Posted by Rob Brosnan on October 15, 2013
The standard pricing model for email marketing — the CPM — may soon change. Industry consolidation, commoditization, and growing data volumes threaten the standard. Buyers may soon confront models that range from a platform license (all-you-can-email) to total utilization (data + messaging) to seat-based models. In November, I will publish research into the rationale for model changes, evaluate different candidate models, and explore the repercussions of the change.
I need your help. Price changes will have dramatic and difficult to predict effects on customer experience, marketing practices, the vendor landscape, and even the structure of the marketing organization. For example, an all-you-can-email model may, paradoxically, reduce email volumes in the long run, if it removes barriers to adoption of cross-channel programs.
This potential shift from channel-specific to cross-channel is one of the more interesting consequences of a model change. I’d like your reactions include:
- What is the best pricing model given the challenges you face (performance, cross-channel, real-time, mobility, etc.)?
- Who in your organization might be affected by the change?
- How do you anticipate the purchase process (RFP, selection, negotiation, contract review) might change as a result of a model change?
- If you faced no pricing limits on email, how would your strategy and operations change?
- If vendors moved to a platform model — e.g., including other modules such as web recommendations, push notifications, or behavioral targeting with email — how would your strategy and operations change?
A shift from CPM will be good news for email marketers, but it is risky for incumbents in the space. Forrester has observed a big shift towards cross-channel campaign technology in the last several years. If a pricing model change takes hold in email, vendors that can shift product roadmaps to more sophisticated data management and holistic orchestration capabilities will accelerate growth. Those that continue to focus on the efficiency and scale of the email sending engine will see an upper bound on the addressable market.
Help us. What do you think of this possible shift in pricing models? If you are interested in participating in this research or just have thoughts to share, please add a comment to this post or contact me directly at email@example.com.