The Email Wars

David Baker presented with a panel of long time software guys to talk about should you build, rent (ESP) or buy a email marketing platform solution.

Dave Hendrix, Datran Media
Ryan Deutsch, StrongMail
Cliff Seltzer, puresend

56% of people are using “in-house solutions”
33% are using ESPs
39% are using an advanced ESP (dedicated IP Address)
15% utilize a hosted service and outsource full service
46% are using in house and also using hosted service
36% of marketers using in house are considering shifting to an outsourced service.

APIs are an issue with some ESPs and some don’t integrate as they should

Hosted solutions will never give you the control you need to truly integrate customer data, customer touch points and multi-channel campaign management – True or False?

Installable solutions present too many risks today, due to lack of staff, IT Group collaboration, and lack of understanding around deliverability management/ISP Relations. – True/False

Deliverability can be managed by internal teams and third party services taking the complexity of IP relations out of an in-source proposal

A CPM model for outsourcing….

Installable solutions are only viable IF key data integration issues are required – True/False
—- When infrastructure has been heavily invested in in-house, StrongMail makes a point that it makes sense. So why don’t some of these companies use enterprise solutions built into their other systems? Well it is because they do not get best of breed applications from those software providers as this is not their core competency.
—- Top 100 brands, it does not make sense to use an installed solution if you don’t have all of the staff in place and systems to manage bandwidth, IPs and other issues.
—- Datran says the CPM Model is dead. They think that whatever the solution is that they client needs is what the model should be.

By installing an email infrastructure you risk not keeping up with the market. True/False
—- Cliff: An installed solution can give you the updates but you need to pick the right one (But my thought was what is the cost of these services and upgrades? They are not free, there are some heavy costs from what I have seen, so where is the savings in the model to keep your solution up to date? )
— Dave: There is a BIG risk of buying software without managed services for installed solutions. If you lose a key employee and you don’t have some level of managed services, you are at risk. Most companies cannot handle the ISP Relations and Deliverability issues on top of email marketing and an installed solution. (Marketing Sherpa stated that if you take an installed solution you have some costs of an estimate $150,000 a year in salaries).
—- When people buy on premise, they think that they bought it once and it is over. Wrong, the pricing models are different, but there are costs to keep up with the features and updates you need to stay on top of the market.

What are the biggest pitfalls of installing software and integrating it into enterprise systems?
The Blame Game, when people try to integrate systems and do not communicate well to solve the problem.

Enterprise Messaging Systems? Why not?
The problems is that they look smart and are well presented, but 90% of the time are either not used the right way or do not deliver the true solutions to the needs of the client.
Bigger issue is that once a system like this is installed, IT ends up managing and owning it and this creates a roadblock and accessibility issue for the marketing teams. If a marketing person needs to get data, hard to request it in a timely manner.

Dave: Outsourced ESPs win every time with the marketer for access to data, segmentation, reporting, timing, etc.
Puresend: IT at times gives access issues to marketing teams if you use a hosted solution without a web interface to access data.
Dave: the CIO and not the marketing team now owns the data, the CRM and the customer lists IF they host the solution.

What are the REAL cost savings of the hosted solutions? Hosting, Bandwidth, personnel?
Cliff: there are that many hidden charges. One time costs with some sort of monthly re-occurring costs for support, upgrades and other managed services.
Dave: What are the costs of the license model? 100K to 1 million? Deliverability person cost, bandwidth provider, If you are mailing a ton of mail, a CPM model might not make sense if you are over 100 million emails a year. You will have a VERY big upfront cost in a in house solution vs an ESP. It really depends on your total email volumes, in-house team and pre-existing team knowledge.
puresend: Jupiter said the break point for many companies are 8 million emails a month to look at or consider an in-house solution. It is really not a money savings if that are you are really after.
Cliff: Largest in house client is 500 million emails a month, that makes sense at those levels. If you know exactly what you want and have services and teams to support your in-house decision then you should go forward. You need to know the costs/risks/time.

David Baker: Start thinking like a marketer and not a direct marketer and you will find what works best for you.