Email marketing may not be dead, but is it moving in a new direction?

Profile picture for user barb.mosher By Barb Mosher Zinck June 22, 2016
Summary:
Email marketing is at a data personalization crossroads. How can companies personalize email data when that data is spread across cloud and on-premises? And what about data security concerns? As Barb Mosher Zinck reports, Dan Roy of MessageGears thinks he has an answer.

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It seems like everyone is in a rush to move their business to the cloud. Shift all their data out to SaaS applications or managed services and never look back. This is certainly true in the email marketing space.

But there are still reasons not to move data off premises. Big, potentially expensive reasons. So where does that leave organizations who want to do email marketing, but don’t want their customer data sitting out in the cloud? Maybe it’s time for a new approach.

Let me introduce you to Dan Roy

Roy is a technologist. He spent a number of years on the business end of technology, including a stint at Delta Airlines where he helped build out its website and ecommerce platform. It was at Delta that Roy was first introduced to email marketing working with on premises vendor Accucast.

Roy left Delta, did some other things, then joined Accucast as its CTO. During his time at Accucast, he worked with some big companies and became very familiar with enterprise needs for email marketing, along with their challenges, such as accessing the data needed.

Because Accucast was on premises, it had the ability to connect easily with internal data systems. But Roy said it also had challenges related to on premises - the need for a full IT infrastructure and support team. Email servers, Roy said, are particularly hard to manage, especially by general technologists. Most companies don’t have skills in-house for managing deliverability and ISP relations.

Accucast watched as cloud-based email marketing vendors started entering the market and decided to create a SaaS version of its email marketing platform. Roy said they quickly became just one in the crowd and lost their differentiator - the direct connectivity to internal data that enterprises wanted to keep behind the firewall.

It was then that Roy realized there was a better architecture for email marketing. One that left the customer's’ data behind the firewall, where it was” safe and secure, and it was complete and accurate”, and move the delivery system into the cloud, allowing the two to communicate via a secure API.

This hybrid approach to email marketing is the basis of Roy’s current venture: MessageGears.

A short history of MessageGears

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Dan Roy

MessageGears started six years ago with the goal of building a hybrid email marketing platform that was different from other vendors such as ExactTarget, Responsys, or StrongView. It caters to Big Data organizations and sophisticated data-savvy marketers who want to leverage all their in depth customer data but didn’t want to take that data into the cloud or bring their email servers in-house.

It originally started out with the development of the cloud-based delivery system. Roy said to think of it like a SendGrid or Amazon SES where it can do bulk jobs, but also transaction-based messaging.

Then two years ago, MessageGears added the marketing application. This part of the platform is an on premises application. It runs on a single server and has a small footprint. It connects directly to the customer database and accesses the cloud-based delivery tier via a secure API. From the end user’s perspective, MessageGears looks like any other email marketing solution, but behind the scenes, it’s much different.

Although email right now, MessageGears recently picked up some funding to help it build a multi-channel solution that includes SMS, mobile push and text-to-speech message in future roadmaps.

Will hybrid save email marketing?

Email marketing is far from dead, despite what some may say.  eMarketer reported that in a survey by email marketing firm dotmailer, email marketing was the most mentioned marketing software category used by respondents (88%). The same study also indicated that 65% would be allocating budget to email marketing technology in the next year.

MessageGears also did a study (registration required) in partnership with the Relevancy Group on email marketing challenges and opportunities. This study noted that 33% were somewhat satisfied with their email marketing technology and 35% with email deliverability. Even more interesting though were the 56% that were somewhat satisfied or somewhat dissatisfied with the ease of data utilization.

At the same time, though, email marketing is getting hard to do well. That’s because customers are demanding better email experiences. They don’t want bulk emails thrown at them that don’t relate to their needs or challenges. Customers want their email personalized and relevant. And that requires an understanding of the customer that only internal data can provide.

eMarketer noted (in the same article) that dynamic content and personalization are top tactics planned by marketers in 2016. Both of these can be tricky because to be truly accurate in personalization efforts; the data needs to be real-time (or as real-time as possible). That doesn’t typically happen when you are bulk loading your customer data into your email marketing solution.

MessageGears and Roy believe they have the answer to solving the major challenges organizations have with leveraging all their customer data for personalized, relevant email marketing. Keep the data behind the firewall where it’s secure. Set your emails up using an on premises email marketing app that can easily connect to the customer data in real-time to create relevant, highly personalized emails. Then send them off to the cloud to be delivered - reducing reliance on IT and internal server infrastructures.

And there’s a bonus in there. That internal customer data store? It knows everything about the customer, not just what’s happening with email. This enables you to make your emails even more relevant because you’re looking at the customer’s relationship across all your channels.

Why isn’t every vendor shifting to hybrid?

It’s a question worth asking. If hybrid email marketing is the future of email marketing, then why aren’t we hearing about other enterprise vendors shifting their platforms in this direction?

It’s not that simple to do when you already have an establish technology infrastructure that’s built in the cloud. As Roy pointed out, it likely requires a rebuild of the platform from scratch.

Here’s another question Roy gets asked when he talks with prospective customers. Why does the SaaS email marketing model not work? He usually asks his question - why are company websites behind the firewall? Roy says email is an extension of the website, so doesn’t it make sense to have them both in the same location, ensuring consistency across channels?

He also pointed out that many have a false assumption that SaaS-based email marketing doesn’t require on-premises software. You have to get internal customer data into the email marketing platform somehow, and that’s typically done using ETL scripts that clients have to create and manage themselves.

Final thoughts - is MessageGears on the right track?

Recently picking up US $2.3 million in Series A funding to expand their capabilities and grow sales and marketing, MessageGears is headed in the right direction. Add in some major customers like Expedia and Runkeeper, and you can see they have a platform that meets the needs of enterprise customers.

In a whitepaper by IDG Research Services (PDF link) on the hybrid cloud model - which is essentially what MessageGears is emulating:

Gallant [John Gallant, senior vice president and chief content officer of IDG Research Services] agrees: “Hybrid cloud not only makes IT—and the entire company—more agile but it also streamlines operations and frees up budget for the things that really make a difference for corporations: Acquiring new customers, improving the customer experience, increasing engagement and loyalty, and driving innovation.

Can MessageGears take market share away from established cloud vendors such as ExactTarget, Responsys, and Adobe? It’s possible. But it will take some time.