The Cost of Email Marketing

How much do you spend on your email marketing campaigns?

It might be a question you can answer straight away. Alternatively, you might not be completely sure.

I wanted to see how much money digital marketers in the U.S. spend on their email marketing. If you’re curious about the cost of email marketing or want to see how your spending stacks up against other businesses, you’ll find the answers here.

Key Findings On Email Marketing Costs

The majority of surveyed digital marketers in the U.S. spend between $1,001 and $5,000 per year on email marketing.

10% of respondents don’t invest any budget in email marketing, relying on no-cost tools or neglecting it as a marketing channel.

Company size doesn’t significantly impact email marketing costs.

Businesses with 26 to 50 employees are most likely to have a budget exceeding $10,000.

12.1% of large companies (unspecified size) don’t spend any money on email marketing.

Profit generation, advanced features, and outsourcing to marketing agencies influence costs more than company size.

Both B2B and B2C companies exhibit similar spending patterns, with no significant impact based on industry.

Marketers with larger budgets tend to use platforms with more advanced functionalities, such as Klaviyo.

16.6% consider email marketing a waste of time and money, increasing to 29.0% among non-spenders.

Skeptics may dislike email personally or struggle with software usability (45.1%) and neglect best practices like sending welcome messages (52.6%).

Businesses spending more on email marketing find success through:

Utilizing AI for crafting email copy (76.9%).

Implementing segmentation for personalized messages (65.5%).

Sending various types of emails, including welcome emails (67.7%).

Avoiding gated content for building email lists.

35.9% of marketers believe email marketing generates a significant portion of their profits.

18.5% consider it their most profitable marketing channel.

Our Methodology 

I recently surveyed digital marketers about the cost of email marketing. The target audience was B2B and B2C marketers who use email marketing as a key channel in their marketing campaigns.

I asked respondents how much they spend on their email marketing per year, as well as about the tools they use and their opinions on email marketing.

I also asked the respondents how they optimized email campaigns to get the best open rates.

The survey received 585 responses in total.

Important note: The survey did not ask if email marketing budgets included someone’s full or partial salary (e.g. an email marketing specialist).

What Is the Cost of Email Marketing?

Here’s how much digital marketing teams spend on their email marketing each year:

The majority of marketers spend between $1,001 and $5,000 a year, with one in ten dedicating over $10,000 of their budget to email marketing.

One in ten don’t spend anything on email marketing at all, meaning they are getting savvy with no-cost tools or are not using it as a marketing channel full-stop. I’ll talk more about marketers that don’t see the benefit of email marketing later.

What factors influence how much companies spend on their email marketing? Let’s take a look.

How Does Company Size Impact Email Marketing Spend? 

Before I ran this survey, I assumed that the more employees a company has, the more they would spend on their email marketing. After all, a bigger headcount means a larger company with more complex needs, right?

The actual results comparing company size and the cost of email marketing were very intriguing. Let’s break them down:

The results show that company size doesn’t affect email marketing. In fact, companies with between 26 and 50 employees are most likely to have the largest budget, with 14.9 percent of respondents spending over $10,000!

12.1 percent of large companies said they don’t spend money on email marketing at all!

So, if company size doesn’t impact the cost of email marketing, what does? Here are some thoughts:

Some businesses make more profit from email marketing and, as a result, are happy to invest more into it.

22.6 percent of businesses that spend less than $500 on email marketing say it generates a good portion of their profits. This increases to 31.7 percent of companies that spend over $10,000.

Some businesses need advanced email marketing features, which can increase costs. For example, email marketing automation is typically unavailable with free email plans.

Some businesses use external marketing agencies to manage their email campaigns. This can also increase the cost of email marketing.

Does Industry Have an Impact on the Cost of Email Marketing?

As well as the size of the business, I wanted to see whether a company was B2B or B2C affected the cost of email marketing campaigns.

My initial assumption before seeing the data would be that B2C companies would spend more on email marketing as their needs are more complex. For example, e-commerce companies use automation and abandoned cart emails to reach out to customers and generate sales.

B2C respondents were more likely to say email marketing was the most profitable marketing channel for their business, with 20.9 percent replying in the affirmative compared to 15 percent of B2B respondents.

B2B marketers were more inclined to say that email marketing was a waste of time and money (19.1 percent) compared to B2C marketers (14.8 percent).

These two stats hint that B2C businesses are more likely to see the value in email marketing, but is this reflected in how much they spend?

It’s complicated!

Both B2B and B2C companies are equally likely to spend nothing and spend over $10,000 on their email marketing. Most B2C marketers said they spent between $1,001 and $5,000 on their email marketing, while most B2B marketers reported spending between $5,001 and $10,000.

This means industry doesn’t appear to have a significant impact on the cost of email marketing. But what about tools and strategy?

What Platforms Are People Using? 

The respondents of this survey used different platforms to manage their email marketing campaigns:

Interestingly, varying marketing budgets meant respondents were more likely to use different email platforms. Here are some of the key stats I discovered:

19.4 percent of marketers that don’t spend anything on email marketing don’t know what software they use to manage their campaigns.

20.3 percent of marketers that spend between $1,001 and $5,000 on email marketing use HubSpot, while 19.6 percent use MailChimp.

18.3 percent of marketers that spend over $10,000 on email marketing use Klaviyo.

Of the email marketers that said email marketing is a waste of time and money, 20.6 percent use ActiveCampaign and 16.5 percent use Brevo. 28.6 percent of respondents think these platforms are “way too expensive for what they provide.”

What does this mean?

Marketers who don’t see the value of or spend nothing on their email marketing are more likely to use a free or budget-friendly platform. ActiveCampaign and Brevo are two of the more affordable platforms at high-level use.

The platforms that marketers with a bigger budget use tend to have more functionality. For example, Klaviyo is well-known for its customizable automation features and also offers SMS marketing.

Ultimately, it’s a case of different strokes for different folks. Some digital marketers just prefer a specific platform.

How Much Do Email Marketing Platforms Cost? 

Here’s some extra insight into the different email platforms people use and how they relate to the cost of email marketing. Bear in mind that some platforms may offer extras or more email contacts for an additional cost.

Email Marketing Skeptics: Why Do They Think It’s a Waste? 

16.6 percent of the people I polled thought email marketing was a waste of time and money. This figure increased to 29.0 percent of respondents who didn’t spend anything on email marketing.

So, why do some people think the cost of email marketing isn’t worth it? I have two theories.

Firstly, marketers who don’t like using email marketing as a marketing channel may have a personal bias against email. 24.7 percent of the skeptics I polled said they don’t like to sign up to email lists.

If you’re deluged with spammy, poorly written, intrusive messages in your day-to-day life, you’re less likely to value the benefits of email marketing in the workplace.

Secondly, the people who don’t value email marketing may not invest in using it the right way.

For example, 45.1 percent of people in this group considered their email marketing software hard to use, and 52.6 percent did not send welcome messages to customers.

The thing about email marketing is that it’s easy to get to grips with but hard to master. Anyone can send a basic email to their mailing list, but optimizing a campaign to generate clicks and conversions takes time and effort.

This is why some people don’t value email as a marketing channel, especially those who consider themselves more “generalist” marketers. They’ve tried email marketing before and have not seen the results they were hoping for.

Does this sound familiar? If it does, I recommend giving email marketing another try. Alternatively, hiring an email specialist or digital marketing agency can help reinvigorate your campaigns.

Check out my blog about 25 best practices to help you fall in love with email marketing again.

What Email Marketing Practices Are Most Effective? 

Businesses that spend more money on their email marketing campaigns want the best results. After all, you don’t want to spend $3,600 a month on an email system and not see a return on investment (ROI)!

With this in mind, here are some expert tips from businesses that will transform how you use email marketing.

Take advantage of AI. 76.9 percent of my survey respondents use artificial intelligence (AI) to craft at least a quarter of their email copy. AI can save time and help you tap into the pain points of your target audience, but remember that it’s still important to ensure your copy has the human touch.

Use segmentation. Segmentation ensures more personalized email messages. 65.5 percent of respondents have five or more separate email lists.

Send a variety of emails. 67.7 percent of respondents send welcome emails because they believe it helps their business. You should be using different styles of emails to connect with customers at different stages of the buyer’s journey.

Avoid gated content. Gated content is dying – there are far better ways to get customer information. Respondents said asking for emails during the purchase process or with a discount pop-up were the most effective methods to build their email lists.

FAQs 

Conclusion

The one thing I learnt as a result of this survey? The cost of email marketing is hard to gauge!

You’ll get small businesses that spend thousands of dollars on their email campaigns and large corporations that spend absolutely nothing on their email marketing.

However, one thing is consistent. The more you invest, the more profit you can expect to see.

If you’re cynical about the power of email marketing, let me leave you with a statistic. For every dollar you spend on your campaigns, you can receive $36 in return. 

If you don’t have the time to dedicate to email marketing, an email marketing company can manage your campaigns for you. This means you can focus on generating profit for your business through other channels.

What is the average cost of an email marketing campaign for your business? Let me know your thoughts in the comments!