E-mail marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fund-raising messages to an audience. In its broadest sense, every e-mail sent to a potential or current customer could be considered e-mail marketing. However, the term is usually used to refer to:

• sending e-mails with the purpose of enhancing the relationship of a merchant with its current or previous customers, to encourage customer loyalty and repeat business,
• sending e-mails with the purpose of acquiring new customers or convincing current customers to purchase something immediately, and
• adding advertisements to e-mails sent by other companies to their customers.

Advantages

E-mail marketing (on the Internet) is popular with companies for several reasons:

• An exact return on investment can be tracked (“track to basket”) and has proven to be high when done properly. E-mail marketing is often reported as second only to search marketing as the most effective online marketing tactic.
• Organizations can reach substantial numbers of e-mail subscribers who have opted in (i.e., consented) to receive e-mail communications on subjects of interest to them.
• Over half of Internet users check or send e-mail on a typical day.

Opt-in e-mail advertising

Opt-in e-mail advertising, or permission marketing, is a method of advertising via e-mail whereby the recipient of the email/advertisement has consented to receive it. This method is one of several developed by marketers to eliminate the disadvantages of e-mail marketing.

Opt-in e-mail marketing may evolve into a technology that uses a handshake protocol between the sender and receiver. This system is intended to eventually result in a high degree of satisfaction between consumers and marketers. If opt-in e-mail advertising is used, the material that is e-mailed to consumers will be “anticipated”. It is assumed that the consumer wants to receive it, which makes it unlike unsolicited advertisements sent to the consumer. Ideally, opt-in e-mail advertisements will be more personal and relevant to the consumer than untargeted advertisements.

With a foundation of opted-in contact information stored in their database, marketers can send out promotional materials automatically—known as Drip Marketing. They can also segment their promotions to specific market segments.

Legal requirements

The CAN-SPAM Act of 2003 authorizes a US $16,000 penalty per violation for spamming each individual recipient. Therefore, many commercial e-mail marketers within the United States utilize a service or special software to ensure compliance with the Act. A variety of older systems exist that do not ensure compliance with the Act. To comply with the Act’s regulation of commercial e-mail, services typically require users to authenticate their return address and include a valid physical address, provide a one-click unsubscribe feature, and prohibit importing lists of purchased addresses that may not have given valid permission.

The CAN-SPAM Act was updated with some new regulations including a no fee provision for opting out, further definition of “sender”, post office or private mail boxes count as a “valid physical postal address” and definition of “person”. These new provisions went into effect on July 7, 2008.