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By Luis Rivera

RISMEDIA, March 10, 2008-(eMarketing+Commerce)-It’s no secret that companies are pouring money into search engine marketing. In fact, businesses spent $9.4 billion in 2006, a 62% increase from 2005, according to the report The State of Search Engine Marketing 2006, published by SEMPO, the Search Engine Marketing Professional Organization.

And while search engine marketing continues to be a very powerful customer-acquisition and lead-generation vehicle, conversion rates are typically around 2%. Savvy executives quickly are realizing that having the other 98% of prospects not take the desired action — especially after having spent so much to lure them to their Web properties — is an increasingly unacceptable scenario.

So what’s an e-marketer to do?

E-mail picks up where pay-per-click leaves off, allowing companies to build long-term relationships and generate additional business over time. A new website visitor who might not be ready to buy — but who signs up for a newsletter or promotional e-mail — extends the ROI of the original PPC spend.

E-mail ROI also is exponential: $51.45 for every dollar spent, according to the Direct Marketing Association’s The Power of Direct Marketing October 2006 report. That’s more than double non-e-mail Internet marketing, which came in at $21.08 per dollar in that same report.

Effective e-mail marketing actually is one part of an integrated strategy that includes search engines, websites, landing pages, blogs and RSS feeds, along with tools for content management, Web analytics, bid management and keyword identification. This strategy means abandoning the linear concept of driving clicks from a search engine to a website and instead embracing the idea of PPC at the center of a larger online ecosystem.

The purpose of all this is to invite prospects into a relationship that you hope will turn them into customers.

As you embrace a more comprehensive online marketing initiative, here are some e-mail marketing tactics you can immediately use to boost your conversion rates and enhance relationships with prospects.

Make e-mail marketing permission-based. Marketers must be transparent with their opt-in practices and policies — use the double opt-in process, tell subscribers exactly what to expect in terms of content and frequency, and then don’t deviate from those terms one iota.

Make it easy to join. Let visitors subscribe to your e-mail from multiple places on your website. Don’t force them to fill out a detailed demographic profile before getting to the opt-in.

Use incentives. It’s standard practice to offer an incentive for people to willingly invite communication with a company and share their e-mail addresses — because it works.

Add opt-in check boxes on demo requests, whitepapers and registration forms. Well-executed forms and pages can improve conversion rates by 50% or more.

Show them the goods. Describe your e-mail program on your website by showing a sample mailing. Also give subscribers the opportunity to tell you what they want with options for content, format and frequency.

Be transparent. Be sure to post your privacy policy in plain, clear language. No legalese, please!

Include “send to a friend” options. It’s an easy way to generate new subscribers with minimal effort, especially when bundled with promotional campaigns.

Immediately welcome subscribers. Send subscribers a welcome message as soon as they join that recaps what they signed up for, introduces them to your program and invites them to deepen the relationship by telling you more about themselves on a detailed preference page. You can even sweeten the deal with a special e-mail-only offer, like a discount coupon, a collection of “best-of” articles or other thoughtful touches that make you stand out from the crowd.

Personalize your message. Consider creating e-mail newsletters targeted to an appropriate subset of your list. You can do this by carefully analyzing subscriber response data and determining which respondents would be particularly keen on receiving relevant content and offers.

Monitor list statistics. Watch for trends in bounces, unsubscribes and inactivity, especially as you expand your program and add new lists or subdivide your master list into stand-alone segments.

Luis Rivera is CEO of Lyris, an Emeryville, Calif.-based provider of marketing technology solutions.