Reimagining Email Ads

Published October 18-23, 2022



Billions of emails are sent daily, and yet very few emails have ads. (I am ignoring the spam emails we get and the promotional messages in emails. I am also ignoring the affiliate emails sent by brands. By email ads, I primarily mean third-party ads embedded within the marketing or transactional emails.) Unlike other digital spaces where ads are shown which need to be “pulled” via consumer action, emails are “pushed” by brands to their opt-in database. Also, the identity of the recipient is known and so there is the possibility of targeting ads more sharply than just the use of cookies. Ads have emerged as a very powerful and lucrative business model on the Internet, and so it is surprising that they haven’t been more successful on emails.

I can think of a few reasons. Firstly, marketing email open rates tend to be low (10% or so), so the waste on ads would be high. But in a performance marketing world, this probably doesn’t matter – advertisers would only pay for what is acted on. Secondly, brands could be reluctant to show third-party ads in their emails. If targeted well, this resistance could also be broken. Some brands have already started showing third-party ads on pages after a transaction has been completed. Third, the ads would not have much context. Search has intent and hence the ads work. The marketing messages lack additional information which could make ads more effective. Fourth, brands could be worried that consumers may unsubscribe if they start seeing ads in emails. Finally, another reason could be that across search and social, there is no shortage of advertising space!

Digital advertising is a huge industry. Businesses spend over $400 billion annually to target a few billion digital users. It is an industry in need of efficiency since by my estimate, half of that spend is being wasted on reacquisition and wrong acquisition. Email ads could help improve the efficacy of new customer acquisition and reactivation. It could be a good revenue generator for brands. The question therefore is: what can be done to make email advertising work?

In this series, I will discuss how two new innovations (AMP and Atomic Rewards) could help reinvigorate email advertising by leveraging the email footer. A natural question is: who cares about the email footer? I had discussed a few ideas in an earlier series “Reimagining the Email Footer”: “Ad AMPlets could maintain that revenue stream but do it much better by eliminating the need for the click. They could offer a form fill for additional information in-place and thus improve the efficacy of lead generation… The Ads Footer is thus a win-win for both brands: the cost of an ad via Big Tech platforms is reduced and the brand whose email carries the ad makes some additional revenue (which could potentially be reinvested for providing additional Mu).”

Let’s start by understanding the basics of email advertising.



Sendpulse: “An example of permission email advertising is an email newsletter sent to customers of a particular brand. Newsletters usually inform subscribers about new products, upcoming events, or promotions. Marketers tell prospects what they will receive after leaving their email address in a subscription form. This way, the leads are aware of what they subscribe to.” It lists the advantages of email advertising: cost-effective and fast, allows to reach targeted audiences through segmentation, permission-based, higher ROI, easy to measure and compare, and instant and shareable.

Jeeng gives an example: “Say a fashion publisher runs a weekly email newsletter of content roundups. They can sell display ad inventory within those newsletters, offering fashion related-brands an opportunity to advertise to their subscribers. The publisher can then earn money for each ad impression, click, or conversion.” It adds: “For publishers, email advertising can be a strong revenue channel, in addition to others like website ads, paywalls, and paid subscription programs. With the right monetization strategies and partners, publishers can fund their entire email newsletter operations with ads. For brands, email advertising offers a way to reach built-in audiences of readers who are more likely to trust and engage with ad content from publishers they’ve already subscribed to.”

Paved: “The reason why email advertising works is simple—email subscribers are engaged. Many users have gone ad blind to display ads, and passively scroll past social media ads…The content that users allow into their inbox reflects topics that they are truly passionate about—not just whatever random Facebook page they liked 10 years ago. If a customer signs up for a newsletter about photography, you can assume they are very interested in photography, making them a phenomenal audience to target.”

LiveIntent adds: “[Email advertising] is a subset of paid advertising. It allows brands to reach targeted audiences in addition to or outside of their existing CRM database. With email newsletter advertising, advertisers can access premium ad inventory in reputable publisher newsletters…and target new and existing audiences in high-trust, high-attention environments.” It lists the benefits of email newsletter advertising: real, logged-in audiences, engaged subscribers, highly visible inventory, and privacy-safe advertising. More from LiveIntent:

Email advertising has a lot to offer brands. Firstly, there’s no need to worry about bots or ad fraud with email advertising. You can rest assured you’re reaching real, logged-in audiences in email newsletters. Email is also a less noisy, less cluttered environment than other channels — like social media feeds for instance — which enables email ads to truly stand out. Furthermore, by partnering with premium newsletters you align your brand with reputable and trusted publishers. And, that’s not all, either.

Given that subscribers have opted into the emails they receive, they’re already more engaged with the newsletter, the content in it, and — subsequently — the ads within that newsletter. Say, ‘Hi captive audience!’

Another major benefit to email advertising is email’s ability to help brands grow their first-party footprint — a critical component to surviving a cookieless world. And, because email newsletters don’t use third-party cookies to enable targeting but rather hashed emails, email advertising is privacy-safe advertising.

Programmatic is the way to think about email advertising.



Ioana Dulcu writes:

There are two kinds of ads that you can place in your newsletter: display ads and native ads. Display ads (also called “banner ads”) are salesy, brand-forward ads that display at the top, bottom, or sidebar of your newsletter copy. To most readers, display ads are annoying. That factor plays out in their clickthrough rate — less than one-tenth of one percent.

Native ads, though, appear in the body of your newsletter itself. Usually, they include images and intriguing headlines that promise information that your readers need to deal with the challenges they face. Unlike banner ads that yield little more than an eye roll, native ads entice rather than annoy.

When you advertise with programmatic email ads, you never have to pay a dime until someone buys your product or service. That’s just the tip of the ROI iceberg. However, you can be confident that your ads will only appear in newsletters with a readership that has a keen interest in your products and services. Not only that, but your ads will appear within the body of the newsletter copy…Programmatic email advertising, therefore, is likely the best bet for both publishers and advertisers during the coming years.

Business2Community writes:

The biggest publishers already have a native ads program for their print publications or for their websites. Generally, these native ads are labeled as “sponsored content.” Furthermore, these ads blend seamlessly into the editorial content. As a publisher, you get paid to publish them, sure – but they are less jarring to readers than a random display ad. All those things can be done with native ads in email newsletters, too.

Your email list monetization will get kicked up a notch again when you add in the power of programmatic advertising. The AI-driven algorithms that serve up programmatic ads can match each reader’s individual interests. So different readers will see different ads based on their online behaviors and preferences. That means more relevant, targeted ads for your subscribers and much less work for you. That time efficiency can be especially attractive for publishers who need to maintain the leanest staff they can. Programmatic native ads let you put a piece of code into the template of your newsletter and then step back as the ad revenue rolls in. They are an ideal way to monetize an email list.

Jeeng offers an overview of programmatic email:

Say a retail brand wants to promote its new line of workout clothes. The brand can buy programmatic ad placements in the email newsletters of sports publications. This way, the brand reaches readers who’ve opted in to receive industry-related content and will most be likely to engage with its ads.

Programmatic email advertising offers a range of benefits, including:

  • Enhanced targeting capabilities thanks to data-driven ad placements
  • Increased scale across newsletters without the headache of manual ad buying
  • Automatic budget optimization since you’re only paying for the most relevant inventory

Advertisers can buy programmatic email placements in different ways, including:

  • Real-time bidding on demand-side platforms

  • Direct deals with publisher partners

  • Private programmatic marketplaces

From SalesLovesMarketing: “Email is an effective vehicle for programmatic campaigns because it scales across multiple devices—people access email on smartphones, tablets, and laptops, as well as desktop computers. Safety is another issue, both for publishers and advertisers. Email tends to offer a more secure environment, where a login is usually required. This makes fraud less likely, meaning that programmatic email delivers more authentic clicks from actual people than other channels. The data that newsletter publishers are able to provide based on their audiences’ interests, behaviors, and demographics can get incredibly deep, offering marketers the ability to track individuals based on purchases, engagement, or sign-ups.”


Three Innovations

While programmatic has been the big breakthrough in advertising, 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. [Both these ideas have been discussed in Email 2.0: Making Email Cool Again.]

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. As I wrote in “Reimagining the Email Footer”: “Just 10% of marketing emails are opened; that means 90% of the emails are being ignored. Brands need a hotline to engage with their customers and email can be the best channel given. But if the Subject and Email Body are not persuading people to open emails, can something else do that job? That alternative can only be the Email Footer. In which case, there is a need to reimagine it. This is where Email 2.0 comes in … The time has come to reinvent email. The only real innovation in the past 10-15 years has been the conversion of text emails to HTML. While email continues to be the channel delivering the highest RoI, it can be made even better without compromising the user experience. In fact, the trio of footers (Brand, MuCo, Ads) can help make emails more fun, bringing convenience, information and gamification right into the inbox. Email 2.0 combined with a reimagining of the Email Footer can create a powerful hotline that can help create better brand-customer relationships.”

To rethink email advertising, we need to bring these three ideas together: consider email ads as AMPlets with Mu in the email footer. Here are some of the possibilities:

  • A Search ad can display results in-place (within the email itself), with the ability to add to the cart and perhaps even make the payment – all without leaving the email.
  • A Subscription ad for a newsletter would require just a simple click on a checkbox rather than clicking through to a landing page and entering one’s email address again. The same idea can apply for lead generation.
  • An inactive customer of a brand who has stopped opening emails from a brand could be ‘awoken’ via an engaging ad with an incentive. The alternative for the brand is paying many times more to retarget the same customer via the Big Tech platforms.
  • A brand can do surveys to collate opinions via AMPlets. These could be more than a single question, all done in-place in the email.
  • Two brands can share lists in a “data clean room” and do better targeting for new customer acquisition. For example, an ad from Netflix in a Citibank mail could only be shown to those Citibank users who are not already Netflix customers. In fact, a login account offering a free period could be created in-place.

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.


Email 2.0 Ads

Search: The Search box remains one of the most powerful tools on the Internet. Be it on Google or commerce sites, it has become the starting point for research and purchases. It has never made its way into emails. With AMP, now it can. So, what would the Email 2.0 Search Ad experience be like? The Search box ad from a brand in the email footer would show the results in place. Since the email ID of the person searching would be known, the results could be personalised. This experience is only possible on a brand property today. Each item in the results could come with an “Add to Cart” option. The convenience of such an ad could be extremely rewarding for all the parties involved – the brand whose email right-of-way is being used to show the ad, the brand whose ad is being shown, and the consumer who is acting on the ad.

Sale: The next step beyond Search and adding to the cart is the Sale. Completing the transaction could also be done within the AMPlet itself. In markets where credit cards can be stored on file, a 1-click checkout is possible. In markets like India where two-factor authentication is in place, the process becomes a bit more complex and depending on the payment option, a clickthrough to a page outside the email may be needed. Either way, the AMPlet can fast-track the purchase. In fact, brands could even offer impulse purchase items where the sale could be consummated right from inside the email.

Say Yes: AMPlets can make taking a confirmation a breeze. No clickthrough, no landing page, no re-entry of the email ID. This could thus be used for lead generation or a subscription acceptance. Targeting of ads could greatly increase acceptance rates.

Survey: Brands could also do surveys easily with the interactivity possible via AMPlets. This idea could be used to take feedback, opinions or simply zero-data collection. The use of Atomic Rewards could provide the extra nudge to increase completion rates.

Second Life: Reactivation of existing customers is a big challenge for most brands. Customers become inactive after some time. In fact, most brands would probably have a third or more of their database as dormant. The lack of a hotline forces brands into spending many times more money on adtech platforms to reconstruct the relationship. A targeted ad with an incentive could bring the relationship back to life.

These five use cases are just the start. Many more possibilities are there. A bank could show an EMI or SIP calculator. OTT platforms could enable a single click addition to the watchlist for future viewing. A real estate company could show a carousel of possible options. A book seller could offer more details to accelerate the sale. A media company’s ad could show the latest headlines. The point to note is that Email 2.0 Ads become much more engaging and exciting – going beyond the standard banner or text option. It is up to the creativity of advertisers to push the envelope on possibilities combining identity and interactivity to reimagine email advertising.


Market Opportunity

Let’s do some back-of-the-envelope calculations to estimate the market opportunity for Email 2.0 ads. The valuable targetable Internet base is about 2 billion users. Each user engages with about 20-30 brands across categories. Let’s assume that each brand sends about 10-15 marketing emails in a month to each user. This comes to about 400-900 billion emails a month. Each of these emails can be a placeholder for an Email 2.0 Ad.

Current email open rates are at about 10%. Let’s assume that the Email 2.0 ideas increase open rates to 30-40%. (Who would want to say No to gamification and asset appreciation by engaging inside emails?)

So, that gives us the monetisable inventory: about 120-360 billion ads each month. Let’s just take the midpoint with some rounding off to make calculations easy – about 250 billion.

To summarise: 2 billion users, 250 billion emails which are opened (that is, they are not ignored) each month. The big question that comes next: in how many of these emails would users scroll down to the email footer and actually look at the ad? Let’s be very conservative. Maybe 5 to 10%? (Perhaps there could be an incentive to scroll down to the footer and just see the ad for a few seconds?) That gives us about 12.5-25 billion emails. Let’s go with the round figure of 20 billion emails where the recipient is opening the email and seeing the ad in the footer.

Next question: what percentage of users will engage and respond to the ad? Since the ads here are likely to be much more relevant and personalised, perhaps we can expect a 10% response rate – meaning that 1 in 10 ads is found interesting enough for a monetisation opportunity. That makes it about 2 billion ads a month, or 1 ad per user per month. That sounds quite reasonable: each of us engages with at least 1 Email 2.0 ad in a month.

What would such an engagement be worth? This would depend on many factors like the value of the user and the type of engagement. For example, a reactivated user could be worth tens of dollars. A lead for a credit card would be worth much more. If 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!


To summarise: email advertising, like email itself, has been caught in a time warp. There has been little or no innovation in the past many years. A trio of new ideas – AMP, Atomic Rewards and Email Footer – promise to transform the space by powering Email 2.0 ads, bringing relevance and revenue for the brand-customer relationship.