That seems like a simple question, but it’s not—at least certainly not anymore. The meaning of the term “email service provider,” or “ESP” for short, has evolved along with the email marketing industry.
A decade or so ago, most ESPs were standalone services that largely did one thing: send email. Pricing was almost entirely done on a CPM model of the cost per thousand emails sent. Back then, people distinguished between mail transfer agents (MTAs), which were the back-end engines that actually sent the email, and ESPs, which were the front-end user interfaces that provided marketer-friendly tools to load lists, set up templates, and ultimately press send.
Flash forward… There’s been roughly $10 billion in mergers and acquisitions in the ESP industry, as we note in Litmus’ first-ever State of Email Service Providers report. While there are still many standalone email service providers, lots of ESP functionality now resides within customer relationship management (CRM) systems. As the name implies, CRMs manage the entirety of a customer relationship, including communications via email and other channels.
Further complicating things, we’ve also seen the rise of marketing automation (MA) and digital marketing suites. Fueled by data and powered by intelligence, MA services don’t just send email like an ESP, but score and manage leads and help achieve the paradigm of sending the right message to the right person at the right time. And digital marketing suites provide email services alongside SMS, mobile push notifications, social media, and other digital marketing channels.
The trouble is, many ESPs, as well as CRMs, now have that functionality as well to at least some extent.
The lines that separate ESPs, CRMs, MAs, digital marketing suites, and even MTAs are blurring.
We saw this in the responses to our State of Email Survey. We asked: “Which email service provider(s) or platform(s) does your company currently use to send its marketing emails?” The 1,699 respondents had the choice of 82 ESPs, plus the opportunity to write in additional ones, which tons of respondents did.
Rather than define what an email service provider was, we trusted marketers to tell us. In total, they told us about more than 240 ESPs, which we listed in our Snapshot of the Email Service Provider Landscape.
That list includes standalone ESPs, ESPs that are operated by larger companies, ESPs that are partially integrated into a larger CRM or digital marketing suites, CRMs that have ESP functionality, marketing automation solutions, digital marketing solutions, and many other flavors and variations on those themes.
Understand the ESP Landscape
Our first-ever State of Email Service Providers report takes a detailed look at the ESP marketplace, including industry consolidation; the most popular ESPs across various sectors; and the functionality provided by ESPs.
Relatedly, marketers are also distinguishing less between products, business units, and parent companies nowadays.
This trend was also evident in the responses to our State of Email Survey. When answering our question about which ESPs they use, a significant number of people wrote in “Oracle” or “IBM,” for instance, even though we gave them the option to select “Oracle Bronto” and “IBM Unica,” as well as all the other email-sending platforms offered by those parent companies. Others wrote in “ExactTarget” or “Salesforce” rather than selecting “Salesforce Marketing Cloud (formerly ExactTarget)” or “Salesforce Core.”
That’s evidence that at least some marketers are focused almost exclusively on that topline brand and just aren’t distinguishing between product brands. That should make those parent companies really happy from a brand standpoint, especially since some of them have spent more than a billion dollars acquiring ESPs.
In our survey, enough people reported on brands rather than individual tools that it made sense for us to roll all the responses up by parent company, rather than reporting those as unknown within the parent company or accounting for them some other way.
We realize we sacrificed some detail in doing so, but we made the decision that accuracy was more important.
Together, the blurring of lines between email-sending tools and the confusion around company and product brands means that ESPs are becoming a state of mind and not so much a discrete business or business unit even. Email is being woven into functionality that spans channels and departments. Whenever a brand uses a tool to connect with customers, prospects, or partners, email is there.
Tell Us What You Think
That’s our take on what it means to be an “email service provider,” but we’d love to hear from you. Comment below and let us know how you define the term, whether you see it as being different from a CRM or MA platform, and where you see the ESP industry headed.