EROI: Read, click rates drop considerably

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E-mail marketing remains popular with marketers (it’s second only to search in terms of commanding the biggest chunk of online marketing budgets, according to Forrester Research), but it’s becoming more of a challenge, if recent response rates are any indication.

Read rates and click rates are both down considerably for e-mail, according to e-mail marketing service provider eROI’s quarterly analysis. In the fourth quarter of 2005, read rates were at 17.6%, a 29% drop compared with the third quarter. Compared with the fourth quarter of 2004, read rates dropped 22%.

EROI reported that click-through rates dropped 21% in the fourth quarter compared with the prior quarter. Year-over-year was better, however; click rates in the fourth quarter of 2005 (3.4%) are down 3% from the fourth quarter of 2004.

At the same time, e-mail volume in the fourth quarter rose 50% compared with Q3, eROI said, which contributes to in-box clutter. “Because of the 50% increase in volume, there’s been a drop in overall read rates and click rates in the fourth quarter,” said Ryan Buchanan, CEO at eROI.

One e-mail vendor said that ever-more sophisticated spamming tactics continue to plague e-mail marketers. “At the same time delivery and open rates are dropping, spam filtering rates are dropping [allowing more spam to reach the in-box,],” said Tom Gillis, senior VP-worldwide marketing at Ironport Systems, an anti-spam technology company.

“I’m concerned there’s a growing erosion of end-user confidence with the latest round of threats,” Gillis said.

Buchanan pointed out the continued practice by some marketers of a shotgun approach to e-mail marketing—rather than sending highly relevant e-mail to the appropriate target audience—further contributes to the drop in response.

“If b-to-b marketers in the past have been saying, ‘Hey, let’s just send this Webinar invite to our entire list because it’s quick and easy,’ they’re going to get lower click-through rates and opens,” Buchanan said.

David Daniels, research director at JupiterResearch, agreed. "We still see far too many b-to-b and b-to-c marketers doing broadcast mailings that are not targeted," he said. "There are still tons of opportunities with e-mail [for marketers]; but to do that effectively, you need to be relevant."

Segmenting lists in order to get relevant information into the hands of the right customer has continually been touted as the recipe for success, and Buchanan said marketers need to use customer data in order to accomplish that.

Daniels agreed and suggested a few basic things b-to-b marketers can do immediately to improve deliverability and increase response rates.

"First, look at all of the metrics—pens, clicks—by domain," he said. "If there is a giant drop in one domain, it will point to delivery infrastructure issues. Second, look at the people on your list and the response behavior metrics of that group. Who are the 70% or 80% of people who are ignoring you? If they have not responded in a long time, there is a likelihood those e-mails are dormant. Third, you need to test things like subject lines," he said. "Fourth, to the extent you can, personalize the relationship so that the e-mail message is from the person who manages your account, rather than the company. People tend to connect more with individuals rather than the entity itself. You can use [all] this information to better target your mailings and become more relevant."

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