E-mail marketing is a form of direct marketing which uses electronic mail as a means of communicating commercial or fundraising messages to an audience. In its broadest sense, every e-mail sent to a potential or current customer could be considered e-mail marketing. However, the term is usually used to refer to:

• sending e-mails with the purpose of enhancing the relationship of a merchant with its current or previous customers and to encourage customer loyalty and repeat business,
• sending e-mails with the purpose of acquiring new customers or convincing current customers to purchase something immediately,
• adding advertisements to e-mails sent by other companies to their customers, and
• sending e-mails over the Internet, as e-mail did and does exist outside the Internet (e.g., network e-mail and FIDO).

Researchers estimate that United States firms alone spent US$400 million on e-mail marketing in 2006.

Advantages

E-mail marketing (on the Internet) is popular with companies for several reasons:

• A mailing list provides the ability to distribute information to a wide range of specific, potential customers at a relatively low cost.
• Compared to other media investments such as direct mail or printed newsletters, e-mail is less expensive.
• An exact return on investment can be tracked ("track to basket") and has proven to be high when done properly. E-mail marketing is often reported as second only to search marketing as the most effective online marketing tactic.
• The delivery time for an e-mail message is short (i.e., seconds or minutes) as compared to a mailed advertisement (i.e., one or more days).
• An advertiser is able to "push" the message to its audience, as opposed to website-based advertising, which relies on a customer to visit that website.
• E-mail messages are easy to track. An advertiser can track users via autoresponders, web bugs, bounce messages, unsubscribe requests, read receipts, click-throughs, etc. These mechanisms can be used to measure open rates, positive or negative responses, and to correlate sales with marketing.
• Advertisers can generate repeat business affordably and automatically.
• Advertisers can reach substantial numbers of e-mail subscribers who have opted in (i.e., consented) to receive e-mail communications on subjects of interest to them.
• Over half of Internet users check or send e-mail on a typical day.
• Specific types of interaction with messages can trigger (1) other messages to be delivered automatically, or (2) other events, such as updating the profile of the recipient to indicate a specific interest category.
• E-mail marketing is paper-free (i.e., "green").
• Tracking and response metrics enables tuning and optimisation of the E-mail marketing channel by a process of testing different variants and calculation of statisticaly signficant results.