Email marketing
In the United States, more than $251 million is spent on email marketing and this is growing by 19 percent per year. Email campaigns have deliverability rates of 90 percent, open rates of 30 percent, and click-through rates of 3 percent. Personalization is the key to campaign success.
Users In 2005, the Radicati Group estimated that there were 668 million email users worldwide, with over 1.2 billion active email accounts. Daily email traffic worldwide totaled about 135 billion messages, of which 67 percent were spam. The number of email users is forecast to grow at an average annual rate of 19%, totaling about 2 billion mailboxes by 2010 (Ref 1). Advertising Email advertising includes banner ads, links, or advertiser sponsorships that appear in email newsletters, email marketing campaigns, and other email communications. In 2005, In 2005, Morgan Stanley estimated that $251 million was spent on email advertising in the United States (Table 1). This was forecasted to grow at a compound annual growth rate of 19 percent to 2010 (Ref 2). Campaign statistics For business-to-consumer email campaigns, email deliverability rates are typically 90 percent, open rates are 30 percent, and click-through rates are 3 percent of delivered emails (Ref 3). In a study of over 200 million email messages, it was found that recipients were more likely to open and click on emails that used personalized subject lines and message bodies (Ref 4). Average open rates were 20 percent, and this increased to 24 percent
for emails with personalized subject lines, and 36 percent when both subject line and message were personalized. Similarly, average click-through rates were 3.59 percent and this increased to 5.15 percent when the message was personalized. Personalization JupiterResearch reported that 24 percent of marketers sent out broadcast mailings with no differentiation at all. Another 65 percent used quasi-personalized campaigns with simple name personalization in salutations. Only 11 percent of marketers used personalized campaigns with contextually relevant messages driven by life cycle, triggering, and targeting of content (Ref 5). Types of personalized campaigns Life cycle campaigns are automated strings of messages sent at predetermined intervals. Frequency can be timed to product, sales, or customer’s life cycle. Triggered campaigns involve messages triggered by an event, such as shopping cart abandonment, or order confirmations. The program is set up once and reoccurs as the event happens. Clickstream campaigns are targeted based on web site clickstream behavior. Content of offers is tied to areas of the web site where individuals expressed interest.
Table 1. Email advertising expenditures, U.S. estimates. 2003 Email advertising (US$ in MM) $218 2004 $96 2005 $251 2006 $339 2007 $417 2008 $488 2009 $551 2010 $601 CAGR ’05-10 19%
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Benefits of personalization JupiterResearch found that email campaigns which were personalized and relevant to recipients increased net profits by 18 times compared to broadcast mailings. Figure 1 lists personalized email
tactics that achieved conversation rates of 5 percent or more. Interestingly, offer-oriented messages (e.g. coupons, limited time offers) were less successful than messages based on targeting (e.g. birthday greeting, product replenishment).
Figure 1. Percentage of marketers using email tactics with conversion rates of 5 percent or more.
Limited time offer Online offers with coupons Targeting lapsed customers Targeting top performers Product replenishment message Birthday greeting 0% 10% 20% 30% 40% 50%
References 1. 2. 3. 4. 5. The Radicati Group, Inc. (2006). Hosted email, 2006-2010. MorganStanley. (2006). US Internet advertising outlook, 2006-2010E. Card Communications. (2006). Email trends report Q3 2006. MailerMailer LLC. (2006). Email marketing metrics report: H2 2005. JupiterResearch. (2005). The ROI of e-mail relevance: improving campaign results through targeting.
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