Email marketing segmentation: dead man walking?

It seems like the staple diet of a digital marketing blogger is to declare something dead, or not dead, or cleverly D.E.A.D.

Only this week, our David Moth wrote a piece on email marketing’s rude health (email is not dead).

I think the reason we’re obsessed with the death of marketing technology is because, despite the pace of change in digital, there are many age-old marketing principles that remain absolute.

Relevance, timeliness, perhaps more broadly the four, five or seven Ps – these will ever remain in the marketing canon.

And, of course, no matter how sophisticated technology becomes, there will still exist businesses that don’t get the marketing mix right.

However, despite all this, I am interested in areas of marketing that might undergo automation and sophistication to the point where they require little work.

What I foresee is the perfection of certain disciplines (e.g. marketing automation) throwing light on new priorities, such as a renewed interest in conversion rate optimisation or data cleanliness.

With marketing as a department more powerful than ever, why would the amount of work decrease? Surely we’re sticking our elbows out, and our oars into every part of the org?

So, what about email segmentation? Will there be a time when it’s no longer a core skill, something to be done actively by marketers? Will technology take care of it for us?

By Ben Davis May 21st 2014 12:25

What is email marketing segmentation?

Fairly simply, it is segmenting your market to better tailor email content, frequency and timing.

The aim is of course to serve/please the customer and maximise her spend.

Your data can be segmented by geography

Fairly obviously by the country or region a customer says they live in, or based on the IP address you have for a customer.

By demographics

For example, age, gender, shoe size, ad infinitum.

By behaviour

For example, purchase history, frequency, recency, channel or device usage, brand or sale interaction, shipping type, customer value, ad infinitum.

By lifestyle

For example, pregnancy, love of tennis, fondness for trout fishing, regular holidaymaker.

How important is email segmentation?

In 2014, targeting and personalisation are the top priorities of marketers according to the Econsultancy Adobe Quarterly Intelligence Briefing (see chart).

Of course, whether this encompasses email segmentation is debatable.

Marketing automation has a separate category, prioritised highly in B2B but not so much B2C, though I’d say targeting safely encompasses segmentation.

Top Digital Priorities 2014: Targeting and Personalisation

We can see from the latest Email Marketing Census that a large majority of marketers are using ESPs for campaign management, with 10% using multichannel campaign management software and 11% marketing automation software.

This means segmentation is likely still a very active/manual process by the majority of marketers.

You can see in this next chart from the census that, indeed, 76% of marketers perform basic segmentation, more than any other email marketing activity.

This suggests to me that marketers spend a fair amount of time on segmentation. For all its obvious value, the more segmentation you do, the more work in setting up creative etc.

And perhaps even with this work on segmentation, there’s more that could be done. Will more work on segmentation continue to bring dividend?

More charts from the census show it email marketing is ranked as the best marketing activity for ROI and yet it receives less than 10% of budget of the majority of marketers.

Is this because the ROI can’t be scaled, or because email isn’t given enough attention? I’d be inclined towards the latter.

Is active email segmentation about to become a thing of the past?

I’ve previously written a piece on machine learning, segmentation and personalisation.

The gist is that rules based systems can always be emulated by computers. Computers can find relationships between ROI, email frequency and content, customer behaviour and demographics, etc, very quickly.

Additionally, agile creative offers further capability to build contingency into email. Images that change according to customer data on open are now being used, and can remove some variables if used smartly.

The current state of tools for testing, for email send, for CRM, for creative, for segmentation – surely these are set to be consolidated?

Will we look back on these as just another printing press, a technology to be improved upon? Has the time come to let technology do even more of what feels like a marketer’s stock and trade?