In mid-May, Yes Marketing, the email service provider division of marketing service provider Infogroup, announced its exit from the email technology business. It will support its proprietary Yesmail platform for the next 36 months while actively migrating current clients onto Adobe Campaign. This feels like the end of an era to me! Yesmail was one of the old guard of email service providers, originating in the late 1990s. In the early 2000s, the trend was for marketing services firms (MSPs) to buy up email service providers (ESPs). In the past few years, though, we’ve watched these decade-and-a-half deals disintegrate:

The email climate has certainly changed since the early 2000s. But the pitch from MSPs then was not dissimilar from the story that marketing clouds tell today! Both bought ESPs to build a one-stop solution for multichannel marketing. Is the marketing cloud version of this ideal a better offering than any MSP could ever put together? I’m not convinced:

  • IBM exited the marketing technology business (including email).
  • Salesforce claims the largest share of email today. But innovation of its email products has given way to innovation of the broader suite. Veteran client references in our most recent Forrester Wave™ evaluation of email service providers found that Salesforce has long forgotten about the high levels of service they enjoyed at Exact Target.
  • Oracle/Responsys clients have similar complaints about customer service.

If you’re Jim Sturm, president of Yes Marketing, you believe that all of this indicates that email marketing technology is a commodity without a place for differentiation. But I’m not convinced of this, either. I just think that differentiation has shifted from the point of email delivery (it once was scale, network reliability, and inbox placement) to other points in the email marketing value chain. Here are some places where I see innovation today:

  • Path optimization. This isn’t your average journey building. New tools use machine learning to create a sequence of messages that work with each other to drive a user to an end goal. For example, Coherent Path doesn’t just predict the right message, offer, images, and subject line to pitch a customer — although it can do that too. It actually determines, in real time, what message will progress a customer forward toward a goal based on their present context, past action, disclosed preferences, and value.
  • Data model. In the retail industry, good personalization requires integrating lots of different types of data in real time. You definitely feel personalization that doesn’t work: A banner ad for something you already bought chases you around the Web, or you get emails about baby clothes for three years when you don’t have kids just because you bought a friend a shower gift. The next generation of personalization comes from vendors like Cordial, which built a data model that can normalize data in any format into a common data model that can be used in real time to determine retail experiences. Imagine a Rosetta Stone that translates product inventory, pricing, ratings and reviews, customer behavior, context, and demographics data into one common language.
  • Integration of sales, service, and promotional emails. Marketers have inserted offers into transactional messages (like shipping notifications) for a while now. But generally, the commerce platform mailed out receipts or order confirmations, while the marketing email engine sent out the weekly coupon blast. But now, thanks to the rise of usage-based businesses like Uber and Airbnb, service messages that confirm that a driver is on her way and messages that give you $10 off of your next ride all come from the same system. Sendgrid has mastered this by adding a campaign management front end to its send infrastructure. And Dyspatch (previously SendWithUs) templates give transactional emails have the look and feel of marketing ones.

What do you think? Has email just become a commoditized feature? Where do you see innovation with email marketing?