What Is the Future of E-Mail?

An old digital format still has plenty of life left

Two-thirds of adult respondents said they preferred e-mail for communicating with businesses. Just as many—and this is the important part—said they expected to still prefer e-mail five years from now.

"Far from being eclipsed by Web 2.0 and other emerging communications methods, consumer expectations suggest that e-mail will be the workhorse channel around which future online communications will revolve," said Des Cahill, CEO of Habeas, in a statement.

That is not to say that consumers are ready for random, untargeted e-mail. Opt-in is still key. Consumers are even willing to help marketers custom-tailor their messages. More than 88% of respondents said they would like more choices in e-mail content and frequency, including options on advertisements and special offers.

So if e-mail is set to remain a consumer favorite for the next several years, that must mean e-mail ad spending will grow during that time, right?

Yes and no.

eMarketer predicts that e-mail ad spending in the US will hit $492 million this year, then increase by 55% to $765 million by 2012.

And while e-mail accounts for only about 2% of all online ad spending, eMarketer predicts that percentage will actually drop to only 1.5% of online ad spending in 2012, despite the growth in dollars spent. The amount spent on other formats will dwarf what is spent on e-mail, thanks to its low cost.

E-mail is cheap marketing. The pricing scales well, too: The cost of sending a million e-mails is little more than the cost of sending a thousand. However, this can also cause problems.

"E-mail is so inexpensive that it lulls many marketers into underestimating its influence on entire campaigns and a company's brand," said David Hallerman, senior analyst at eMarketer.

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