Presidential Emails

Welcome to Marketing BS, where I share a weekly article dismantling a little piece of the Marketing-Industrial Complex — and sometimes I offer simple ideas that actually work.

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Thanks for reading and keep it simple,

Edward Nevraumont

Suppose you’ve been tasked with managing an email campaign: how many messages should you send? Less is more, right? Or…is more actually better? Maybe it depends whether you are selling products or promoting politicians?

The evidence, I believe, can help us develop effective strategies.

Let’s start with a look at politics. Last week, The Wall Street Journal analyzed the email marketing programs of prospective presidential candidates. The headline bluntly states their conclusion: “Bad News About Those Constant Campaign Emails — They Work”. Think about the numbers described in the article:

One unfortunate side effect of a race bursting with two dozen Democrats seeking to challenge President Trump is the spam-level volume of fundraising email it has produced. Since April 1, candidates have sent a combined 1,730 messages, more than 19 a day, to supporters, according to a collection of presidential campaign emails maintained by The Wall Street Journal.

The previous quote omits an important piece of context — how they define “a message.” TheWSJ could be using two distinct ways to count the messages:

  1. Emails sent to a candidate’s ENTIRE list. In this case, the 25 (at present) Democratic candidates would be collectively responsible for sending an average of 19 messages per day, over the three-month period. For the sake of simplicity, imagine that a half-dozen of the fringe candidates didn’t exist; that would leave us with 19 candidates sending 19 messages per day. That’s one daily email from each candidate.

  2. Emails sent to a SUBSET of a candidate’s list, personalized for each demographic category (e.g., age, location, etc.). Political campaigns regularly send emails with unique subject lines for each segmented group (“Welcome first-time voter!” or “I love the Midwest!”). What if the WSJ article counted each of those emails as distinct messages? In that case, the number of emails received by an individual subscriber would be much, much lower. That’s maybe two or three emails — per week — from each candidate.

Which is better? How many messages SHOULD a candidate send to their opted-in subscriber base?

According to the WSJ article, the more the merrier:

Professional email consultants who have worked on presidential campaigns have bad news: There is no such thing as too much. And the more cringeworthy the content, the more likely you are to click and give money. [Emphasis mine]

Can that be true? Is there REALLY “no such thing as too much” — let alone too much of a “cringeworthy” thing?! From an advertiser’s perspective, email marketing offers one great benefit: it’s effectively free. Technically, of course, email campaigns require SOME investment to manage servers and ensure delivery, but we might be talking about $0.10 for every 1000 emails.

If, in theory, your emails generate at least 1/100th of a penny in profit per send, then you’re making more money than you are spending. Why not send more emails?

Because, as we all know, theory doesn’t always align with reality.

Think about your favorite retail brand. You’d probably enjoy hearing from them sometimes, right? How about once or month or maybe once a week? What about once a day? What about six times a day? At some point, even a cherished brand can overstay their welcome in your inbox.

Thankfully, we can learn from some solid research about the marginal impact of sending additional emails, thanks to clever folks like MineThatData’s Kevin Hillstrom.

In a 2018 study, Hillstrom conducted a series of tests on email frequency and then averaged the results from five different attribution vendors on how much revenue the email channel was generating (total, not just from click-through events). Here are the results for one week:

  • 0 Contacts / Week = $0.00 total.

  • 1 Contact / Week = $0.10 total.

  • 2 Contacts / Week = $0.17 total.

  • 3 Contacts / Week = $0.19 total.

  • 4 Contacts / Week = $0.20 total.

  • 5 Contacts / Week = $0.205 total.

This is a textbook example of diminishing returns. The company’s first email generated $0.10 (recall that cost per email is roughly 1/100th of a cent). The second email in the same week produced an additional $0.07, the third email earned $0.02 more, the fourth email earned an extra $0.01, and fifth email squeezed out $0.005.

As anyone would expect, the first email significantly outperformed the fifth message that week. But take a closer look at the difference between the fourth and fifth: if your cost to send the fifth email is only $0.0001, then generating $0.0005 still seems pretty great. For a company with a list of one million prospects, that fifth email could capture $5000 in additional revenue every week, or $250,000 per year. Wouldn’t you be professionally negligent by NOT sending a fifth email? And what about a sixth email per week…

Let’s reflect on a cautionary tale of sending “too many” emails.

Back in 2010, Groupon was a thriving pioneer of the “discount offer” marketplace — so successful, in fact, that Google offered to buy the company for more than $5 billion.

Coincidentally, I happened to visit their offices (negotiating a partnership between Groupon and Expedia) when the Google news broke. Our negotiations stalled as Groupon founders Erik Lefkofsky and Andrew Mason kept running in and out of meetings to deal with the Google action. (We did manage to complete a deal, although it took five months — instead of the single week we’d originally expected).

Ultimately, Groupon turned down Google’s offer (but not before buying an exercise ball chair for every employee. Andrew later told us: “We thought that was what Google employees all had at their desks”).

The front entrance of Groupon’s office featured an unusual element: a wall of magazine covers profiling “it” companies — like MySpace, Friendster, and Classmates — that later went down in flames. Andrew wanted employees to remember that what happened to previous tech darlings could happen to Groupon, too — even if that fate seemed impossible during such rosy times.

As it turns out, the magazine covers did not help. Unlike many “discount offer” rivals, Groupon has avoided collapse; that said, the company is a shadow of the growing titan it seemed to be decade ago. Today, Groupon’s valuation sits around $2 billion. They should have taken Google’s money.

What went wrong?

To answer that question, let’s go back to the beginning. In Groupon’s early days, they sent a single email every weekday, highlighting one ridiculously great offer. Many people (myself included) would wake up and immediately check what incredible Groupon deal had been delivered to their inbox. I bought restaurant vouchers. I bought museum passes. I even bought an introductory flying class (two actually — one for an airplane and one for a helicopter!). Every morning provided a rush of excitement. As you might expect, Groupon contemplated an important question — why stop at five emails a week? Before long, the company started sending emails on the weekend. But once they reached seven emails per week, they’d reached the limit, right?

Why not send two emails per day?

CEO Andrew Mason pushed back against increasing the frequency of emails, but the team demanded a “data-driven test.” Surprisingly — at least to Andrew — the results appeared positive. Open rates stayed strong and many people bought the second deal, although there was a downside: slightly higher numbers of people unsubscribed from their list. All in all, the cost of the additional emails seemed small, but the increased revenue was substantial. Groupon was like a two-year-old in a candy store: “more, more, more.”

In a 2018 interview on Gimlet’s Without Fail podcast, Andrew Mason shared his perspectives about those decisions:

[W]e started out with these really tight principles about how the site was going to work and really being pro customer and as we expanded and as we went after growth at various points people in the company would say hey why don't we try running two deals a day…And I think that sounds awful like who wants that. Who wants to get two emails every single day from a company…and you'd get in a situation it's like OK I guess we can do this it doesn't feel doesn't feel right but it does seem like a rational decision. [Emphasis mine]

Back to the previous question: what went wrong?

Metrics like open rates and total revenue might be able to offer a certain kind of assessment, but they cannot provide clear perspectives about any strategy’s long-term effects. There is only one foolproof way to fully understand the long-term impact of your decisions: wait for the long term.

And in this case, Andrew’s doubts were right. The decision to send two-a-day emails foreshadowed a complete transformation of Groupon’s operations: they strayed from the pattern of sending a single daily email with one exceptional deal, and they started offering hundreds of terrible deals, available any time.

After rejecting Google’s $5 billion offer in 2010, Groupon’s current valuation hovers around the $2 billion mark. In the big picture, many factors have contributed to Groupon’s decline, but — I’d argue — the decision to send the second email played a big part in shedding $3 billion in value. That’s a lot of long-term impact.

But lessons like Groupon’s are often forgotten. Let’s keep that in mind as we revisit the presidential hopefuls and their email campaigns. From the WSJ article:

“What annoys you the most in your inbox is probably what’s doing the best for a candidate,” said Liz Zaretsky, who has written emails for presidential campaigns. “The campaigns don’t love everything they send, but it’s hard to argue with what’s raising money.”

What “annoys you the most” might produce the best SHORT-TERM impact metrics for the candidate, but Zaretsky doesn’t know the LONG-TERM consequences of “annoying” their subscribers. She CAN’T know — only time will tell.

We CAN, however, guess what might happen. Of course, we have to rely on our instincts and experiences, because — once again — you cannot use currently available data to review the long-term impacts of your decisions. I’ll wager that Andrew Mason would agree with one idea — annoying your biggest fans might not be the most effective way to reach the White House.

As Kevin Hillstrom illustrated with his research findings, every additional email you send will generate SOME positive incremental impact. And yet, every email you send will also motivate some of your subscribers to click the “unsubscribe here” button. Last week’s Marketing BS newsletter was my personal favorite so far. Readers agreed: it was shared more times and attracted more subscriptions than any previous newsletter. But, it ALSO triggered more subscription cancellations. This apparent contradiction is actually a common phenomenon. During my time at Expedia, the emails that drove the highest sales also sparked the most unsubscribes. To paraphrase Elie Wiesel’s famous adage, “The opposite of an engagement is not an unsubscribe. It is indifference.”

The negative impact from short-term subscription cancellations are almost always overshadowed by the positive impact from sending an additional email (or two…). But the true, unmeasurable (or at least difficult to measure) consequence is not just the short-term subscription cancellations, but the long-term impact: the reduced trust your subscribers have in you. Every time a subscriber has a “bad experience” from reading your email — or even seeing it in their inbox — it reduces their chances of opening the next email. Which, in turn, reduces subscribers’ respect for your brand, as well as their trust that you (and your emails) will provide them with value. The erosion of trust is obviously difficult to evaluate, but it reveals itself through metrics that you CAN readily observe: lower future open rates, lower future conversions, lower future click-through rates, and lower future brand traffic.

Here is one last quote from the WSJ article, looking at strategies to improve open and click-through rates:

Varying the email sender and playing with the look of the subject line are two of the easiest ways to get people to click, said Lianna Patch, a New Orleans-based commercial email copywriter for 10 years who doesn’t work in politics.

I agree that manipulating subject lines is an effective strategy for improving open rates. It’s standard practice for companies to send emails with different subject lines to a small subset of a list, determine which subject line achieved the highest open rate, and then use that subject line for distribution to the full subscriber list. One caveat: that’s an “effective strategy” for short-term results. For long-term success, you need to understand that when subscribers see your email, they’re asking themselves “how much did I enjoy reading the last few messages from this company?”

Marketing tactics might be able to shift your open rates by a few percentage points in either direction, but the baseline open rate depends on two things: (1) who your subscribers are, and (2) their genuine connection with your content.

My recommendation for any presidential candidates reading this newsletter: stop spamming your subscribers and start sending content that makes you proud to share. Sending great content is more challenging than just blasting your base with donation request messages, but it’s not THAT hard. Instead of tasking a 23-year-old college graduate with the responsibility of maximizing the short-term email metrics, you could identify which of your senior advisors are compelling writers and then hand them the keyboard. Sure, this approach might hurt your click-through rate, but it could also increase your chances of becoming president. Which is more important to you?


Follow-up: Marketing to Employees and Controversial Marketing

My July 2 newsletter, “Marketing to Employees,” described how customers don’t really care about companies and brands except for quality and price and convenience. Employees, on the other hand, DO care, so companies need to tread carefully when it comes to taking a position on certain issues. Employees’ sense of personal identity is so strong that it affords companies the opportunity to court controversy in the media, (provided that their stand isn’t perceived as offensive by their employees). I wrapped up the piece with the example of Nike:

Last week’s newsletter mentioned the Nike ad narrated by quarterback Colin Kaepernick (who gained notoriety for kneeling during the playing of the national anthem before football games). Nike’s ongoing support of Kaepernick has infuriated many customers and bewildered many analysts.

Nike knows what they are doing (illustrating the ideas from this article!). 

For many American customers (especially middle-aged sports fans), Kaepernick remains a controversial figure. But he’s not perceived as provocative by the top graduates from colleges where Nike is recruiting their next generation of marketers, designers, and business leaders. In other words, their future employees — the ones who revere Kaepernick’s message from the Nike ad, “Believe in something…even if it means sacrificing everything.”

Coincidentally, Nike was back in the news this week with another controversy:

Nike Inc. is yanking a U.S.A.-themed sneaker featuring an early American flag after NFL star-turned-activist Colin Kaepernick told the company it shouldn’t sell a shoe with a symbol that he and others consider offensive, according to people familiar with the matter.

The sneaker giant created the Air Max 1 USA in celebration of the July Fourth holiday, and it was slated to go on sale this week. The heel of the shoe featured a U.S. flag with 13 white stars in a circle, a design created during the American Revolution and commonly referred to as the Betsy Ross flag.

This footwear fiasco generated a lot of media attention last week — FAR MORE than Nike would have received for the release of the Betsy Ross shoe. In contrast to Nike’s “Dream Crazy” ad campaign — which clearly anticipated a degree of backlash — the launch of the Betsy Ross shoe didn’t seem like an intentional attempt to stir controversy. (As I argued last week, companies can intentionally leverage controversy to make news — which increases awareness and consideration to purchase — without ruffling employees’ feelings). I generally think that take is right, but I’d like to highlight two concerns.

First of all, in addition to employees and customers, companies need to watch out for a third player: government.

Although Nike immediately stopped selling the shoes, Arizona Governor Doug Ducey announced he was pulling $1MM in incentives that his state was offering Nike. Of course, $1MM is not enough money to influence Nike’s business decisions (especially when New Mexico’s governor promptly stepped up to offer new incentives). That said, you could imagine a world where government decisions hold more power and therefore demand greater consideration. (Marketing is not just advertising; it’s also public policy. Everything is a Marketing Problem).

One thing to note: even as Doug Ducey slammed Nike in his role as governor, he continued to act like a regular (i.e., oblivious) consumer. From USA Today:

Nike's decision to pull its "Betsy Ross flag" sneaker just before the Fourth of July irked Arizona Gov. Doug Ducey so much, he yanked $1 million in incentives offered to the company and blasted the move in a nine-message screed on Twitter. 

But the decision apparently didn't bother the Arizona Republican enough to keep his own Nikes in the closet on Independence Day.

A photo posted on the Coconino County Democratic Party's Twitter page Thursday evening showed Ducey wearing black-and-white Nike tennis shoes at a Fourth of July barbecue in Flagstaff, Arizona. [Emphasis mine]

Repeat after me: customers don’t really care about your company’s values.

There’s a second concern that can arise from controversies like the Betsy Ross decision: employees may believe the company has gone too far. A throwaway line in a WSJ follow-up piece caught my eye:

Some Nike employees said they were surprised by Mr. Kaepernick’s involvement in the product, which featured a flag created during the American Revolution and commonly referred to as the Betsy Ross flag. The Nike endorser was concerned about what he believed are its associations with an era of slavery and its adoption by some extremist groups, according to people familiar with the matter.

Bottom line: if you want to determine whether “Nike went too far,” don’t look to customers, governors, or media pundits. Look to see how their employees are reacting. 

Keep it simple,

Edward