How disruptive innovations are resetting the ESP and Adtech scores – Part 1
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How disruptive innovations are resetting the ESP and Adtech scores – Part 1

Published : September 1, 2023

In 2004, an article in the Harvard Business Review said: “You can’t make intelligent investments within your organization unless you understand how your whole industry is changing. If the industry is in the midst of radical change, you’ll eventually have to dismantle old businesses. If the industry is experiencing incremental change, you’ll probably need to reinvest in your core.”

Almost 20 years later, it is still relevant and becomes the central reason for this (and the next) article.

Innovations in marketing tech, especially email marketing, are causing seismic changes in how companies do business. We’ve covered some of these in other articles – AdWaste – the elephant in the digital marketing room (Part 1) <link>, <link>, <link>, <link>. This one will take you through the innovations changing the fundamental mechanisms of how Email Service Providers (ESPs) work.

ESPs – What they’ve been so far

B2C emails are among the most powerful tools in the marketer’s arsenal, and ESPs have been a fixture in almost every marketing strategy. Email marketing revenue is estimated at more than 10 billion U.S. dollars in 2023; no other marketing channel can compete with the ROI of email (up to 45 dollars per one dollar spent). Emails also let brands make the first move instead of waiting to respond to customer actions.

The first-gen ESPs were bought a decade ago by marketing cloud providers: SalesForce bought ExactTarget, Adobe bought Neolane, Oracle bought Responsys, and IBM bought Silverpop.

Major second-gen ESPs were all acquired by CPaaS players in the last few years: SendGrid by Twilio, Sparkpost by Message Bird, Mailgun (Pathwire) by Sinch, and Mailchimp was bought by Intuit. 

Some ESPs consolidated, like the CM Group and Cheetah Digital.

But have ESPs stagnated?

Email really hasn’t been innovated in the last 15 years. Not that work hasn’t happened; but most of it has been around sending (send time optimization, triggers), personalization and segmentation (as opposed to mass broadcast), automation (journeys), and AI-driven utilities like predictive segments, subject-line optimization, and churn prediction.

The email itself has stayed the same.

ESPs did not talk about email as a ‘profit channel’.

ESPs did not innovate on the actual email content.

This made them miss out on being a real stakeholder in strategy discussions.  Given how successful business emails are in the real world, it’s astonishing.

Email is changing, and so can the ESP

ESPs can make it big, but they need to do more than just regular emails. They must combine five specific innovations: AMP, Atomic Rewards, AI, Progency, and Prime. If they want to go above and beyond 360-degree functionality, they can offer a consumer email service (QuizMails) and a clutter-free inbox (Micronbox).

Let’s look at these innovations in a bit of detail:

  • AMP brings interactivity to emails, eliminating the need for click-throughs to landing pages. This enables the creation of app-like functions inside an email – users can search for products, buy items, fill up forms, play games, leave a review or rating, choose seats, book appointments, and do more inside emails. AMP emails allow marketers to control the push; they don’t need to wait for consumers to come to the site or open the app.
  • Atomic Rewards brings gamification to emails through persuasive micro-incentives for attention rather than interaction. Think of this as a pan-brand loyalty program that helps with non-transactional behavior: attention and data in the upstream coupled with ratings, reviews, and referrals in the downstream. While AMP can drive more in-mail actions, Atomic Rewards can ensure more opens.
  • AI can help simplify content creation and enhance message delivery, easing marketers’ pain points. Besides creating compelling narratives and designs for the email, AI can also ensure sending campaigns at the optimal time when users are more likely to open and engage with the emails. 
  • Progency is a product-led agency. The concept behind Progency combines creative and coding skills to help marketers fast-track projects that they have limited bandwidth for. Creating AMP emails at scale is one such task.
  • Prime is a B2B loyalty program that rewards brands for their AMP-related spending with Atomic Rewards (in the form of Mu), which they can use to change consumer behavior in the inbox.

    AMP spending gets them Mu, which they can use as Atomic Rewards to get more opens. Taken together, AMP and Atomic Rewards with Mu as the common thread can drive 10-50X more actions. For a detailed understanding, read ‘Rethinking B2B Loyalty Programs.
  • QuizMails is a consumer service to seed interest in AMP and Atomic Rewards. It creates a ‘must-see’ interactive email with a quiz, timer, and reward (an “Em” email that is consumable in 30 seconds or less). A timer challenges the brain, while Mu provides the reward.

Micronbox is a new clutter-free, spam-free consumer inbox which aggregates all the AMP and Mu mails together. While a virtual Micronbox can be created initially with the Gmail and Yahoo Mail apps (two email providers that support AMP), a cleaner inbox will benefit consumers over time.

Incorporating even one of these innovations can help ESPs drive immensely more value. But, combining all five would result in an actual reset of the ESP industry.

What changes the Game for ESPs: The All-In-Email

Visualize this: Every action the marketer imagines can be completed inside the email. From search to shop, pay to play, form fills to feedback, browse to bookings, chat to cart management, surveys to spin-the-wheel – users can do everything within email.

And hence the moniker, ‘All-in-Email’.

The All-in-Email helps brands cut down AdWaste drastically. Such emails get people’s attention all the time and solve problems of data poverty. ESP can offer AMP emails and integrate them with the other resonant innovations: Atomic Rewards, AI, Progency, Prime, QuizMails, and Micronbox.

Let’s approach this 360-degree email solution step by step:

  • QuizMails ensures that customers receive interactive and incentivized emails. With rewards in place, customers are more likely to open their inbox multiple times a day. So, your emails now get more attention.
  • With increased open rates, you get more customers interacting with brand emails. But now, when customers open these emails, they don’t have to read through regular text and then click to a landing page. Everything they need/want is within that one email.
  • The email body can have a search option. Abandoned cart emails can include payment mechanisms within them. Order confirmation emails can request users to provide an NPS score with a single click. All of it happening inside the email. And email footers can have AMPlets to gather user preferences, i.e., zero-party data. The email is now fun and something customers can look forward to.
  • Progency can assist in creating the AMP emails with utilities like an AMP Editor and AMPifier, which instantly converts HTML emails to AMP emails.
  • Prime can bring in the Mu to reward the brand’s users and also help expand dominance to other messaging channels.

With all these elements in place, All-In-Emails can disrupt the incumbents in the ESP business and reset what constitutes ‘value’ for customers. Most importantly, this disruption should push the industry from cost-per-email to KPI-based pricing. If you’re skeptical, here’s a strong precedent for this: think of when the digital advertising industry moved from CPM to CPC (cost per impression to cost per click).

(To be continued in Part 2)

This is part 1 of a two-part article comprising excerpts from the blog ‘Resetting ESP and Adtech Industries’ by Rajesh Jain. He is the founder and Group MD of Netcore, a bootstrapped SaaS company that helps brands create outstanding AI-powered customer experiences at every touchpoint.

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