Are you looking to monetize your emails, but don't know where to start? This guide will walk you through your options.
What are email ads?
Email ads are paid advertisements or internal promotions you add to your emails/newsletters in order to drive more revenue. They are a way to monetize your subscriber list, in the same way you may show ads on your site or in your app.
Why should I include email ads in my emails?
Ultimately, if you have built a sizable email base, some brand is going to find value advertising to those users. If you send out regular emails anyway, by including ads you get instant access to a new revenue stream (at almost 100% profit).
In determining whom to sell ads to, your main options are:
- Have outside advertisers pay for ad placement via direct-sold placements or using programmatic ads
- Have internal vendors pay to have their products promoted (see: Bed Bath & Beyond charging Dyson to promote their vacuum listings)
- Show internal promotions to drive more purchases of those products
Is incorporating email ads just like adding ads to my site?
There are technical limitations that make displaying email ads much more restrictive than web/app ads.
Specifically, email ads run into three issues:
- Caching - Caching is when the mail client, such as Google, sees that the same image (based on URL) is going out to, say, 20K people. To speed up delivery, Google would host the image on their server.
Why is this an issue? Because cached images prevent accurate impression reporting (you would see 1 impression, not 20K). This effectively make it impossible to track and charge on impressions.
Why is this an issue? Because it limits what ads you can show (for instance, rich media ad units are off the table).
- Proxied Image Calls - Google proxies calls to images. This means that Google uses their own IP address in place of the unique IP address of the recipient.
Why is this an issue? Because geo-targeting doesn't work if all users, regardless of where they are, look like they are in Mountain View.
There are ways to circumvent caching and proxying, but you'll need to work with your email ad server to figure out the best way to do that. The short story, though, is that email ads are fundamentally more restrictive than standard ads.
Do I need to bring my own advertisers?
You don't have to! You could work with an email ad network like LiveIntent, who would provide programmatic email ads for you.
Alternatively, you could work with ad serving APIs like those offered by Adzerk to fill your inventory with direct-sold ads only.
How much will I make from email ads?
Industry rates are usually in the below ranges. As you can see, inserting programmatic ads from a network has much lower eCPMs (cost per every thousand impressions), but it also involves a lot less work. For many companies, the investment in sales and ad operations teams is justified by the increase in ad rates from selling directly.
|What||eCPM||Monthly rev if sending to 1M users 4x a month|
|Programmatic Email Ads||$2 - $4||$8K - $16K|
|Direct Sold Email Ads||$8 - $15||$32K - $60K|
How do I add email ads to my emails?
There are three main paths:
- Use your email service provider (ESP)
- Use an email ad server
What is an email service provider?
This is the catch-all name for the software that manages the delivery and tracking of email marketing campaigns. It could be homegrown or a 3rd-party solution like Mailgun or Mailchimp.
With an ESP, a marketer can:
- Store email addresses
- Segment and filter these subscribers
- Design and build emails using templates, design tools, etc
- Send out these emails in bulk
- See reporting around bounces, opens, clicks, etc
The software additionally provides tools around A/B testing, GDPR compliance, unsubscribing, and so on.
Theoretically, you can use your ESP to include ads in your emails. For instance, if you only had one advertiser, and they were appearing in the same spot to everyone, you could just use an ESP to insert this.
But simplicity isn’t the norm with ads; most publishers want to maximize revenue by selling to many advertisers, while also incorporating complex targeting rules to increase ad relevance and draw higher ad rates.
Because of this, an ESP is not particularly suitable for managing large-scale email ad campaigns.
What is an email ad server?
An email ad server is a tool for managing direct-sold and programmatic ads within your emails. It oversees:
- The insertion of ads/promoted content into your emails, including direct-sold ads, programmatic ads, and house (internal) ads
- The storage and management of the ads that'll appear
- The setting of rules to determine what ads appear where and when (including targeting, pacing, and revenue goals)
- The selection of the best ad to show using an ad decision engine
- Campaign tracking and reporting
Unlike ESPs, an email ad server has an ad decision engine. The engine ingests business rules defined by the publisher (such as enabling 1st-price auctions to increase CPMs) and advertiser goals (such as $20K spread evenly over a month), and then, out of 100s or even 10000s of ads, it chooses the right one to show in just milliseconds.
An email ad server, then, allows you to create personalized email ad experiences that won't ruin the user experience. It's great for larger brands who want to:
- Monetize their emails with direct-sold ads
- Own the business / revenue rules
- Incorporate 1st-party data in targeting
- Include native email ads
- Sell desktop, app, and email ads to the same advertiser (and run them at the same time)
- Use a sever-side solution so they can request ads before compiling the email
What email ad servers are out there?
There are a few well-known ones, but they are limited in number:
PowerInbox, LiveIntent, and Passendo will be more of your standard email ad servers, while Adzerk provides APIs to build a custom direct-sold email platform.
Google Ads Manager used to have this functionality but deprecated the feature in 2019.
Can you give a concrete example of how an email ad server works?
Yes! Let’s say I’m the owner of HomeFree, a niche eCommerce site for home goods and clothing.
My board is angry about our lack of sales growth, so I decide to supplement our income by selling ads within our emails. I begin by chatting with my retailers, who would like to pay to promote their products within the daily emails I send out.
I first think about whether I can use my ESP to insert the ads. Unfortunately, in chats with the advertisers, it's clear they won't spend unless I offer:
- Pacing rules to ensure we hit $10K/month, spending evenly every day
- User-level targeting to target people by the # of linked accounts
This complexity is not something I can do with my ESP, so I realize I need an email ad server.
I decide to build a custom, native email ad product using Adzerk, and once done, I upload my advertisers' creatives into the system, set up my targeting and business rules, and turn the campaigns on.
From there, the ad server does all the hard work of picking the right ad to serve in the email within milliseconds, based on my advertisers' goals and my business rules. Revenue increases, and the board is happy!
What are my next steps?
If you're still unsure of what to do next, we are more than happy to set up a 15-min consultation to walk through your needs and discuss the best path forward. We wish you the best in your quest to launch an email ad server!
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