Dec 20, 2013

    New Gmail promos inbox hurts e-marketers

    SOME e-commerce marketers are having a challenging holiday season, and they blame Google for it.

    A change to Gmail that relegated retailers' e-mail to a separate inbox for promotions has had a big effect during the busiest shopping period of the year, according to three services that manage mass e-mail.

    Another change to Gmail, involving the way it shows images in messages, made it harder for retailers to track who opens their e-mail messages.

    Google says it made the changes to improve the service for users, and that the changes could also be advantageous to marketers. Yet many e-mail marketers - with whom Google competes for advertising - are still concerned.

    "Everyone knows their best customers are at Gmail, so that's a problem," said Mr Quinn Jalli, senior vice-president of digital marketing services at Epsilon, a digital-marketing firm.

    "It's fewer clicks from the most affluent portion of society, so it has a disproportionate impact on the bottom line for retailers."

    Google announced last Thursday that it would automatically show images in Gmail messages. Before, Gmail required an extra click to display images, largely because of concern over malware.

    Google now stores images on its own servers, where it screens them for safety.

    The flip side for retailers is that by storing images on their own servers, they received much more information about Gmail users who opened their messages, such as their locations. Now, they know someone opened an e-mail message, but not much more.

    Half a year since Gmail introduced tabbed inboxes, fewer e-mail messages from retailers are being opened.

    And while some data showed that Gmail users nonetheless spent more money - perhaps because they proactively sought out retail e-mail messages in the promotions inbox - other data showed the opposite.

    Gmail shoppers, who tend to be wealthier and more tech-savvy, clicked on retail e-mail messages 14.5 per cent more than Yahoo users, before the change to Gmail, according to Epsilon.

    But, by October, the difference had shrunk to 4.2 per cent, indicating that Gmail users were ignoring marketing e-mail messages more often.

    Accordingly, Epsilon's retail customers have reported a decline in revenue from Gmail users.