Newsflash: the new 2007 version of Microsoft's Outlook email tool no longer uses the engine in Internet Explorer to display HTML email. Instead, it uses the somewhat simpler HTML rendering engine built into Word 2007.
While increased security is most likely at the heart of Microsoft's switch, the Word HTML engine simply isn't as powerful as the one used by Internet Explorer. For example, Outlook 2007 will not display any embedded players even if security is turned off. Say goodbye to video email, Flash-based email and even animated GIFs. Even more disappointing is the lack of high-end Cascading Style Sheets (CSS) features like float and position, as well as the ability to fine-tune padding and margins in table cells. For a few more details, read the Campaign Monitor blog. For a full description, read this article by Microsoft.
I believe the impact on the world of email marketing will be minimal. The fact is, a huge subset of HTML emails do not use any of the features being removed. Additionally, Outlook 2007 is part of the Microsoft Office Suite and as such is not as widely used by consumers. According to MarketingSherpa's Email Marketing Benchmark Guide 2006, only 4 percent of consumers use Outlook. Most use AOL (20 percent), Yahoo! (19 percent), Outlook Express (15 percent), and Hotmail (12 percent).
Clearly, the BtoB world has a higher concentration of Outlook users, so it may be hit harder than BtoC. But it's noteworthy that, based on Silverpop's recent Email Creative That Works study, BtoB recipients tend to respond less well to fancy graphical email than do consumers. I suspect that BtoC emailers will not see a big change given the diversity of email tools their recipients already are using.
Bottom line, Outlook 2007's rendering engine is not a game-changing event for email marketers. Like the introduction of Gmail, it is something that requires attention, but I don't think we will see any big drops in response rates or recipient satisfaction as a result. And, looking on the bright side, if Microsoft is able to raise consumer confidence in HTML email, then we may see more consumers disabling image-blocking, which might even result in higher response rates...
There's always a silver lining <grin>.