Is the New Gmail Killing E-mail Marketing?

Is the New Gmail Killing E-mail Marketing?
Google's new format hasn't led to a big drop yet in the number of people opening promotional e-mails, says one marketing firm (Photograph by Getty Images)
Photograph by Getty Images

For Gmail users overwhelmed by inbox clutter, the great Gmail redesign of 2013 may have been just the thing, hiding promotional e-mails and social network updates behind tabs. The companies sending those promotional e-mails, on the other hand, are less than thrilled with the change.

Afraid the “promotions” tab is functionally a black hole, a number of companies from Gilt Groupe to Groupon have been encouraging e-mail contacts to route their messages back into their personal inbox—an easy step accomplished by simply dragging an e-mail from the “promotions” tab and dropping it in the “primary” tab. Other companies are more passively anxious. “We’re definitely hearing about it from our members,” says Artemis Berry, a vice president at Shop.org, the digital arm of the National Retail Federation.

The change may not be as bad as they fear. Yesmail, a marketing company that delivers about 40 billion e-mails a year for companies such as EBay and Hewlett-Packard, says the share of marketing e-mails that were opened—a metric that traditionally ranges from 0 to about 25 percent—has dropped by less than 1 percent.

“With what we’re seeing right now, it’s not a game changer,” says Jason Warnock, vice president of market intelligence at Yesmail. “But you’re really going to need to wait it out in the next 60 days.”

A Google spokeswoman says the new inbox was designed to help users organize their mail; happy users are good for Google. Here’s what else is good for Google: more advertising. And while sending out 500,000 e-mail promotions is more or less free, the other options for reaching Gmail users—namely, buying adjacent ads—are not. If the new format drives just a fraction of companies to take that step, the returns could be handsome for Google.

At the same time, the search giant has created a new ad format. It’s adding as many as two paid ads at the top of each inbox of promotional messages. The ads look like e-mails, act like e-mails, and can be deleted like e-mails (though they will eventually regenerate).

The Gmail redesign may not even be the worst thing to happen to e-mail marketers this year. There’s a more troubling trend: Almost half of all e-mail is now opened on a smartphone, according to Yesmail. But when marketing messages are opened on a mobile phone, the reader takes action—buys something, clicks through, whatever—about half as often as when the message is opened on a desktop.

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