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Do You Know What Your E-Mail Subscribers Are Worth?



By Matt Kinsman
05/01/2006

With spam, over-saturation and the rise of new content distribution
channels such as RSS, we may have already passed the golden age of
e-mail marketing. But even as publishers start re-investing in "old
school" circulation marketing techniques such as telemarketing, the
immediacy and cost-savings of e-mail remains popular.

How do you gauge the value of the typical e-mail newsletter? Since the
majority of e-mail newsletters are free, it usually comes down to
sponsorships sold. Publishers max out the number of subscribers to the
newsletter but pay little attention to the individual worth of those
subscribers. "In the optometry market, they rarely give us their e-mail
addresses," says Emelda Barea, vice president of circulation and
distribution at Jobson Medical Information. "Some of them are not quite
computer savvy. Once they give us their email address, we use that not
only for renewal, but we migrate that to other products and
subscriptions. We try to maximize the value of the e-mail address. All
we know is that we are getting ad dollars from all our efforts. The
e-mail subscriptions are in line with our other ways of getting
subscriptions."

The trouble many publishers have is that e-mail addresses get dumped
into one large pool. "Since we don't correlate specific e-mail
addresses to specific e-newsletters because we have a larger base than
what is purchased by the advertiser for their sponsorship, it is
difficult to measure what the ムvalue' of each of the available
engineers is," says Barry Green, vice president and director of
circulation at Hearst Business Media. "Within the last two years we
have gone from having virtually no sponsored e-newsletters to typically
having 5-15 in a month, generating tens of thousands of dollars. To
think that a few years ago we were concerned about ムgating' the Web
sites in order to require registrations!"

Calculating the Value

So why worry about it? Because it can determine the efficiency of your
marketing. Last fall, Odgen Publications launched a Web site and
companion e-newsletter titled Mother Earth Living designed as a
"pre-editorial hub" to draw traffic to the Web site. Originally, Odgen
sent an e-mail every two months to give readers a head's up on changes
in Web site content and the magazine. Now the company is using the
newsletter to promote content and special offers. The newsletter
reaches around 12,200 people now while the magazine reaches 300,000
readers. Assistant publisher Bill Uhler thinks the e-mail newsletter
could reach an audience 10 times the circulation of the magazine.

"We're working on getting value so we can turn on the actual marketing
messages to these people" says Uhler. "We don't have a value yet but
once we have a value for it we will start investing more in acquiring
the subscriber names. Right now most of what we get is off our Web site
and through search engine optimization."

As Odgen identifies products, it looks at the costs of doing
promotional mailings to its e-mail lists. "If we send out 200,000
e-mails and we get a 2 percent response and the general pay-up is $20,
we can establish a value over the course of the e-mails we've sent
out," says Uhler. "If we know that we're going to generate $5 off of
every subscription we have, I have no problem buying key words that are
20, 30, 40, 50 cents per word from a clickthrough standpoint. If I
spend 50 cents a name, then convert 50 percent of those names, I know
I'm paying a dollar a name but I'll make $5 dollars off those names. I
know I'm making money every time I spend a dollar."

Still, the key to making your e-mail newsletter a successful marketing
vehicle is strong editorial content. "Few publishers send magazines
that are all ads;why would that work with e-mail?" says Don Nicholas,
managing director at Internet consultants the Mequoda Group. "You have
to have a really successful editorial newsletter first. If you do it
the other way around, you'll be the guy wondering why everybody else is
making so much more money."

By Matt Kinsman
05/01/2006







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