Email still the key to ROI, customer data: Ematic Solutions

The Singapore-headquartered software company has just closed a seed round of US$1.07 million, with investment from 500 Startups, Wavemaker Partners and Convergence Ventures, to fuel its expansion ambitions.

The company will use the funding for product development and expansion of its global team, with hiring planned in Singapore, Europe and the United States. It will also continue to seek investment in this round in order to accelerate its Southeast Asia expansion, notably into Indonesia and Thailand.

Its aggressive plans come as digital marketing continues to be a top priority for marketers in Asia Pacific. 

Research firm eMarketer has predicted that digital advertising spend in the region will increase by more than 20 percent to US$69.8 billion in 2016.

A survey by the CMO Council showed that senior marketers globally are focused on website content, development and performance optimisation as top budget-allocation priorities.

Founded in 2012, Ematic claims to help marketers easily build and deploy high-ROI email marketing programmes, using an artificial intelligence engine that works smoothly with a company’s existing systems.

Over the past year, it has expanded its app suite to include additional performance tools, such as web and mobile-engagement tracking applications that rapidly grow databases, and a tool that turns site visits and individual product views into sales.

In an email interview with Campaign Asia-Pacific, founder and chief executive Paul Tenney said that the company is focused on channel rather than campaign management, as there are already numerous tools, like MailChimp, that deliver great campaign execution.

“Channel focus means looking at database health, quality and growth rather than content,” he added. “By offering plug-and-play intelligence solutions, customers can use their existing best-of-breed campaign management tools to dramatically improve the performance of every campaign.”

Email, the king of ROI

Tenney said that at this stage, email marketing continues to be the single largest driver of revenue among the various marketing channels, and retains the crown as the “king of ROI”.

“While we do intend to ultimately extend our capabilities as a true cross-channel marketing platform, we see email as being at the centre of all of it for several critical reasons,” he added.

First, email is still the unique identifier of users on the web. People typically use the same email address on ecommerce sites and for mobile app registration.

“As we look to extend our reach across channels, starting with email makes the most sense,” Tenney said.

Secondly, SMTP (simple mail transfer protocol), the internet standard for electronic mail transmission, is an open protocol.

“Which means email service providers can’t charge you to accept your emails,” said Tenney. “This makes it very cost effective from the marketer’s point of view.”

He contrasted email with channels such as Facebook, WeChat and Line, which can control who posts what, where and for how much.

“We’re not saying that these channels shouldn’t be used, or that Ematic Solutions won’t integrate with them, but just that email will continue to be the leader in ROI for the foreseeable future,” he said.

“Growth in the email marketing sector has actually been accelerating in the past five years, and we expect it to continue to do so," he said. "But we are also acutely aware that our customers already are and will continue to demand strong cross-channel capabilities."

Challenges ahead

Tenney said that Southeast Asia provides certain challenges that most marketing technology, which mostly comes from the US and Europe, currently does not address.

For example, segmentation for country and language can turn what would be a single campaign in the US into six or 12 campaigns in Southeast Asia.

This means that rather than being able to focus on segmentation around customer behaviour or purchase history, marketers struggle with basic campaign execution.

“This leaves little time for testing, analysis, or deployment of automation and intelligence solutions that can really move the needle for marketers, and most of the technology available doesn’t address these problems,” he added. “This is the key to the Ematic Solutions approach, which understands that products need to be plug-and-play, easy to use, and ideally for intelligence solutions like ours should be non-disruptive to their existing marketing processes.”

Asked who would be the company’s target customers, Tenney said that anyone in the consumer space is a good fit, but e-commerce sites will see the returns from its products most quickly.

Southeast Asia will be the company’s primary area of focus, to tap into the fast growing e-commerce sector.

Frost & Sullivan has predicted that total revenues from B2C e-commerce in the six largest Southeast Asian markets will reach US$34.5 billion by 2018, from US$7 billion in 2013.

Tenney claimed that over 50 different brands are currently using the company’s Email Intelligence Cloud, up from zero at the beginning of 2015, adding that those customers span Southeast Asia.

“Organisational size doesn’t matter," he said. "Tech-forward companies with fast growth trajectories are an ideal fit regardless of size. A great example is Luxola, which leveraged Ematic Solutions from their startup days through to acquisition by LVMH-owned Sephora in July 2015.”

In press materials, Alexis Horowitz-Burdick, founder and chief executive of Luxola, said that one of the perennial challenges for any business is how to best acquire and then engage potential customers in a sustainable yet frequent manner to drive more sales.

“Ematic’s products check these boxes,” she said. “Simply put, their engine does the work in managing and optimising the relationship and contact frequency with each individual customer; we can then focus our time on other parts of the business.”

Tenney said Ematic's challenge is to evangelise the merits of taking a thoughtful approach to the long-term growth and management of the customer database to ensure top line growth is accelerating while attrition, churn and wasted spend are minimised.

“While markets around the region are maturing quickly, Ematic Solutions needs to be in front of companies live and in person to continue driving things forward,” said Tenney. “This means we’ll need great talent in sales, marketing and customer success that can effectively communicate the message.”