Email Marketing vs. Paid Ads: Where Should Your Budget Go?
When it comes to growing an ecommerce business, two channels often dominate the conversation: email marketing and paid advertising. Both can drive serious revenue, but where should your marketing budget really go?
In this post, we’ll break down the pros and cons of each, share key stats, and help you decide how to allocate your marketing dollars more effectively. If email isn’t already contributing 20 to 30 percent of your revenue, there’s major room for growth.
What Is Email Marketing?
Email marketing is a direct-to-consumer channel that allows ecommerce brands to communicate with customers and leads through automated flows, newsletters, and promotions. Unlike paid ads, you own the audience and aren’t at the mercy of changing algorithms.
Key Benefits of Email Marketing for Ecommerce:
High ROI. According to Litmus, email marketing generates an average of $36 for every $1 spent.
Owned Audience. Your email list is yours, with no platform restrictions or rising ad costs.
Automation-Friendly. Set up once and generate revenue daily with flows like abandoned cart, welcome series, and post-purchase.
Personalization. Easily segment customers based on behavior, purchase history, or engagement to send more relevant content.
What Are Paid Ads?
Paid advertising — often via platforms like Meta (Facebook and Instagram), Google, and TikTok — lets you promote your product to new or returning audiences by paying for impressions and clicks.
Key Benefits of Paid Ads:
Fast Results. Get traffic and conversions almost immediately when ads go live.
Targeting Options. Reach specific audiences using demographics, interests, and behaviors.
Brand Visibility. Paid ads can boost awareness and get your name in front of more people quickly.
Email Marketing vs. Paid Ads: Side-by-Side Comparison
FeatureEmail MarketingPaid AdsROIHigh ($36 for every $1 spent)Lower average ($2 to $4 per $1 spent)Audience OwnershipYesNo (platform-dependent)Cost Over TimeDecreases as list growsIncreases with competitionPersonalizationHigh (based on customer data)Medium (based on platform targeting)Long-Term ValueStrong (repeat business and retention)Weaker (focus on acquisition)ScalabilityStrong (flows run automatically)Strong (but expensive at scale)Learning CurveMediumHighPlatform RiskNoneHigh (depends on algorithms)
Why Ecommerce Brands Should Prioritize Email Marketing
If you're looking to build sustainable, long-term growth, email marketing should be the foundation of your retention strategy.
With email:
You’re not paying to reach your own customers
You can drive up to 30 to 40 percent of your total revenue
You create consistent, branded touchpoints from first visit to post-purchase
At Milhook, we help ecommerce brands increase revenue through high-performing emails. Whether you need a full system or a one-off campaign, we build emails that convert — starting at just $59 per email.
How Email and Paid Ads Work Together
Paid ads and email don’t have to compete. In fact, they work better when combined.
Use ads to bring in new traffic. Capture leads with a pop-up or landing page. Nurture those leads with automated email flows that convert over time. Then, instead of spending more on retargeting ads, let email take over with cart abandonment and post-purchase sequences.
If you're spending thousands on ads but have no backend email system, you're leaving money on the table.
Final Verdict: Where Should Your Budget Go?
If you're just starting out or trying to improve profit margins, invest in email first. It’s cost-effective, scalable, and delivers stronger long-term ROI. Once your backend is in place, use paid ads to drive top-of-funnel growth.
Want to See What Email Can Do for Your Brand?
We’ll build you a free custom email campaign, no strings attached. If you want more from your email list or are looking for stronger engagement, Milhook is ready to help.
Book a free strategy call or explore our work at milhook.com/our-work
