Live Intent, a 2016 Inc 500 Honoree and one of the fastest growing email advertising platforms in the world with a reach of 140 million subscribers , recently wrote a case study on Rainmaker Ad Ventures’ success on their platform “highlighting” one campaign that achieved a 42.4% opt-in conversion rate and generated over 86,000+ leads (and counting!).
How to Massively scale your business in 2016 with Email Advertising.
There’s a rumor, it seems, that email advertising is dead…
As the founder of an Inc 500 company with over $100 million dollars in media buying experience and dozens of email advertising clients, I can assure you that email is not only alive and well, but is actually BOOMING now more than ever…
But don’t just take my word for it…
According to Experian’s latest 2015 Email Benchmark Report, not only was there a 24.8% increase in email volume last year, but also measurable increases in other key email metrics including open rates, transaction rates and revenue per email.
Clearly, email is FAR from dead!
If you’d like to take advantage of this booming channel like so many multi-million dollar advertisers do, then READ ON because I’m about to reveal everything you need to know to get started with email advertising , including:
- The difference between email advertising and email marketing.
- Why you should consider including email advertising in your media mix.
- How to find and vet lists
- Three main components to email advertising success
- The key optimization metrics to focus on
- The top 3 creative formats to test, along with the pros & cons of each.
Email Advertising vs Email Marketing
First, let’s clarify the terminology: email marketing and email advertising are actually two very different things.
Email marketing is when you use your own email list to promote your products and services and/or related affiliate offers to your existing subscribers and customers.
Email advertising, in contrast, is when you advertise to other people’s mailing lists or newsletters in order to acquire new leads and customers.
Example: You purchase a “dedicated” or “solo” email drop from Golf Channel and they send an email out to their subscribers that begins with an intro header or paragraph saying something like, “Golf Channel presents our sponsor of the day: XYZ advertiser”, followed by your ad which could be a graphic, text or a combination of the two (it’s totally up to you) as well as links to your website landing page.
Why You Should Consider Email Advertising
There are three reasons to include email advertising in your media mix which can be summed up by the following quotes:
- “If you want to catch fish, fish where the fish are”
- “Never put all your eggs in one basket”
- “All media works at the right price”
What do these quotes have to do with email advertising?
First off, there are over 2.5 billion email users worldwide (and growing) and a significant percentage of these users check their email at least once a day, if not several times a day (or even continuously). Everyone is addicted to email! Therefore, its an absolute no brainer to “fish where the fish are” and advertise to your prospects in the channel they’re already looking at and interacting with daily.
Second, I believe far too many businesses have all their traffic eggs in the Google or Facebook baskets. While there’s no doubt you can scale big with these networks, I’ve also seen many companies nearly go out of business when they were suddenly slapped or even banned by the big G or FB and had no other consistent and reliable advertising channels in play. Luckily, email is the most lenient of all channels in terms of compliance, so it’s an ideal backup source, especially if you have a controversial offer or are in a highly scrutinized niche.
Third, a mentor of mine once told me that “all media works at the right price.” Translation: Any advertising source can work at the right price and email is probably the most negotiable of all the online advertising channels because prices are agreed to with human beings rather than competitive computer bidding systems, so you can often negotiate the “old fashioned way” to get the price you need in order to make your campaigns work.
Bottom line: it makes sense to diversify your traffic portfolio into multiple channels in order to achieve the maximum scale (and minimize risk) and email is an extremely viable channel for all the reasons listed above.
Just to give you an idea what’s possible, over the past 2+ years, we’ve generated over 2.5 million leads and $25 million+ in sales for a single client almost entirely via email advertising. So clearly there’s significant OPPORTUNITY for scale with email advertising.
Pro Tip: Almost 50% of emails are now opened on a mobile device.
Are your emails, and your websites, mobile-friendly? If they’re not, they need to be!
How renting an email list works
There are literally thousands of publishers and list owners that will happily rent their subscriber lists. You simply negotiate a deal over the phone and then sign an insertion order agreement with the publisher that specifies the mailing date, list size and price you’re going to pay for the email drop. Once the deal is secured, you send the publisher the subject line, creative and tracking link that you want them to mail and they set it up in their system and send you a “test” or “proof” for pre-approval a few days ahead of the drop. Once you approve, they cue it up and send your advertisement out to their list on the agreed upon date and time.
Just to be clear, when their readers get your advertisement, it’s received FROM the newsletter/list owner/guru that the subscriber knows and trusts. This “warm” introduction lends credibility to your offer and one reason why it can be extremely effective for lead generation or direct sales.
How to Find & Vet Lists
Finding lists for email advertising is pretty straightforward
Unless you’re getting recommendations from a media buying agency like mine that already knows and has tested hundreds of lists, Step #1 to finding your own good lists to rent is as easy as searching Google for the top authority web sites in your niche.
For example, you could type “Golf” into Google and the top organic listings would include sites like Golf.com, GolfChannel.com, GolfLink.com, GolfDigest.com etc.
Simply visit each of the sites you find and look to see if they have a “subscribe” or “newsletter” opt-in box anywhere on the page. If they do, you know they have a list and you simply need to inquire whether they rent their list.*
*Note: Typically, you can find this out by looking for a link at the bottom of the site for “advertising” or “media kit”. If you can’t find advertising information on their website, then click on the “contact us” section of the site and reach out to them directly.
Definitely do not get discouraged if some of the major publishers in your niche don’t rent their lists, are too expensive or have minimum buys too hefty for your comfort. There are often a bunch of second tier sites with good quality, decent sized lists that you can negotiate great deals with (even if they don’t currently rent their list**.).
**Side-note: I can’t tell you how many mutually beneficial advertising deals I’ve done over the years with sites that never previously rented their list before. In fact, if you have your own list, you can often negotiate “swaps”… so keep an open mind when approaching publishers (anything’s possible when it comes to putting money in their pockets!)
Okay, so once you’ve discovered a bunch of potential lists to buy, the next challenge is how to determine whether a list is good or not (i.e. how to “vet” a list).
Of course, you want to be sure the demographics of any list map nicely to your target audience (e.g. Don’t mail a pregnancy offer to a list of senior citizens),… but, unfortunately, there are no guarantees with advertising and the only true way to vet a list is to TEST it (I suggest testing as small as you can and only scaling to larger drops once you’ve achieved a positive ROI on your initial tests).
Cost of Email Advertising
You can typically test most email lists for around $2,500 (sometimes less, sometimes more, depending on the size of the list and the publisher requirements).
Most publishers charge on a CPM basis., which stands for Cost Per Thousand (M = 1,000 in Roman Numerals). In other words, they charge a cost per thousand names they send your message to. So, for example, if they have 100,000 subscribers and charge $10 CPM ($10 per thousand), that means it will cost you $1,000 to rent that list (e.g. 100,000 emails divided by 1000 = 100. Then multiply 100 x $10 per thousand = $1,000).
*Note: You can sometimes negotiate deals on a CPC (cost per click) or on a CPO (cost per open), but that doesn’t necessarily mean they’ll perform better unless you’re very strategic about the type of creative you use (e.g. with CPM, it doesn’t matter whether you get 1 click or 10,000 clicks, the price you pay is the same. With CPC, you can lose your shirt if your ad clicks like crazy, but doesn’t convert that well. So you need to be careful about what you negotiate and which type of creative you use depending on how you’re paying.).
Pro Tip: Don’t Judge a List by its Price!
The quality of an email list can vary significantly depending on how old the names are, how frequently it’s mailed, it’s deliverability rates etc. I’ve had success mailing lists at a $50 CPM and failed miserably mailing at a $1 CPM, so definitely keep in mind that a “good price” is specific to the quality of each list and the only way to find out is to TEST. That said, typically CPMs in the $1-$10 range work best for “subscriber lists”, whereas “buyer lists” (e.g. people who’ve previously purchased products in the niche) can often perform well at 3 to 5 times the CPM of a subscriber list.
Three Main Components to an Email
There are three main components to any email ad that impact its performance. By simply paying close attention to each of these, you can identify any bottlenecks that are impeding your results and optimize accordingly.
1. The Subject Line
The subject line is arguably the most important part of the email because if you people don’t open your email, they can’t see your ad or visit your website. The key success metric for your Subject Line is the “open rate” (e.g. the percentage of people the message was emailed to who actually open the email. (Mail 100,000 emails, get 10,000 opens and you have a 10% open rate).
A good subject line might see open rates of 10%-15% or even higher. A poor one in the 1-5% range. So if you’re achieving weak open rates, you can drastically improve results simply by writing some new, catchier subject lines. Make sense?
Subject Line Strategies: Dos and Don’ts
Be Careful with tricking people into opening…
While it might seem like a great idea to mention Kim Kardashian or Barack Obama in your subject line, and indeed this will typically increase your open rates, you’ll typically get lots of opens, but few conversions if your offer has nothing to do with those celebs, so try to keep the subject lines relevant to your offer.
Do Ask Questions, Be Outrageous and Tease People!
People are naturally curious, so even though they may be bombarded with a barrage of emails every day, if you write great subject lines, you can entice them to open up and look inside, so here are a few tips to make your subject lines stand out from all the clutter:
- Ask compelling questions (Is Your Boyfriend Cheating On You?)
- Offer them something totally offbeat (1 Sneaky Golf Trick to Add 30+ Yards…)
- Tease them (Whyyou’re still fat (it’s NOT what you think)…)
- Agitate them (The #1 Mistake You’re Making with Your Retirement…)
- Educate them (#1 ItemYou Should Be Hoarding in 2016)
- Command them (DO THIS Before you File Your 2015 Taxes…)
- Alert them (Warning: 3 Fruits To NEVER Eat…)
2. The Creative
The actual ad inside the email is referred to as the “creative” and can be in the form of “text only” written copy or a banner like graphic or a combination of text and images.
The key success metric for the creative is the click-through rate or CTR . Obviously, the more people that click on the links inside your email, the more chances you have to convert those clicks into leads or sales. A well-executed creative will typically achieve a 10-20% click rate or even higher.
Typically, the shorter the creative, the higher the CTR. The longer the creative, the lower the CTR. However, the more pre-selling you do (e.g. longer copy), the better your conversion rate typically will be. So you need to determine whether you want quality or quantity and this is highly correlated to what type of pitch you have on your landing page.
For example, if you have a 38 minute video sales presentation on your lander (known as a VSL), you don’t need to do a lot of selling in the email, so a short curiosity based email will get you the most clicks and your VSL can do the selling.
Conversely, if you’re sending people to a short opt-in page or an e-commerce order page, you’re probably going to want to do more pre-selling in the email, so they’re ready to take action when they get to your website.
Here are three main creative formats you should consider testing:
By definition, email is electronic “mail” and people are already conditioned to receive letters every day in their email, so beginning your ad with a “Dear __________ (reader, friend, retiree, investor etc.)” is a natural way to start an email that people are receptive to. In fact, often, the more casual and personal you make the letter feel (just like you’d actually write to a friend), the better it may perform. Seriously, sometimes all you need is a few sentences of very short, punchy “curiosity” style copy that ends with a blue hyperlink to your offer to get HUGE clicks.
More formal letters can also work. So the decision to go more “personal” or more “formal” simply depends on what you’re selling and how you want to be perceived (e.g. as a friend, as an authority, as a brand etc.).
Just as people are used to reading letters addressed to them, they’re also accustom to reading News Headlines and articles, so taking a news approach and starting with a big bold headline at the top, followed by a few paragraphs of compelling copy can also work very well.
Large format banners can also work well for a product or service that doesn’t require a detailed sales pitch (e.g. a fashion product or a diet product where the before and after picture says it all). A standard banner size for email is a large 550×500 square, but people also respond to a combination of text and compelling images (typically, the more outrageous the image the better).
Pro Tip: A/B Split Test For Best Results
Most publishers will allow you to run A/B split tests on creatives, so if you’re just starting out, it’s a smart idea to test more than one creative. Options: You can either test different copy and hooks with the same format (e.g. two different letter style creatives) or you can test two totally different formats on the same copy/hook (e.g. a short format vs. a long format)
3. The Call to Action
The call to action or CTA is simply where you ask the reader to take some action (e.g. Click here to download a report, to subscribe to a list, to watch a video, or to buy your product or service). This is a critically important component of every email advertisement.
*Note: You can repeat the call to action several times throughout a letter style ad (e.g. multiple blue hyperlinks) if your goal is simply clicks or you can just use it once at the end the letter if you want to make sure they read your entire pre-sell message before visiting your website.
Typically a good opt-in rate for a paid email ad campaign will be in the 10-20% range (or higher) and a good sales conversion will be in the 1-3% range.
The final key success metric that matters for email campaigns is the “conversion rate” or CR (i.e. The percentage of people who take the action you want after clicking (e.g. buying or subscribing)).
Although the call-to-action as well as the subject line and creative all influence the conversion rate, it is actually the landing page and/or funnel where the big opportunity lies to improve the conversion rate. There’s a ton of information around the web about conversion rate optimization, so I’m not going to go any deeper on this topic, but you’ll see why it’s important to understand all the key optimization touch points in the next section…
Understanding the metrics of email
Now let’s run through some hypothetical scenarios. Let’s say you run a test campaign for $2,000 to a list of 200,000 readers and you’re selling a $100 product. If you get a 10% open rate (OR), that equates to 20,000 opens. Then let’s assume that 10% of those people like the ad enough to click over to your website (CTR) – that’s 2,000 visitors. Now let’s say you get a 1% conversion rate (CR) on your $100 offer. That’s 20 buyers x $100/ea, which equals $2,000 in sales or BREAKEVEN.
In this scenario, to go from breakeven to profitable, you simply need to move the needle on any of the three key metrics (the OR, the CTR or the CR) and you’ll be in the black.
For example. Improve your Open rate from 10 to 15%, and now you’re getting 30,000 opens instead of 20,000. Even if your CTRs and CRs stay the same, that alone get you to 3,000 clicks and 30 sales or $3,000 in revenue vs. $2,000 in the previous example. The same goes for the CTR. If you just increase the CTR from 10 to 15%, you’ll also see a lift… e.g 20,000 opens x 15% CTR = 3,000 clicks and 30 sales for $3,000. Or if you increase your conversion from 1 to 1.5%, that increases sales on 2,000 clicks to 30 and $3,000. So any one of the three can get you in the black.
Now IF you’re able to increase ALL three metrics, there’s actually a compounding effect: E.g. If you’re able to achieve a 15% Open Rate and 15% CTR and 1.5% CR, you’ll get 30,000 opens, and 4,500 clicks and 68 sales for $6,800 in revenue and 3.4X return on ad spend!
To review, here’s are the numbers I just described:
200,000 x 10% OR = 20,000 x 10% CTR = 2,000 x 1% CR = 20 x $100/ea = $2,000
Improve one metric by 50%:
200,000 x 15% OR = 30,000 x 10% CTR = 3,000 x 1% CR = 30 x $100/ea = $3,000
200,000 x 10% OR = 20,000 x 15% CTR = 3,000 x 1% CR = 30 x $100/ea = $3,000
200,000 x 10% OR = 20,000 x 10% CTR = 2,000 x 1.5% CR = 30 x $100/ea = $3,000
Improve all three metrics by 50% (Compounding Effect!):
200,000 x 15% OR = 30,000 x 15% CTR = 4,500 x 1.5% CR = 68 x $100/ea = $6,800
Now that you understand how to measure the three key metrics of an email advertisement, you can easily identify opportunities for optimization. So, for example, if you’re getting solid opens and clicks on a campaign, but a poor conversion rate, you’ll know that you need to improve your landing page or funnel. Or if you’re getting great opens, but weak clicks, you’ll need to improve your creative etc. Or if nobody’s opening, then you need to test new subject lines. The data will always tell you what needs to be optimized and with a few tweaks and a little testing, you can turn a losing campaign into a winning one!
The Bottom Line
Email advertising is a highly effective way to generate additional leads and sales, so if you’re looking for additional scale and diversification for your online business in 2016, I recommend you include email advertising in your media mix.