Ragy Thomas is the president and CTO of interactive services at email marketing company
, which is ramping up its presence in the UK and Europe.
We spoke to Ragy and Ted Wham (SVP and GM of EMEA at Epsilon International) about the firm’s recent $435m purchase of mail order company Abacus, plans to become a multi-channel agency, making the giant step across the Atlantic, and increasing demands from clients in the email marketing space.
What’s your outlook for the email marketing sector this year? What’s going to drive adoption?
Ragy: Our revenues have been increasing significantly year over year and we expect that to continue this year.
We’re also shifting our strategy a little bit, and becoming a more of a multi-channel, strategic partner, as opposed to just an email execution company. That plays well with how the industry is going as a whole, around the world.
What about the European market?
Ragy: From our perspective, email marketing is becoming more complex and marketers are realising the power of it. It has always been cheap and easy, but marketers are realising what they can do with it. With that realisation comes a need for additional data processing, analytics and reporting, and that’s where the value added services come in.
Ted: I would echo that. The experience in Europe has been that email marketing has been done at the country level, even for companies that have email marketing needs spanning more than one country. What we’re seeing is a focus on the financial benefits of email marketing and removing them from email-specific metrics.
Whereas in the past, we would have seen clients focusing on metrics like open rates and click-through rates, we are seeing much higher focus on campaigns’ impact on brand awareness, actual measurable incremental revenue and something you can take to the financial director.
What metrics are you using to measure those things for your clients?
Ted: Most of our clients are still using email marketing for more direct marketing purposes, as opposed to brand building, so it’s a crawl-walk-run phenomenon.
Ragy: We see the market evolving around three dimensions. We see the focus moving from execution to being strategic and developing true agency-type relationships.
We see an evolution from single-channel companies, where you have a separate email company, search company and direct mail company, to where they come together as multi-channel companies. We also see an evolution for marketing companies to become much more industry-focused.
Following your purchase of Abacus, what are your investment plans in Europe?
Ragy: We have a pretty aggressive growth plan for EMEA and APAC. In EMEA, we have more investment growth plans than we ever did in the past. We are hiring very aggressively and we are staffing the team up locally, and we are pretty bullish about what we can do in Europe this year.
Ted: We’re expecting to double the size of our European account management team this year, and are approximately tripling our training budget. There is a major focus on providing value added services for our clients and helping them to achieve their business goals, moving away from a product to a value add scenario.
Ragy: We are also moving in the direction of being a truly global company, and having the folks in Europe work closely with the folks in the US to support global brands.
When do you plan to move into the search marketing sector or other areas of online marketing?
Ragy: We are in the process of launching this in North America. In December, we have hired a VP of search marketing. We have a couple of clients we are working with already. It’s a little premature but the strategy is to follow suit in Europe when the timing is good.
Do you see more court cases happening this year against EU companies flouting spam laws?
Ted: I used to be the chief privacy officer at Expedia in the US and got some good grounding in international privacy issues, including the data protection directive here.
The rules keep getting a bit tighter and the requirements for companies keep getting a little bit harder, so I do expect we will see some more legal suits around that. I also expect us to see additional focus from companies on making sure an unsubscribe at one touchpoint is reflected in other communications they are doing.
Ted: Boy, this is just an evolving landscape right now. We published a whitepaper in the last three months about default image suppression, which is becoming an ever-larger issue, we’re seeing changes in the marketplace coming in this year and we’re seeing spam filtering developing.
The technology continues to evolve but it is not there yet to protect the consumer from unwanted email. We expect to see additional changes and the role we are trying to take in this area is to help our clients understand best practices and monitor performance from an individual ISP standpoint.
Ragy: The two key developments we are watching carefully is the default image suppression which Yahoo! is using in the new version of its software. We are watching that and helping our clients deal with that and we’ve been proactive about it. There are ways to get around it but we think it is a good thing for the industry because the focus will go back on the actual email message.
There is also the concept of feedback groups and that email is going from a one-way dialogue to a two-way dialogue. We are at an early stage with this, but we are seeing ISPs coming to bulk senders like us and telling us what is happening at their end, like with Hotmail’s postmaster.
You can also see this in the new standard the industry is working on – the user reporting format (URF). That’s got a lot of potential, if we can get the ISPs to agree on a common language through which they can talk back to the email community.
What’s your outlook for video and how are you making use of it in campaigns?
Ragy: What’s driving that is the adoption of broadband, but as with a lot of things, it is happening on the web before moving to email.
Ted: In general, you also have the problem that video, and enhanced capabilities like it, run counter to the technology trends being adopted by the ISPs and the creators of the email clients, which are restricting technologies you see in a web browser from being used in an email context.
What’s your view on RSS? Is it competitive to email? Also, how is it measurable?
Ragy: I think it is complementary. Whenever a new technology appears, the trend is to say email is dead. History always proves that’s never the case. RSS had a lot of buzz a year or so ago, but that has kind of come down in North America, I think. It’s a great way to get information and it has some measurability challenges that can be sorted out. It’s going to play a part in the marketing mix.
See the briefing from our Email Marketing Roundtable in October for more info on best practices…