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According to the Aberdeen Group, the explosive growth of the past year will begin to moderate.
The report, "e-Mail Marketing: Relevancy, Retention and ROI," looks at the future direction of the e-mail marketing sector.
From 1999 to 2000 e-mail marketing grew by more than 270 percent and, says Aberdeen, emerged as the "killer application" for marketing.
It says the market will exceed USD1 billion by 2003 and research indicates that e-mail marketing will continue to grow.
This is due mainly to its simplicity, cost-effectiveness and ability to retain and cultivate long-term customer relationships.
However, accelerated consolidation in the next 12 to 18 months will mean that the explosive growth achieved during the past year will begin to moderate.
The report says that suppliers of technology designed to enable marketers to create ongoing dialogues of value with customers will experience accelerated merger and acquisition activity.
"The M&A activity we have seen recently is related, in part, to the slowdown in advertising and marketing expenditures," says Aberdeen research director, Kent Allen.
However, he claims that the real driver of this activity is tied to "the lack of financing available from the usual suspects."
He went on to say, "Some of the companies that will be acquired in the coming months have actually been seeing business pick up nicely but need an infusion of funding. That funding is beginning to materialise from e-marketing companies that have weathered the recent downturn."
The Aberdeen report explores the future direction of the sector and is directed towards e-mail marketers, marketing executives, enterprise CRM users, advertising agencies, direct response professionals and investors.
"As marketers have begun to embrace e-mail marketing technology and services, the market has finally displayed the growth that most leaders in the space have been accurately predicting for years," said Allen.
The next stage of strong growth, he suggested, will see "increasingly sophisticated on-line marketers looking for more complete offerings that allow them to take their e-mail marketing initiatives to the next level, and that means increased sector consolidation."
Further details of the report are available at www.aberdeen.com.
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