Today at Blue Sky Factory we announced our acquisition of Blogarithm, a leading RSS to email provider. You can read the official press release on our corporate site, here.

The acquisition comes on the heels of our purchase of RSSFWD earlier in the year. We have been making lots of tweaks and additions to the RSSFWD service, and recently moved the service to a new set of servers to keep up with the demand. Blogarithm will soon be powered by RSSFWD technology.

I have been working with Max Minkoff and Andy McDonald, Blogarithm’s co-founders over the past few months to finalize the deal and put a plan in place to migrate the Blogarithm user base over to RSSFWD (this will be 100% optional to all current Blogarithm users). We feel the technology we have in place, and Choon Keat’s, continual advancement of our platform will help bring more features and options to users of the Blogarithm service. Both Andy and Max have been a pleasure to work with throughout the process.

The combined RSS to Email service will have a unique and active user base of over 100,000, and will be polling more than 125,000 unique RSS feeds and websites.

Below are some highlights from our release. I will, of course, be posting more on this topic:

“We have worked to deliver timely, accurate, refreshing connections between bloggers and their readers through BlogMail,” said Max Minkoff, co-founder and CEO of Blogarithm. “Blue Sky Factory with their RSSFWD technology will continue that tradition to our customers, keeping them updated with all the latest postings from their favorite bloggers.”

Currently utilized by more than 35,000 active and unique users, Blogarithm monitors over 70,000 unique RSS feeds on behalf of its users. Blue Sky Factory (BSF) will operate Blogarithm as an autonomous service as a complement to the company’s current e-mail marketing offerings. Over the next few months, Blogarithm will be powered by RSSFWD technology with some enhanced end user features. Blue Sky Factory also plans to integrate some of the service’s features into its leading web-based email marketing solution. Publicaster, which offers a full suite of tools to design, track, and execute your email marketing communications.

Over the past 2 years, email has weathered an amazing amount of scrutiny around its supposed demise and lack of effectiveness as a medium. With the rapid emergence of the social web, and a new breed of web 2.0 applications scouring the internet, its no wonder many people don’t view email as a critical component of the new media landscape, and in the eyes of some, has been brushed aside as an important medium.

To date, I have not said very much on this or other blogs in regards to these random opinions and theories, outside of the casual blog comment here and there. However, I do believe that the time has come for me to weigh in with my perspective, and offer some future thoughts around the medium. Being that I run a successful email marketing company, I have some insights and thoughts to address the supposed demise of email marketing, and speak to the claims that people like Jason Calacanis are spreading at conferences, like “email marketing is over, you can’t do email marketing anymore.” Jason may know a lot about blogs and search, but his knowledge and awareness of email as a medium is clearly “off.” Lets take a look at some of emails more powerful roles, and see how it fits into the landscape today.

Backround & Validation:

Yes, email has been around for a long time, its been around so long that even with web 2.0, social networks, podcasting, rss, new media, etc expanding rapidly all around us, email is still THE dominant application on the internet. The number one dominant application, worldwide, by a long shot. Thats a powerful stat to know. 77% of the daily sampled population of the Pew Internet and American Life Project recently said that Email remains the most popular application.

Email is not only dominant as an application for users to communicate and connect, this type of adoption has also made it dominant as a marketing communications medium as well. This is evident within a variety of executions of email as I will outline below.

I am very much of the belief that email as a medium is just now getting ready to evolve to the next level, and prove itself once again to be an ever important, critical spoke on both the marketing and social communications wheels.

Core Applications of Email:

Lets now take a look at some of the various ways that email is used first in a marketing role and then second on a social marketing level:

Loyalty & Retention Marketing

Perhaps one of emails most powerful benefits is its role in powering loyalty and retention marketing to an existing group of clients and prospects. These are email communications that consist of your monthly email newsletters, company and product updates, promotions, incentives, etc. Email is all about building a dialog with your audience, and moving towards an experience of relevance, getting as close to 1 to 1 as you can get. By leveraging even basic data sets and analytics, email can be an incredibly powerful medium for nurturing new business, and cross selling / up-selling your existing customers.

More than ever, companies need to focus on the data and continue to present their audience with targeted, relevant information. One of the most important tools in using email to me, is the presence of a subscriber preference center that allows your recipients to drill down to the content level (where applicable), and choose what they want to receive from you and often how. This preference center is also an incredible area to cross promote other content that your company may produce, ie. subscribe to the corporate blog, an RSS feed, audio or video podcasts, etc. The preference center is a key element to any online communications program.

As for the future of email marketing’s most successful deployment, I am going to let the following stats from the recent DMA report speak for itself. Just look at the ROI from email over other mediums:

With numbers on return like that, and due to the economics involved, I believe that email will continue to be THE driving medium behind the most successful customer loyalty and retention programs out there.

Customer Acquisition

Acquiring new customers through email marketing can be an effective, yet challenging marketing strategy. I am talking specifically about the email list rental business, or advertising or marketing to a list or and targeting an audience to email an offer or promotion to, much like in the way the direct mail business works. Email, of course, is a lot cheaper, more targeted, and much more measurable than direct mail, and plus its much more planet friendly.

As mentioned, although this can be a tricky thing to get right, it can also be an incredibly powerful way to acquire new prospects and leads. If your target list is high quality, and is being maintained by a credible organization like Postmaster Direct, then the right offer, to the right list, with the right creative and the right call to action can be very effective. Many publishers of websites, off-line magazines, trade publications, etc offer programs where they offer their subscribers the option to receive 3rd party advertisers on a limited basis. In some cases the participation is extremely high due to the nature of the industry, and in others it is not.

I believe the practice of list rental is still here to stay. Although it runs under a lot of scrutiny, I do believe that some of the economics around the industry may change over the next 12-18 months. I think we will begin to see more performance based compensation models put in place that may circumvent the overall effectiveness of the CPM buy, not that CPM is going away by any stretch. Of course, it all depends on what the campaign goal is, so it would definitely have to be done on a campaign by campaign basis. I am looking forward to seeing how this space evolves.

Transactional Email

One of the most overlooked executions of email as a marketing channel is that of the “transactional” email. Transactional emails are delivered to recipients after a purchase or after a particular action has been taken, i.e. sign ups, RSVP’s, purchases, etc.. These messages typically serve as the confirmation or acknowledgment of a recipients action, or the notification of the stage of where a recipient is in the process of an order.

Like many of the examples above, transactional email represents an incredible opportunity to develop the relationship with your customer or prospect, and start a dialog right away. These initial communications also offer a perfect opportunity to cross / up-sell your customer on your other products & services. This is all to often an overlooked marketing opportunity.

As far as the future of transactional email, can you even remotely imagine a future without it? It is at the very base of all email marketing, and is here to stay, as long as electronic messaging is. I think transactional email will get more interesting and definitely more effective in the future.

Social / Dialog Driver

This is, at the same time both the oldest and the newest use of email. Today, email represents the “driver” in a web 2.0-3.0 world. Email isn’t going anywhere, in fact, whether we know it or not, email is actually becoming more and more important to us than ever before.

Beyond email marketing, are the email communications that not only make up our personal one to one dialog emails, but are also the ones that drive the dialog. This can be driving the dialog in a social network, notifying you when someone who is in your social graph took an specific action, or alert you to a new blog post you are subscribed to, or a new piece of audio / video content, etc. Email is a driver.

This type of email was recently coined as being called BACN. BACN, a form of transactional email all on its own, drives dialog and consistently “alerts” people of new events or other messages, usually in social networks or applications. Whats ironic is that sometimes often these messages just point people back to another inbox. Think about when you get a Facebook email, it is normally a simple notification that someone left you a message, or added you as a friend, etc. And at the end of the day, all you are doing is going from your email inbox, to Facebook’s internal email system. All that said, we need to think beyond the BACN.

Email is much more than just marketing, its now a dialog driver within the new media landscape. This is a big part of Email 2.0. As my friend, colleague, and client, Christopher S Penn states, email is the “currency of accounts.” Meaning that email is the driver, the one medium that brings us all together. It is the one commonality of all of the various elements of the social web, the email address. Think about that for a minute.

Future Thoughts:

Outside of the undeniable data that backs up email marketing’s cemented future, I believe that email will continue to be a big part of the social fiber that we all live by in today’s connected world. I think that email is becoming more and more important to us, and that it will actually expand in the ways in which we use it, not only when, but where. As my friend and colleague Jeanniey Mullen said in a recent presentation, email is electronic messaging, so clearly we need to think beyond the inbox. Think mobile, networks, rss to email, text / sms, etc.

The role of email is expanding, it will continue to drive incredible ROI for marketers, play a key role in the way we communicate with each other, have an affect on how we are alerted to events and actions that are occurring in our own respective worlds, and how we are notified of new content being published, and affect in some cases how and when we consume it. And as time goes by I am sure there will be many more elements to add to the mix.

What do you think? Feel free to add to the conversation in the comments below, or share this post with a friend.

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In response to user feedback, and to prepare for some cool stuff thats coming in the very near future, Choon just launched some excellent new features on RSSFWD.

One of the biggest user requests was to add more options and control around how and when you receive your email notifications. This was especially the case in regards to active blogs with multiple posts per day. Gmail handled what we called “clustering,” and would cluster the posts in one email. The kicker was that if you didn’t use Gmail, you were pretty much out of luck and received one email per post.

So, we listened to our user base, and Choon coded out an incredible digest feature set. You can read more on the blog.

Here is a brief excerpt of Choons post on the RssFwd blog. You gotta dig that timezone love:

“Digest” for morning, afternoon, evening or night. What this means is that you can choose when you would like to receive your email. If you subscribe to CNN & Slashdot in the evening digest, you will get 1 email containing all the updates from both feeds for the day.

And in case you’re wondering, it will be in your timezone. If you choose “every evening“, it is your evening. Not mine. Not Greenwich Mean Time. And you don’t have to live in the US. This detail a big deal for me. Hopefully you’ll find it useful as well.