A business case - complete with tangible ROI - for video email marketing is taking shape, accompanied by new offerings in the marketplace. However, because this rich multimedia twist on traditional email is relatively new, there are several caveats when developing a pricing strategy, according to a new report (pdf) by the Interactive Advertising Bureau (IAB).
The ability to embed video in email presents a new and potentially substantial monetization opportunity, IAB said, citing a Forrester Research statistic that predicts the global online video advertising market will reach $7.2 billion by 2012.

On a more granular level, reports of successful video email marketing campaigns are drawing attention as well. VideoLink, for example, used Flimp's video marketing platform to kickoff the launch of its website, sending its campaign to 5,000 email boxes. According to the company, 63.95% of those who viewed the video watched it to completion, and 33.42% clicked on a response link in the videosite. The average viewing time was one minute and thirty-six seconds; by way of comparison, the average email viewer will only spend eight seconds reading an email.

Pricing Considerations

But marketers should not rush heedlessly into crafting such a campaign, without taking the following potentially "hidden" costs into account, IAB said:

• Video and deliverability services are often not email service providers themselves. Rather, they partner with many of the leading ESPs as an added service, which means marketers can count on paying up to $10 CPM on top of what the ESP is paid.
• In order for the video to play within the email, it needs to be hosted somewhere, and there may be a cost attached to that. There may also be an extra fee for using the video player within email.
• CPMs will vary depending on list quality, size, number of segments, and other factors.  It is important to consider the sheer targeting power of email, and the current willingness of advertisers to pay a premium for video advertising, IAB said. "Publishers are able to command significantly higher CPMs for direct video ad campaigns with category sites who can target users of interest to category marketers."

New Offerings

At the same time as these issues begin to gain more widespread understanding, video email marketing service providers are moving forward with their own initiatives. Flimp Media, for example, reported this month it has completed the integration of its video landing page application with more than 20 email marketing services including Exact Target, Constant Contact, Silverpop, Vertical Response, Eloqua, YesMail, Convio and iContact.

Implix, in another example, debuted its new GetResponse 6.0 email marketing solution at ad:tech 2009 in the beginning of November. It features social media integration, GetResponse for iPhone, free online surveys, advanced email analytics, and video email production capabilities aimed at small business markets.

Finally, Cantaloupe.TV, which at the beginning of the year rolled out its video management platform, Backlight [pdf]. enables email marketers to embed video into emails, integrates video across online marketing tactics, and measures video viewer interaction.