulletproof preference and permission management processes. Then use lifecycle targeting to create ultra-relevant campaigns based on actual behaviour data.

The odd thing is that none of this is rocket science, but precious few marketers seem to be doing it - the majority are still stuck at "spray and pray". Those that do see enormous benefits, and funnily enough, their users do as well.

almost 10 years ago

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