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

• Sending emails with the purpose of enhancing the relationship of a merchant with its current or old customers and to encourage customer loyalty and repeat business.
• Sending emails with the purpose of acquiring new customers or convincing old customers to buy something immediately.
• Adding advertisements in emails sent by other companies to their customers.
• Emails that are being sent on the Internet (Email did and does exist outside the Internet, Network Email, FIDO etc.)

Researchers estimate that US firms alone spent $400 million on email marketing in 2006

Advantages

Email marketing (on the Internet) is popular with companies because:

• The advantage of a mailing list is clearly the ability to distribute information to a wide range of specific, potential customers at a relatively low cost.
• Compared to other media investments such as direct mail or printed newsletters, it is less expensive.
• An exact Return on investment can be tracked (“track to basket”) and has proven to be high when done properly. Email marketing is often reported as second only to search marketing as the most effective online marketing tactic.
• It is instant, as opposed to a mailed advertisement, an email arrives in a few seconds or minutes.
• It lets the advertiser “push” the message to its audience, as opposed to a website that waits for customers to come in.
• It is easy to track. An advertiser can track users via web bugs, bounce messages, un-subscribes, read-receipts, click-throughs, etc. These can be used to measure open rates, positive or negative responses, correlate sales with marketing.
• Advertisers can generate repeat business affordably and automatically
• Advertisers can reach substantial numbers of email subscribers who have opted in (consented) to receive email communications on subjects of interest to them
• Over half of Internet users check or send email on a typical day.
• Specific types of interaction with messages can trigger other messages to be automatically delivered.
• Specific types of interaction with messages can trigger other events such as updating the profile of the recipient to indicate a specific interest category.
• Green – email marketing is paper-free

Disadvantages

Many companies use email marketing to communicate with existing customers, but many other companies send unsolicited bulk email, also known as spam.

Illicit email marketing antedates legitimate email marketing, since on the early Internet (see Arpanet) it was not permitted to use the medium for commercial purposes. As a result, marketers attempting to establish themselves as legitimate businesses in email marketing have had an uphill battle, hampered also by criminal spam operations billing themselves as legitimate.

It is frequently difficult for observers to distinguish between legitimate and spam email marketing. First off, spammers attempt to represent themselves as legitimate operators, obfuscating the issue. Second, direct-marketing political groups such as the U.S. Direct Marketing Association (DMA) have pressured legislatures to legalize activities which many Internet operators consider to be spamming, such as the sending of “opt-out” unsolicited commercial email. Third, the sheer volume of spam email has led some users to mistake legitimate commercial email (for instance, a mailing list to which the user subscribed) for spam — especially when the two have a similar appearance, as when messages include HTML and flashy graphics.

Due to the volume of spam email on the Internet, spam filters are essential to most users. Some marketers report that legitimate commercial emails frequently get caught by filters, and hidden; however, it is somewhat less common for email users to complain that spam filters block legitimate mail.

Companies considering an email marketing program must make sure that their program does not violate spam laws such as the United States’ CAN-SPAM Act (Controlling the Assault of Non-Solicited Pornography and Marketing Act), the European Privacy & Electronic Communications Regulations 2003 or their Internet provider’s acceptable use policy. Even if a company follows the law, if Internet mail administrators find that it is sending spam it is likely to be listed in blacklists such as SPEWS.