The following is a guest post from DMA member Dave Hendricks, COO of LiveIntent.  it is excerpted from a column that originally appeared in ClickZ.

hendricksdave-70x70Would the email ecosystem take a quick victory lap?  2013 was The Year of Email!

What happened in 2013 that kept email as undisputed killer app of the internet? These are the events that stood out for me.


2013 Innovation Winner: Google’s Tabbed Inbox

Inbox innovation was a really big deal in 2013. Google’s new tabbed user experience really got the market excited, and in some cases agitated.

Using its GOOG-given right to filter users’ mail based on its own algorithms, Gmail introduced what some considered a radical challenge to deliverability orthodoxy by slotting users’ mail into three default and two additional tabs.

Similar to changing their search engine algorithm, this modification to the user experience created much consternation among ESPs and brands that had worked hard to earn their way into the previous innovation — the priority inbox — but created less reaction and hand-wringing from the true clients of the inbox, the email users. The biggest innovation within this innovation? The new ‘search-like’ emails that weren’t sent by a brand, but rather placed by Google like a paid search ad.

The Winning Takeaway: What took Google so long to figure out that clicking into Gmail, then into the Promotions Tab was ‘distilled intent?’ The inbox is a natural place to run targeted ads that are sure to be seen by an audience of openers and clickers. Placing an ad into the inbox isn’t foreign, since after all, what is an email marketing message if it is not an advertisement aimed at its customer?

2013 Innovation First Runner Up: Facebook’s Custom Audience

After getting more than 1 billion people to give them their email addresses at sign-up and sign-in, Facebook figured out that brands might want to market to their exact email-registered customers who were spending time on Facebook. Duh!

Custom Audience, a simple way of customer matching using the MD5 hash of the user’s email address (or a phone number), has been used by thousands of companies as a way to market directly to their customers when those customers are ‘spending time’ on Facebook. This is accomplished by matching the logged in users’ Hash IDs to the file uploaded by the marketer. Add creative, budget, and a bid and you have a serious one-to-one marketing tool.

The Custom Audience program has been so successful that Facebook is now expanding it to smaller businesses.

The Runner Up Takeaway: Your email addresses are valuable beyond your first party newsletter-based email campaigns. If they aren’t reading your emails, you can use Hash IDs to find them on an increasing number of custom audience platforms that support this standard. This will be available on Twitter and other social services before too long. Don’t be the last to introduce this tactic to your clients and co-workers.

2013 Second Runners Up: Salesforce, Oracle & Adobe

… and other smart companies that bought email technology companies this year. The innovations introduced by GOOG and FB led to a photo-finish with the winner and runner up. These three legacy tech companies combined to spend almost $4 billion dollars respectively acquiring ExactTarget ($2.5 billion), Eloqua ($871 million) and Neolane ($600 million).  (Editor’s note: Since Dave wrote this column, Oracle also acquired Responsys for $1.5 billion)

With worldwide email users exceeding 4 billion and growing, investing $1 per addressable user in the ‘technology equivalent of water‘ is a smart and long-term choice. It takes a long time to build an email technology company and when they hit scale and execute, email tech companies tend to be very disruptive and hard to displace. High switching costs and the strong secular trends favoring email make these investments much safer and remunerative than buying flashy social companies that are subject to the vagaries of platform policies.

If you are the CFO of a public tech company what would you rather own – ExactTarget or SnapChat? And as an added bonus, Adobe has tried to up-end the ESP pricing model by eliminating CPM sending charges. Take that old business models!

2013 Second Runner Up Take-Away: With fewer email technologies available for acquisition on the open market, buying these companies now was a smart move, as they were still relatively cheap. Other fully-scaled companies that are still available for digestion include SilverPop, Responsys and Constant Contact. Do you think email is going away? Since CRM is email, these are great plays by smart companies.


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