E-mail marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fundraising messages to an audience. Essentially, every e-mail sent by a firm to a potential customer or investor is considered to be e-mail marketing. The term is generally refered to in four forms:

  • Sending an e-mail with the purpose of improving the relationship of the merchant with current or previous customers. This could include encouraging customer loyalty to repeat business transactions.
  • Sending an e-mail to acquire new customers or to convince current new customers to purchase a new product or service offered.
  • Attaching an advertisement to another companies e-mails.
  • Sending e-mails to e-mail accounts not on the internet such as network e-mail or FIDO.

Researchers estimate that United States firms alone spent US$400 million on e-mail marketing in 2006.

There are many advantages of using e-mail as a marketing tool. It is very popular, especially with medium to large companies, for several reasons:

  • The mailing list provides the ability to distribute information to a wide range of specific, potential customers at a relatively low cost.
  • In comparison to other media investments such as direct mail or printed newsletters, e-mail is much less expensive.
  • E-mail has very short delivery time, i.e. seconds. However, mailed advertisments can take up to one or two days.
  • E-mails are very easy to track and can be resent, edited and sent to other customers with very little difficulty.
  • Repeat business  can be obtained affordably and automatically.
  • Advertisers can target specific people who have opted in to the e-mail or have registered an interest in their activity somewhere online.
  • Over half of Internet users check or send e-mail on a typical day.
  • E-mail marketing is paper-free. This makes the process much more cost effective and green.

Opt-in e-mail advertising is a method of advertising via e-mail whereby the recipient of the advertisement has consented to receive it. This will generally consist of a database of recipitents who have asked to receive the weekly or monthly newsletter.

If opt-in e-mail advertising is used, the material that is e-mailed to consumers will be anticipate and most commonly well-received. 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. This is generally quite hard to achieve though, as the e-mail databases for large firms tend to be extensive.

A common example of permission marketing is a newsletter sent to an advertising firm’s customers. Such newsletters inform customers of upcoming events or promotions, or new products. In this type of advertising, a company that wants to send a newsletter to their customers may ask them at the point of purchase if they would like to receive the newsletter.