More is not always better when marketers engage in e-mail campaigns. For a certain group of consumers, receiving more promotional e-mails  means pressing the delete key more often.  One study shows that over 70% of marketers keep these consumer names on e-mail lists for up to 2 years even though the messages are never opened.

The study, conducted by Return Path, highlighted the missed opportunities to win back a customer on the part of some of the country’s largest retailers. Many of the retailers in the study continued to bombard non-responsive consumers with e-mail, sometimes up to 8 times a week.  A wiser strategy would be to first identify inactive subscribers. Marketers should then decrease e-mails directed to these subscribers. An additional strategy is to send a ‘win-back’ or promotional message. When all else fails, a marketer can notify the subscriber that e-mails will stop unless it hears otherwise.

Taking these steps can help marketers improve their  results. Writing for Internet Retailer, Katie Deatsch points out that non-responsive subscribers “dilute e-mail response patterns, skew metrics and make optimization more difficult.”  Marketers may soon be adjusting their e-mail campaigns in order to reduce costs and avoid contributing to the deluge of communications that results in some transmissions ending up in the spam folders.

[Source: Deatsch, Katie. Many retailers keep sending e-mails. InternetRetailer.com. 24 Aug. 2010. Web. 1 Sept. 2010]

As the IPO market starts to show signs of life, investors and marketers will be closely watching what happens with Skype’s planned offering. The company filed its S-1 form earlier this month.  Skype is yet another player in the online universe with plans to make money by convincing consumers and businesses to upgrade from the free services they’ve been enjoying. In this case, it’s all about expanding its user base and getting them to pay for features such as ‘group video calling’.  And yes, there’s another plan to make money – advertising.

The company claims to have 560 million users globally. And in the first 6 months of 2010, Skype recorded $406.2 million in revenue. Assuming this growth rate continues, Skype would be approaching nearly $1 billion in annual revenue.  Currently, only 7% of users actually generate revenue for the firm.  So it makes sense that Skype is looking to other sources of revenue. According to the firm’s S-1 form, it generates “ a small portion of our net revenues through marketing services (such as advertising) and licensing, which we expect will grow as a percentage of our net revenues over time.” One revenue generating tool linked to advertising is named Click & Call  which “allows businesses to market their products or services selectively to our user base.”  A local advertiser paying for a highlighted phone number to appear in search results can receive calls placed by potential customers directly from their computers. Skype is also expecting to launch a display advertising product.

Writing for Fortune, Jessi Hempel estimates that Skype’s ad revenues could reach $200 million. She notes, “the real advertising play for Skype comes in new formats, many of which don’t yet exist.” As the Web 2.0 industry matures, competition for consumer attention will increase. Marketers may find that advertising via a company that provides a tangible service such as Skype may provide better returns than some of the other options out there.

[Sources: Hempel, Jessi. “Skype’s $200 million ad opportunity.” Tech.fortune.com. 11 Aug. 2010. Web. 27 Aug. 2010; United States. Securities and Exchange Commission. Skype: S-1.  Edgar Online. 2010. Web. 26 Apr. 2010]

After suffering a slowdown along with the rest of the ad industry during the recession, social networks are on a growth trajectory this year. And this sector is growing both in the U.S. and in foreign markets. By 2011,  the $2.17 billion spent on social networks in foreign markets will comprise 50.9% of global spending while the U.S. will have 49.1% or $2.09 billion of the total.

eMarketer analysts expect to see spending on social networks in the U.S. reach $1.68 billion in 2010. This represents a 20.3% increase over the $1.4 billion spent on this format last year. These numbers were revised up from the December 2009 projection of $1.3 billion.

The industry leader in the social networking arena, for now, is Facebook. The company is expected to collect over $1 billion in 2010 ad revenues. A key factor in the company’s growth has been its self-serve ad system that “ allows advertisers to create small ads that appear on the right-hand side of Facebook pages and then target the ads to segments of the Facebook audience.”  Other major players include MySpace and Twitter. For now, MySpace traffic has been sliding and Twitter has just begun to monetize its business model through advertising.

Writing for eMarketer, Debra Williamson points out that “Facebook is asserting itself not only as a social-networking giant but also as a real rival to Google, Yahoo! and Microsoft.”  The continued interest in the social networking channel means marketers are likely to shift more resources to this format in 2011 and beyond.

[Sources : Williamson, Debra Aho. Facebook Is Closing the Ad Revenue Gap with the Portals. eMarketer.com. 23 Jun. 2010. Web. 24 Aug. 2010. Social Network Ad Spending to Approach $1.7 Billion This Year. 16 Aug. 2010. eMarketer. Web. 23 Aug. 2010]

Last month, I highlighted WebVisible’s study on 2^nd quarter paid search trends by small and medium sized businesses (SMBs). The report showed a 159% increase in spending over 2009. And back in March, the Search Engine Marketing Professional Organization (SEMPO)  reported that the paid search market will reach $16.6 billion by the end of this year.

But the metrics of paid search could be changing. Over half of agencies and advertisers remarked that Google is becoming more expensive. Yahoo and Bing, which command smaller parts of the market, had fewer complaints about rising costs but CPC (cost per click) can easily become a significant part of any advertiser’s online marketing budget.

The higher rates may be particularly troublesome for SMBs.  Metrics released by PM Digital for July 2010 showed that advertisers were paying 10% more for CPC when compared to 2009. Suzy Sandberg, president at PM Digital, points out that larger companies can afford to pay more for CPC and essentially drive lower-bidders placement to the less-advantageous 2^nd or 3^rd page of results.

At the same time, SMBs may be having a harder time counting on a reliable source of traditional advertising help: co-op. According to Sandberg, “[t]here’s a lot of co-op dollars starting to flow, which they [larger businesses] use to fund paid-search campaigns. The ones that don’t get the co-op dollars are the direct-to-consumer retailers that can’t compete at the same level.”

To better compete, SMBs may be looking to excel in display advertising or to take advantage of the new features that search engines regularly introduce. Being the first to use new ad technology may give the smaller competitors an edge when they try to gain attention in the online marketplace.

[Sources: SEMPO State of Search Engine Marketing Report. SEMP.org. 25 Mar. 2010. Web. 16 Aug. 2010; Rewind Paid Search Performance Index: July 2010. Web. 16 Aug. 2010; Sullivan Laurie. Rising Search CPCs Cutting Out SMBs. Online Media daily. 5 Aug. 2010. Web. 16 Aug.  2010]