E-MAIL FLOOD WARNINGS

NEW YORK — E-mail is multiplying at astronomical rates, and it’s straining America’s attention span.
That’s the latest finding from Jupiter Communications Inc., a leading Internet research company, which predicted Monday that the commercial e-mail market will soar to an estimated $7.3 billion in 2005, cannibalizing direct mail revenues by 13 percent.
Jupiter predicts that U.S. consumers will see an estimated 40-fold increase in e-mail volume and advises that businesses improve the e-outreach.
“E-mail is a cost-effective and high-response rate vehicle by which to acquire and retain consumers, sell and promote products, drive loyalty, and reinforce branding efforts,” Jupiter said in its statement Monday. “In fact, many Internet commerce and content ventures have made e-mail the must-have communications vehicle.”
Because of swift time-to-market and strong return on investment, Jupiter estimates that commercial e-mail spending will grow from $164 million in 1999 to $7.3 billion in 2005. However, the volume of e-mail will strain consumers’ attention spans, according to the statement. The average number of commercial e-mail messages that U.S. consumers receive per year will increase from 40 in 1999 to over 1,600 in 2005; non-marketing and personal correspondence will rise from roughly 1,750 in 1999 to almost 4,000 in 2005.
As competition rises, companies face two challenges: maintaining a high response rate and maintaining a high quality dialog with consumers.
Businesses are beginning to perceive e-mail marketing as the silver bullet for acquisition and retention strategies; its fast, cost-effective and gets instant feedback, explained Michele Slack, senior analyst with Jupiter. As a result, the volume of opt-in commercial e-mails continues to rise “at a furious pace.”
“However, consumers will not have the resources or tolerance to maintain the high response rates that are driving businesses to e-mail in the first place. Businesses must focus on delivering value from the first e-mail contact, because opt-out is just a click away.”
Research also revealed that 65 percent of companies are spending between 1 and 5 percent of their marketing budgets on e-mail marketing; 22 percent spend over 5 percent currently.