innovation

It is Alive! The Death of E-mail Has Been Severely Exaggerated

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It is hard to go to a tech gathering these days and not hear the phrase “e-mail is dead.” Everyone says the same thing: “No one is going to use e-mail in the future because my children don’t use e-mail.”

Saying e-mail is dead is rational, understandable, and … dead wrong. E-mail is here to stay and it is only going to get more, not less, critical to our lives.

First the facts:

People spent more time in e-mail in 2010 than any prior year. The next biggest year was 2009.

The next biggest was 2008. And so on. And 2011 will certainly be the biggest year for e-mail ever. We are still on a rising trend as mobile devices are accelerating the growth of e-mail.

The best proof of e-mail’s continued ascendency is all the profit companies are making from it.

Given e-mail is an old technology, it is incredible that there are hundreds of companies that make over $50 million per year just selling e-mail deliverability services.

The E-mail Service Provider (ESP) space has been growing by 30% per year over the last several years. Companies like ConstantContact (NASDAQ: CTCT), Responsys (NASDAQ: MKTG), ExactTarget, MailChimp, VerticalResponse, Blue Sky Factory, iContact, Cheetahmail, Datran’s Stormpost, e-Dialog, Silverpop, Sendgrid, YesMail, Eloqua, and hundreds of others are providing the ability to send billions of e-mails for millions of businesses.

While social media gets all the hype, the combined revenues of all the social media marketers pale in comparison to the boring e-mail companies.

And look how e-mail has revolutionized industries. Gilt Groupe – an e-mail list for fashion items – now has a higher valuation than some of the most well-known retail brands. GroupOn has revolutionized services by sending them out to deal-seeking consumers via e-mail. And organizations like MoveOn have galvanized hard-core supporters through the simple use of an e-mail list.

Even traditional retailers have massively benefitted from e-mail. Companies like the GAP, 1800Flowers, Buy.com, and others generate a huge amount of their revenue (and a larger amount of profit) from e-mailing their customers and letting them know about special offers and new products.

E-mail marketing is expected to be the top area of investment spending among marketers in 2011. E-mail drives more revenue than any other medium (even mediums like TV). And e-mail is almost certainly the highest ROI center in marketing.

The power of e-mail is that it is asynchronous (the recipient can read it whenever they want), it can be personalized to the user (unlike a Twitter post where everyone reads the same message), it is inexpensive to send (unlike direct mail), free to receive (unlike SMS), it is very trackable, and it is easy to access for almost every American with a wallet.

Some definitions:

Facebook wall posts aren’t e-mail (they are visible to everyone), but Facebook messages are (they are sent to only a small number of people). While IM is not e-mail because it is meant as a synchronous means of communication, SMSs might become just another form of e-mail (though it will likely continue to have a higher cost).

All of us are overwhelmed by our inbox. But information overload is not confined to e-mail: we’re becoming overloaded with our newsfeeds, tweets, LinkedIn stream, SMS messages, RSS feeds, and the dozens of other sources being thrown at us every week. There will be more tools in the future to make the experience of using and managing e-mail more enjoyable and more productive … and because of that, I don’t expect e-mail usage to peak for at least another 15-20 years.

None of this means e-mail will stay the same. It won’t. E-mail is already getting more social, more filterable, more actionable, and more personalized. We’ll see some great strides in e-mail in the coming years, and it will continue to evolve and become more important in our lives.

See the full article and add your comments.

Auren Hoffman is CEO and Co-founder of Rapleaf and an active angel investor in over 30 technology companies.

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