Email Advertising: Exploratory Insights from Finland

BRETT A. S. MARTIN University of Auckland Business School bas.martin@aucklancl.ac.nz

JOEL VAN DURME University of Auckland Business Schoolj.vandurme@auckiand.ac.nz

MIKA RAULAS Institute of Direct Marketing Excellence Helsinki School of Economics raulas@hkkk.fi

MARKO IVIERISAVO Institute of Direct Marketing Excellence Helsinki School of Economics merisavo@hkkk.fi

 

Since the advent of the internet, much speculation has ensued regarding its tangible benefits to business. This article looks at the effectiveness of email advertising to promote information to consumers. Within this email promotion context, and using data from a survey of 838 female Finnish consumers of a major international cosmetics brand, we investigate consumer perceptions of email advertising.

Specifically, within an exploratory research context we address two research questions: (1) What email advertising factors may influence visits to the company website? and (2) What email advertising factors may influence visits to a physical (i.e., bricks-and-mortar) company sales outlet? Results suggest that email advertisers should strive to generate emails that are perceived as useful. Useful emails appear to influence consumers to visit the store primarily to either buy the product or view the product firsthand, rather than visit the company website. However, as consumers could not buy the advertised products from the website, these findings should be regarded as preliminary.

Factors influencing perceptions of email advertising usefulness are explored along with limitations and future research directions.

EMAIL ADVERTISING,

where email is usvd as a vehicle for the distribution of promotional messages, is fast becoming an important advertising tool. Email advertising revenue totaled $948 million in 2001 and has been forecasted to increase by 32.91 percent to $1.26 billion in 2002 (Gartner, 2002) and to $7.3 billion by 2005 (Bcardi, 2001). indeed by 2004, marketers are predicted to send almost 210 billion email messages to consumers (Schwartz, 2000). Weil-known organizations currently using email to contact consumers include Barnes and Noble, Borders, Hcrshey Foods, and J.C. Penney {Landau, 2001; Schwartz, 2000; Weidlich, 2001).

 

Reasons suggested for the popularity of email advertising include, first, that email is cheaper than traditional direct mail with costs ranging from S5 to $7 per thousand consumer addresses, as opposed to $500 to $700 per thousand for direct mail (Gartner, 2002). Second, email advertising has been heralded as producing faster response times from consumers (Brown, 2002; Rickman, 2001). Gartner (2002) reports that consumers respond within 10 business days to an email campaign as opposed to four to six weeks for a direct mail campaign. Email advertising also allows for a rapid dissemLnation of an advertisement to a global target market. Third, email can encourage interactivity with consumers by including hyperlinks in the email (Brown, 2002; Garden, 2002).

 

These hyperlinks can invite consumers, for example, to visit the company’s website by clicking on the hyperlink in the email. Recent research undertaken by practitioners indicates that consumers are interested in email marketing. For instance, a survey by DoubleClick of 1,015 respondents reveals that 77 percent of consumers wish to receive promotional offers by email. Further, for 64 peirent of consumers, email is the most popular means to learn about new promotions, products, and services (DoubleChck, 2002). Although commercially important, however, email advertising has been relatively neglected by academic research.

 

In this article, we address this gap by exploring perceptions of email advertising using a sample of female consumers. Within this exploratory research context, we address two research questions: RQl. What email advertising factors may influence visits to the company website? RQ2. What email advertising factors may influence visits to a physical (i.e., bricks-and-mortar) company sales outlet? These research questions are examined using survey data from a sample of Finnish female coasumers. Finland is a Nordic country of 5.2 million consumers situated between Sweden and Russia. It is 130,559 square miles in size, making it similar in size to New Mexico (121,598 square miles). The rationale for studying Finnish consumers relates to their widespread use of the internet. Recent statistics reveal tliat Finland has one of the highest levels of internet penetration in the world with 43.93 percent of the population online (Nua, 2002).

 

Given the forecasts of increased email advertising by marketers, a study of Finnish consumers offers intriguing insights, especially since the international brand that provided the survey data for this study has been successfully engaged in email advertising in Finland since 2000. Thus, the insights we provide on perceptions of email advertising reflect what works for an experienced email advertiser for an international product (i.e., cosmetics), rather than the results of a novice, start-up strategy. Further, these research questions are explored in relation to permission-based email advertising that is most relevant to marketers today. Permission-based email is defined as email that has been requested by the consumer as part of an opt-in scheme (e.g., a consumer fills in their email address on a website aiid agrees to receive information of interest).

 

In effect, marketers are receiving the consumer’s permission to market to them. Permission-based emails are powerful because by signing up to an email list, the consumer is requesting the information from the advertiser rather than simply being exposed to it. Thus, advertisers can rate for permission-based emails is between five and eight percent (Gartner, 2002; Tchong, 2001). Moreover, the aforementioned Doubleclick survey suggests that over 88 percent of respondents have made a purchase as a result of receiving a permission-based email (DoubleClick, 2002). Hence, this study examines permission-based email advertising. In addition to permission-based email, there is also a growing recognition that appropriate email content plays a key role in advertising effectiveness (e.g., Carmichael, 2000; Waring and Martinez, 2002; Yager, 2001). Yet while email content as a whole is increasingly recognized as important, recommendations for what specific content advertisers should use tend Permission-based emails are powerful because .. . tbe consumer is requesting tbe information from tbe tiser ratber tban simply being exposed to it. gain greater effectiveness in the spending of their budgets as the message recipients have already indicated a level of interest in the messages.

 

Consequently, permission email advertising has been heralded as offering consumers rediiced search costs and advertisers an increased level of precision (Rowley and Slack, 2001). This form of email differs from unsolicited commercial email, also known as “spam,” which is an increasing problem for consumers accessing their email. Indeed hy 2006, the average email user is forecasted to receive 3,800 messages each year including 1,400 spam messages (Tchong, 2001). Researcli suggests that response rates for spam email stand at only 1 percent of the email sent out by advertisers, whereas the average clickthrough to be scarce and vague. For example, email content must be “targeted” (Waring and Martinez, 2002), “relevant and clear” (Carmichael, 2000), or “irresistible” (Yager, 2001).

 

An exception is Garden (2002) who suggests (1) providing relevant product information, (2) advertising special deals, and (3) offering invitations to company functions. One of the goals of this study is to explore consumer perceptions of email content to gain some preliminary insight into what specific email topics are regarded as useful. METHOD Sample The data used in this study were collected with the cooperation of the Finnish

division of a prominent cosmetics brand, iidvertising based on 200,000 mk 155 19.8 expectation-maximization metbod (Demp- Education ster. Laird, and Rubin, 1977). A posterior _Elennentary school 146 17.6_ test on tbe means and variances revealed , , , , High school graduate 129 15.6 no differences between tbe variables before and after imputation. Hence, this tech- ….[^ij^.P^pf^ssipnal studies 325 39.3_ nique did not distort tbe original data Higher professional studies 134 16.2 distribution. Finally, a iudgment decision ,, . . , ‘ ^ University degree 94 11.4 was made to remove the sole male respondent. As sucb, this study provides in- :^^?l ^?[^P’^..^i^^ 838 100.0 sights into female perceptions of email.

 

Perceptions of email usefulness were get more information about products, to amount of emails received {fi – -.862, measured by the item, “How useful do get personal assistance from a skillful sales- ;’ < .00], see Table 2). While only a preyou find the emnils received from (brand person, to buy products, and to visit a liminary finding, this suggests that the name)?” (1 = Not at all useful, 5 – Very (brand name) event. more useful an email message, and the useful). Likewise, email content interest greater the number of such emails rewas measured by the item, “What do you RESULTS ceived, the less likely consumers are to thinkabout the contents of the email mes- visit the company’s website.

Since consages?” (1 = Not at all interesting, 5 ^ Research Question 1: sumers are unable to purchase the prodVery interesting). Internet usefulness was Email advertising and website visits ucts via the company website but need to also measured by a 5-point item (1 = Not To address what email advertising factors visit a physical store, these results suggest at all useful, 5 = Very useful). Respon- may influence website visits, we per- that useful email advertising may repredents also indicated what types of email formed a hinary logistic regression that sent a reason for why people to go dimessages they regarded as very useful, analyzed factors affecting whether the com- rectly to the store and purchase. Message types included: (1) information pany website was ever visited.

Specifi- To further investigate this issue of webabout new products, (2) special sales of- cally, the dependent variable measured site visits, we performed a binary logistic fcrings, (3) information about beauty and whether respondents had visited the com- regression on the dependent variable of treatments, (4) information about interest- pany’s website via a hyperlink provided wehsite visits that were independent of email ing new make-up trends, (5) hyperlinks in the email advertising, with the alterna- advertising (i.e., website visits that were to interesting websites, (6) information tive responses of “never,” “once,” or “more not triggered by an email received by the about different upcoming events, and (7) than once.”

 

Independent variables were consumer) to provide insights of comparinformation about competitions. An open- email usefulness, amount of emails re- ison to the previous results. Thus responended question was also included for any ceived, interest generated by the email dents were categorized as visiting the category of importance that was not ad- advertising, usefulness of the internet, and website once a week oi- more, or as less dressed by this group. the importance of the company staying in than once a week.

 

These dichotomies were The amount of emails received from touch. Interestingly, this revealed signifi- chosen to distinguish between frequent the company was measured by the item, cant negative associations for email use- and infrequent visitors to the company’s “How many emails do you remember that fulness (jB = -.363, p < .05) and the website. As displayed in Table 2, signifiyou received from (brand name)?” (None, 1-4, 5-10, over 10). Perceptions of the importance of keeping in touch were mea- DI c o sured by the item, “How important is it that (brand name) is regularly in touch Binary LOgiStJC RegreSSJOn ReSUltS with you?” (1 ^ Not at all important, 5 = Independent Beta Exponential Very important).

Website visits were mea- ^^^^^^^^^ y^^.^,,,^ Variable (standard error) Value sured by the item, “Have you ever visited (brand name)’s internet pages?” (Yes, No). Website visit (emajO Email usefulriess -.363^ (.163) .696 A further variable asked how often re- Amount of emails -.862’^ (.152) .423 spondents had visited these pages (less ^^^^^^ ^.^.^ (general) Email usefulness -:719′:.(,-151) -487 than once or twice a week, once or twice , ^. ., , , ,, ^ Importance in touch -.276^ (.127) .759 a week, or more), amiilarty, wiiether store visits had been inspired by promotional Store visit Email usefulness .298^ (.103) email advertising was measured on a ^rnail interest .647″ (.113) ^P. 3-levcl item (never, once, more than once). , ^ ., n^ ^h , ^ ^ .,^ -, ^c-r Amount of emails .814”(.114) 2.257 Reasons for store visits inspired by email advertising were assessed by respondents ‘^”””- ‘^'”‘ *”””’ ‘”‘-‘^”^’•’^ “”‘.’/ -“”‘-iablct^ -with stnti^tienlli/ signifiiinii beUi eoeffidents. Vnrinbles iiietiiile internet usefuhieas. indicating how many of the followmg rea- ,,^^,^^ Mgnificaut .n p < ,05 sons were applicable: to see products, to ”BeUi significant at p < .001

 

cant negative associations were found for emails, consumers are likely to click on half of tbe respondents as being useful, email usefulness (^8 — -.719, p < ,001) the hyperlink, yet witb every following Namely, information about special sales and tbe importance of tbe company stay- email, they are less likely to visit tbe web- offerings (90.2 percent of respondents), ing in regular contact {(H =• -.276, p < site again. This could be because tbe web- new products (89 percent), competitions .05), Unsurprisingly, tbis indicates tbat if site does not cbange often, or if it does (69.2 percent), and information about an email is perceived as useful, respon- cbange, the website is not perceived to be beauty and treatments (68.7 percent).

 

Indents are less likely to find a need to visit more useful than it was tbe first time it terestingly, information on website bypertbe company website. Likewise, if a con- was accessed. We could imagine consum- links of interest were not seen as useful sumer regards it as important tbat a com- ers accessing tbe site out of initial curios- (43.7 percent). Tbese results suggest tbat pany stays in touch with tbem on a regular ity for instance, but after having visited it consumers are interested in new and timely basis, tben again general visits to tbe com- tjnce tbrougb tbe byperlink, tbey are im- information. pany website are decreased. These results likely to do so again wben additional tend to suggest tbat wben email advertis- emails are received.

 

Finally, tbe extent to Research Question 2: ing is seen as useful by consumers, tbey wbicb tbey find tbe internet in general as Email advertising and store visits do not fee! the need to visit the compa- useful has no significant effect on either For tbis researcb question, a binary logisny’s website, since tbe email is useful and visiting the firm’s website independently tic regression was performed using the provides sufficient information in tbe first (p = .39) or tbrougb a hyperlink (p — .21), dependent variable of store visits and the place.

 

Accordingly, it follows tbat consum- suggesting tbat consumers are driven by same independent variables as for reers wbo place a high importance on a tbe usefulness of tbe email message ratber search question 1, Specifically, the depencompany staying regularly in toucb witb tban a general perception of tbe useful- dent variable separated tbose consumers tbem do so because tbey find tbese emails ness of tbe internet medium as a whole, wbo bad never visited a company saies useful. This view is supported by the poly- Overall, these results suggest a furtber outlet from tbose who bad visited at least cboric correlation-coefficient between tbe question: If email advertisement useful- once.

 

As sbown in Table 2, tbis analysis importance of staying in toucb and email ness may negatively affect website visits, produced tbree significant positive assouscfulness, which is both higb and statis- wbat types of email content intiuence ciations for email usefulness {p = ,298, tically significant {r = .7S, p = .001). whetber an email is perceived as useful? p < ,05), email interest (^ = .647, p < Two other results are also of interest. As displayed in Table 3, four types of .001), and tbe amount of emails received First, wbetber email content was interest- email content are favored by more tban by tbe consumer (p = .814, p < .001). ing was not a significant predictor of Tbus, tbis preliminary finding suggests consumers visiting tbe website either in- tbat consumers may be more likely to dependently (/’ = .26) or by means of tbe TABI C O ‘^^^^^ ^ store if they perceive emails as hyperlink provided in tbe email (/’= ,63). useful and interesting, and if they have Tbis suggests tbat consumers may be goal- L.rildll O0riL6riL I ildL IVIdKeS received many email advertisements from driven and tbat tbey look for information a n Email uSefu l tbe company, tbat is useful to tbeir purposes, rather Tbis indicates that keeping in contact ,, 114 ^ c J ll Variable Percent .^, , ,, , than merely interestmg.

 

Second, tbe witb consumers by email may make conamount of emails received from the com- Special sales offerings 90,2 sumers more likely to visit tbe store dipany was also not significant (p = .16). information about new products 89.0 ^^^^ly ratber Uian visit tbe website. In Tbis suggests tbat sending out large num- otber words, tbey forego tbe website and Competitions 69.2 . , bers of emails to consumers does not make go straigbt to tbe store. Wby is this? An them any more or less likely to visit tbe Information about beauty ar\alysis of frequencies indicates tbat the company website independently. How- ….^.’^.’^..^-.”.^.^.^IT?,?.’?,!^ .??.”.7 reason wh y consumers visit a store is to ever, since tbe amount of emails received Information about different eitber buy the product (40.4 percent of from tbe company makes it less likely events 43.9 respondents) or to see the product firsttbat a consumer will visit the companv ,., ,..,,,. , ^^ -, band (40,1 percent). To a lesser degree, ^ – Website hyperlinks 43.7 ^ jr ‘ & – website via a hyperlink in an email, this consumers visit tbe store to gain addisuggests tbat after receiving relatively few i^.^yy,,[l^^.’^?.^.P..^,^^.”.^^ ^.^:?. tional product information (28.8 percent)

. . . keeping in contact with consumers by email may make consumers more iikely to visit the store directiy rather than visit the website. Consumers also visit the store for the personal assistance provided by sales representatives (19.1 percent), whereas attending in-store events (6,7 percent) do not appear to be a dominant reason for store visits. These exploratory results suggest that while much product information can be obtained by email or from the website, consumers presumably need to \’isit a store to experience other sensory aspects for an experiential product like cosmetics (e,g,, the smell of a new fragrance).

 

DISCUSSION

 

The purpose of this study was to explore consumer perceptions of email advertising. Within this exploratory context, we studied what aspects of email advertising may result in consumers visiting, first, a company website, and second, a physical (i.e., bricks-and-mortar) company sales outlet. We found that visits to the company website appeared to be less likely the more useful the email advertisement, and the more emails received by the consumer from the advertising company. Instead, consumers who viewed emails as useful were more likely to visit the physical store.

 

Our results suggest that the reason for a store visit is usually for consumers to either buy the product or to study it firsthand. As noted by Kover (2001), the web is ideally suited to products that do not involve human interaction with people or objects. In the case of cosmetics with fragrances or makeup products, such as lipstick, it is understandable that consumers visit the store to see if the product advertised by email suits them. Consumers who find emails useful appear to w^ant the company to stay in regular contact with them, suggesting that email offers advertisers the opportunity to become an important avenue for consumers to obtain information.

 

Likewise, consumers who received many email advertisements appear to be more likely to visit the store. We also found that the perceived usefulness of the internet medium as a whole had no effect on either website visits or store visits. This suggests that consumers may be goal-oriented, and that they value email ad\’ertisements that are useful, rather than merely interesting. Useful email content included special sales offerings, new products, competitions, and information about beauty and treatments. Interestingly, sending consumers hyperLinks in emails was not viewed as useful.

 

This is perhaps surprising given the suggested benefits of hyperlinks as, for example, allowing consumers to obtain more information (see, e,g,, Gallagher, Fosters, and Parsons, 2001). Our results therefore suggest a possible qualification to the benefits of offering consumers hyperlinks in the context of email advertising, Further, previous research in the field of print advertising offers theoretical support for tliis result. This research suggests that consumers consider purchase-specific advertising copy, such as information on the attributes of specific products, as more relevant than more general advertising claims, such as advertising the product class in general (Fernandez and Rosen, 2000). From this perspective, as was found in our results, email advertising copy regarding price and new product information should he viewed as more useful by consumers than general hyperlinks.

 

Limitations and future research A variety of limitations should be acknowledged. First, the sample was limited to females, which limits the generalizability of our findings. This issue is relevant given that gender differences have been found in how consumers react to advertising and process information (e.g,, Martin, 2003; Meyers-Levy and Sterntbal, 1991), Thus, our results should be regarded as an exploratory study into female perceptions of email advertising, rather than being generalizable to the wider population of internet users. Future research should examine email advertising using genderbalanced samples of males and females, and could study populations from other cultures. In addition, as suggested by a reviewer, data could be collected involving more diverse products and sampling frame. For this study we used data from a single site and single brand.

 

To improve predictive ability, researchers should employ two or three data sets from different e-commerce sites. Second, most of the items in our study were single item measures. However, multi-item measures offer the opportunity to tap differing aspects of a construct (Robinson, Shaver, and Wrightsman, 1991). Further, multi-item measures allow estimates of reliability to be calculated and the use of statistical techniques, such as structural equation modeling, to be considered (Wanous, Reichers, and Hudy, 1997). Therefore, future research should employ multi-item measures. Third, while we suggest that characteristics of email advertisements may influence consumers to visit physical stores, this finding requires qualification. It is important to note that the website in this study did not allow for on-line purchases.

 

Consumers had to visit a physical store if they wanted the product. Thus, our conclusion should be regarded as a preliminary finding, A stronger test would be provided by studying a site where consumers can choose to buy the advertised product from the company website or at a physical store and to then study what consumers choose to do.

 

This would offer interesting insights into why consumers may choose to visit a physical store even though they can buy the product on-line. The results ol this study suggest a number of intriguing avenues for future research. For example, given that the importance of the interactive capabilities of the internet appears widely accepted (e.g., Cho and Leckenby, 1999; Yoo and Stout, 2001; Yoon and Kim, 2001), a natural extension of this study would be to examine consumer email responses to email advertising. Two areas in particular are of interest. First, consumer responses to the advertiser.

 

Researchers have argued that in the digital domain, marketers and consumers can shape the content of promotional messages together (Rowley and Slack, 2001). Likewise, since liighly focused, customized communications can be beneficial to building long-term relationships (Arnold and Tapp, 2001), it would be useful to explore how an interactive email response to email advertisements aids the development of the relationship between marketers and their consumers. Second, since email offers the convenient function of forwarding messages received to other people, the forwarding of email advertisements to other consumers in terms of word-of-mouth influence and penetration should also be examined.

 

A further avenue tor future research involves the use of email advertising in conjunction with other media. Scholars have highlighted the tieed to explore the proper mix for marketers of online and traditional media (Kover, 1999; Sheehan and Doherty, 20U1). This is particularly relevant given predictions that the internet will become an important component of future Integrated Marketing Communications (Brackett and Carr, 2001). Further, research suggests that email use does not detract from the television viewing time of consumers (Coffey and Stipp, 1997), which offers the opportunity for synergistic mixes of email advertising and more traditional advertising media to be investigated, BRETT A. S. MARTIN is a senior lecturer of marketing at the University of Auckland, New Zealand, He received his Ph.D. in marketing from the University of Otago, New Zealand. His teaching interests include advertising, consumer behavior, and e^;ommerce.

 

His research has been published in journals such as Psyctiology & Marketing and ihe Journal of Advertising Research. JOEL VAN OURME is a lecturer of marketing at the University of Auckiand, New Zealand. His teaching interests include marketing strategy and marketing communications. His research has been published in journals sucli as Marketing Theory. MiKA RAULAS is a director of the Institute of Direct Marketing Excellence at the Helsinki Schooi of Economics. Finiand. His research interests include direct marketing, consumer relationship management, digital marketing channels, and electronic business. MARKO MERISAVO is a researcher at the Institute of Direct Marketing Excellence at Helsinki School of Economics, Finland.

 

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