• by editor , David Baker , May 30, 2005

If you're considering bringing e-mail marketing systems in-house, read on. If you're not, read on anyway. This is a hot topic based on the way today's businesses are run. We want to make the complex simple, for ourselves and our customers. So finding the right partners to support our businesses is critical. But sometimes we think that to do the job best, to guarantee the best quality for our customers, we have to do things ourselves. Thus the question, should I bring e-mail marketing in-house? (Translation: should I license a product, integrate it with my infrastructure, set up a mailing server environment and manage all aspects of the system?)

In 2002 Forrester published a report with a big prediction: "Most marketers hope to bring e-mail marketing in-house by 2003." But then it made a distinction. It said for those marketing to business consumers, in-house e-mail marketing might make sense because integration with CRM Systems and Sales Force Automation is critical. But large-scale consumer marketers with complex systems and expanding lists might be more successful with application service providers and agencies. In 2002 no one was talking about deliverability as an issue. Furthermore, there weren't any controls on affiliates, third parties or the use of e-mail.

Fast forward to 2005. Many large scale and small scale organizations are using internal e-mail systems. And they have buyer's remorse when they see the cool gadgets available with Application Service Providers (ASPs). Three years ago businesses were all about reporting and cool features. Today they're about responsibility, simplifying systems for their customers and Total Cost of Ownership (TCO).

Because TCO is one of the biggest issues to consider today, here are a few points to think about:

• Transactional Repository. Hosted e-mail services offer tremendous financial advantages in terms of archiving and storage capacity. You are typically not charged for hosting hundreds of lines of data for each campaign and in many cases it is archived for you at little to no costs compared to your internal costs to manage and archive this.
• Image Hosting. Instead of requiring you to host images on your own servers, many outside systems will allow you to host images for your e-mails for small fees or free. Over time, this can be a nice savings in both resource costs and server capacity.
• List Management. If you do not have a database in-house or are using rudimentary database technologies, many of the e-mail systems offer robust database management and storage services that allow detailed queries, segmentation, advanced reporting and customizable fields.
• Forms and Web Pages. Many of the newer systems will offer form hosting, surveying, hosting, opt-out and preference pages that can be built on the fly. Developing and managing this internally adds significant cost and resource time to host, create and integrate with your current e-mail systems.
• Mail Server Capacity. You should consider the network costs of sending an e-mail through your own servers. The costs are often difficult to calculate precisely. But imagine the immeasurable time cost of sending an e-mail to 50,000 names at noon when your servers can only accommodate 7,000 names.
• Managing Opt Outs. The systems have become so advanced and automated that you can easily create single-click opt outs, custom opt out forms and double opt out methods that can be managed automatically for you.
• Reporting and Analysis. Unless you're willing to spend twice the normal cost, you will most likely never have in-house reporting systems that are as thorough as those of ASPs.

If you are contemplating licensing server-based software or questioning your current internal system, then spend a bit of your research budget on testing third-party, hosted services. You'll want to understand what you'll be missing or gaining (for example, control versus flexibility). If you bring the system in-house, you will likely have tighter integration and more control, but you will not benefit from the product advancements of a hosted solution and it will be harder to understand your TCO. I believe that if you have an internal system, your capabilities will always be a few years behind the market. Most importantly, you want to keep things as seamless as possible to make the complex simple for you and your customers.