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I think the m4 macro processor might be the more canonical way to do it. Unless you’re writing a shell script, in which case a “here-document” with embedded $VARIABLES is more straightforward.

Wait, you're telling me this isn't a Best Practice™?

It totally is.

That's how we do it. Not with sed exactly, but string replacement. One is a bull email sender that only supports VBScript, the other is C#, but the users aren't supposed (or need) to have full templating powers, so this way it's easier.