The Combo
Both email and digital ads have been around for over 25 years, and yet ads in emails have not taken off except for publisher newsletters. Of course, one could argue (as I have) that most brand emails are ads! But that aside, given that ads are conquering almost every corner of our lives, it is a surprise that ads and emails haven’t been mixed and matched. By my estimate, about 2 trillion business-to-consumer emails are sent each month. Digital advertising is the most important business model of the Internet, generating $500 billion annually. So, can the twain meet? Can ads in emails open new opportunities for advertisers, brands, and consumers? My short answer: Yes, the time has come.
There are five reasons why change is coming. First, AMP in email can change the format of ads. Instead of clicking through on a display banner to a landing page, ads can become interactive, and the engagement can happen without shifting attention to a new context. Second, with 2024 being the year of the third-party cookie deprecation, advertisers will want better targeting. What better place than an email footer where the PII (email ID) is known? Third, a solution to the email open problem has the potential to dramatically increase open rates and therefore attention. Fourth, with brands facing pressure on profitability, there will be interest in new revenue streams. Finally, new ad formats can create exciting opportunities for advertisers beyond what’s possible with the traditional digital ads we have become so used to.
Email ads are a topic I have discussed in the past. In Reimagining Email Ads, I wrote: “There are three innovations in email which can enable a big leap in email advertising – AMP, Atomic Rewards and the Email Footer. AMP, a technology introduced by Google, is about making emails dynamic and interactive. It enables the creation of mini-websites and apps within the email itself, thus reducing the need for clickthroughs and landing pages. Atomic Rewards brings in micro-incentives to nudge actions… While AMP and Atomic Rewards (in the form of Mu, a pan-brand token for attention and data) can be used within the email body, the footer is where the possibilities can be widened… For brands and consumers, Email 2.0 ads can be the next leap beyond programmatic. With billions of daily emails already being sent, the traffic and attention is there. What is needed is innovative thinking to reimagine the power of email ads. There are five possible use cases: Search, Sale, Say Yes, Survey and Second Life… f we estimate that each ad could generate at least $1-10 in revenue, the opportunity for email ads could be about $25 billion annually – 3 times the size of the email service provider market. In fact, ESPs could let brands send emails for free in return for a cut of the ad revenue generated!”
In a subsequent essay Can B2C Email Become Free?, I asked and answered many questions about email: “What would it take to offer businesses a million free emails monthly (100,000 contacts x 10 emails a month)? How disruptive could that be? And what if the emails sent could be made more engaging – more opens, more in-mail actions, more engagement? Would such a free service work? Or would it be too good to be true?! What else could be added to make it a compelling switching proposition? From a service provider’s view, what would it take to offer such a free service – and do so profitably? Could it be scaled to every business irrespective of email volumes and database size?”
A combination of free B2C emails where ESPs (email service providers) monetise via ads can create win-win opportunities and connect consumers, marketers, and advertisers. It will require a fourth entity – a forward thinking email service provider – to make it happen. In this essay, I will put forth some ideas on how it can be done.
