Part 2: Why cold emailing isn’t cutting it anymore (and what you should do instead) – The Breakdown

A breakdown of compliance issues, deliverability challenges, and the real costs of cold emailing today.

This is Part 2 of a 3-part series where we dive into why cold emailing is no longer effective and what you should do instead. Check out Part 1 and Part 3 to continue learning about better lead generation tactics.

Cold contacting (also called “cold emailing”) used to be the golden ticket for B2B lead generation. Need new clients or customers? Just fire up your outbound email list and hit send! But with recent changes in email sending guidelines from Google and Yahoo, along with compliance regulations like GDPR, CASL, and others, what was once an effective strategy has become an operational headache that can lead to serious issues for your other email efforts and even costly fines for compliance violations. And worse yet, cold email engagement and conversion rates are plummeting like a stone.

So how exactly do you stop throwing money at fruitless marketing campaigns and start seeing some real ROI? We’ll break down the true costs of non-permission-based email campaigns and poor deliverability – and show how you can (and should) shift your focus to consent-based marketing, leverage demand generation ads, and use omnichannel approaches like LinkedIn messaging and remarketing. These tactics not only align with compliance but deliver better ROI and higher-quality leads that are actually interested in what you have to say.

If you’re tired of your emails getting ghosted or flagged as spam, it’s time to break up with cold contacting and switch to strategies that prioritize engagement and value. We'll show you how to make the smart move and put your money where it matters—into ad-based strategies that work for you and your audience.

Compliance challenges: the 3 biggest downsides to cold emailing in 2024 and beyond

Besides genuinely annoying your prospects, there are some serious drawbacks to cold emailing in modern marketing.

Cold emailing often means skating on thin ice with laws like GDPR in the EU and CASL in Canada. If you don’t have explicit consent, you risk hefty fines and legal headaches. Some vendors like ZoomInfo or Apollo might provide you with vast contact lists, but there’s no guarantee they meet compliance standards—especially when targeting regions with strict opt-in policies.

Deliverability and spam issues

Do your email campaigns end up in the spam folder more often than in the recipient’s inbox? That’s because recipients haven’t given their blessing to receive your emails. Sending unsolicited emails without proper consent can tank your domain’s reputation, reduce deliverability of all of your company’s emails, and lead to costly compliance violations.

Low engagement and conversion rates

Recipients of cold emails typically have low interest levels since they didn’t sign up to hear from you. They may have no familiarity with your brand and aren’t likely to take the desired actions — resulting in poor engagement metrics and higher costs per lead, not to mention frustration in your sales funnel. 

In our experience, most cold emails suffer from one of the most egregious faults: they don't get their audience right. If you can’t send your message to the right people, then the chance of it being relevant is slim. 

It’s not a good look for your brand

Let’s imagine your email actually reaches the recipient's inbox, they see the subject line, and decide to open it. If it's a cold email with a hard sales pitch, you'll likely turn them off immediately. For someone who doesn't know you, this is a bad first impression—you're now associated with unsolicited outreach. Instead of sparking engagement, you've alienated a potential lead, and this negative experience may hurt your chances when they need your services later.

The true cost of cold contacting gone wrong 

Now that we've established the main concerns of cold emailing, it's time to take a look at the consequences. We’ve broken down the hidden (and not-so-hidden) costs of running non-compliant cold email campaigns, how declining deliverability impacts your bottom line, and why adopting a consent-based marketing strategy could save your reputation—and your wallet.

Monetary costs of email compliance violations

Email compliance is no joke. Sending unsolicited emails without proper consent can result in fines that go up to millions. Let’s look at some of the heavyweights in legislation and what a single misstep could mean for your business. 

Please note: We are not attorneys and this is not legal advice. The following are general guidelines that showcase potential fines for violating certain legislations. To get the most accurate risk assessment, we recommend working with an experienced attorney.

GDPR violations

The General Data Protection Regulation (GDPR) is one of the strictest legislations. If you’re caught emailing EU residents without explicit consent, you could face fines of up to €20 million or 4% of your global annual revenue (whichever is higher). So, if your company pulls in €500 million a year, you’re looking at a potential fine of €20 million. All for an ill-advised cold contact. Ouch.

CASL violations

The Canadian Anti-Spam Legislation (CASL) is also a strict legislation that governs who you can and can't email. Violating CASL’s rules can cost you up to CAD $10 million per violation for corporations. If you’re targeting Canadian recipients without proper consent, that’s a risk you can’t afford to take.

CCPA violations

Under the California Consumer Privacy Act (CCPA), and the updated CPRA, fines can reach $7,500 per intentional violation. The laws give California residents the right to know what data is being collected about them, to delete the data, and to opt out of the sale of their data.

Country-specific fines

In addition to regional regulations like GDPR, certain countries like Germany have also enacted their own legislation that covers electronic communication. Pay attention to country-specific penalties and additional scrutiny, not to mention potential legal fees and reputation damage.

Declining email deliverability: the silent budget killer

Inbox placement, also known as email deliverability, is whether emails land in the inbox or in the spam folder (or just don’t get delivered at all). For obvious reasons, businesses should care about whether their emails are making it to their final destination (to the recipient). 

Even if you manage to navigate the regulatory minefield of collecting data and sending marketing emails, poor email deliverability can silently drain your marketing budget and impact your brand reputation. When emails don’t make it to the inbox due to a block or get flagged as spam, it means fewer eyes on your message, lower engagement, and ultimately, fewer leads. 

Let’s break down why declining deliverability can cause cascading problems for your company:

• If your SDR/BDR (sales dev) outbound emails are sent to mostly cold email lists/non permissioned email lists, then the poor email deliverability from those emails WILL negatively impact your marketing emails (newsletters, customer emails, nurtures, etc). 

• If you don't regularly clean up your inactive email lists and send non-permission-based emails from your domain or subdomain (email.company.com or company.com) it can harm your domain reputation. This means all emails you send could be negatively impacted – including customer emails, sales emails, and more.

• Companies like Microsoft, Google, Yahoo, and more have highly complex spam filtering rules that work to block millions and millions of spam messages every day. By not making good choices, you’re signaling to these email providers that you’re no different than the spammers they’re trying to block. 

• Bad domain reputations will snowball, meaning they’re likely to get worse and worse, while taking longer to show improvement if you implement mitigation actions. Companies like Google (Gmail and Google Workspace) are less likely to help you get your emails inboxed if you’re struggling with a bad sender reputation. (ICYMI, over 6 million businesses worldwide use Google Workspace.)

• It only takes a few complaints to push your spam rate to 0.1%. What’s crucial to understand here is that many B2B senders are unaware of their actual email deliverability rates because platforms like Google don’t share that data. This detail is especially important for someone managing digital content or marketing strategy, where understanding deliverability can have a direct impact on campaign success.

• With a lower deliverability rate, fewer emails reach recipients’ inboxes, resulting in a lower overall lead acquisition ROI.

• Poor deliverability means you’ll need to spend more to reach the same number of potential leads. This drives up your cost per lead (CPL) and makes campaigns much less efficient.

• Additionally, your email marketing platform likely has a strict compliance policy. Poor deliverability can lead to account suspensions, adding to the headache and potential costs.

Email deliverability is an incredibly complex and nebulous topic, and we can’t fit all of our thoughts in this article alone. But the main thing to remember is that you can’t act like a spammer and expect to be treated differently. As a B2B sender, you won’t know your spam complaint rate but keeping spam complaints low is still important. And to achieve this, you truly need to focus on consent-based marketing strategies.

How to break up with cold contacting (without the drama)

1. Shift to consent-based marketing

Focus on growing your opt-in database through value-driven content tailored to your target audience(s) on owned channels like your website and social media. Make sure to implement robust lead capture mechanisms with clear consent language to meet compliance requirements for GDPR, CASL, and other regional laws.

2. Leverage demand generation ads

To boost awareness and engagement, leverage content marketing, social media, and SEO. Platforms like LinkedIn and Google Ads can help you reach target accounts and guide them through your sales funnel. Additionally, remarketing ads can help you stay top-of-mind with prospects who have already shown interest, keeping your brand visible as they move closer to making a decision.

3. Implement demand capture tactics

Leverage high-intent channels like Google Search Ads and Capterra to capture leads who are actively searching for solutions. To maximize the effectiveness of these efforts, ensure your landing pages and ad copy are optimized for higher lead-to-opportunity conversion rates, making it easier to turn interest into action.

4. Utilize omnichannel approaches

Create a coordinated outreach strategy by combining LinkedIn messaging, email, and targeted ads, ensuring compliance while delivering value. Focus on building relationships through non-intrusive channels like social engagement, webinars, and industry events to foster trust and connection with your audience. 5. Invest in tech and data

5. Invest in tech and data

Invest in a unified tech stack that supports multi-touch tracking and a well-rounded media strategy to drive both demand generation and demand capture. Use CRM tools to efficiently track consent and manage data, while automating lead segmentation, consent tracking, and compliance monitoring. At every stage, ensure your content and offers are aligned to deliver value and guide your contacts smoothly through their journey.

The bottom line: why choose ad-based over cold contact

Cold contacting is becoming a risky tactic. With compliance penalties and poor deliverability rates costing more than they’re worth, it’s time to rethink your strategy. Ad-based strategies may appear more costly upfront but they deliver significantly more value in terms of lead quality and compliance safety. Plus, you’ll sleep better knowing you’re on the right side of the law!

By shifting your focus to consent-based marketing and ad-based strategies, you’ll help ensure you’re reaching the right audience, staying compliant, and maximizing your ROI. After all, there’s no point in sending an email if no one’s ever going to see it!

Ready to break up with cold emailing? Give demand generation and capture a shot—you won’t regret it.

Next: Continue to Part 3 to learn what strategies to use instead of cold emailing.

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