2016 - MojoWeb · 2016-04-04 · marketing industry. Consumers are now connected 24/7, accessing content anywhere, at any time, and on multiple devices. Digital marketing now represents

© 2016 Inbox Marketer Corporation

Executive SummaryIn the last five years we’ve witnessed one of the greatest periods of change in the marketing industry. Consumers are now connected 24/7, accessing content anywhere, at any time, and on multiple devices. Digital marketing now represents over 30% of marketing spend and according to a report published by eMarketer, a market research company, is expected to increase by 12% in 2016 to represent nearly 45% of marketing budgets.

This momentum is driven by the popularity of mobile devices. eMarketer forecasts that in 2016, smartphone penetration in Canada will rise to 61.2% of the adult population (22.1 million users) and 63.9% in the U.S. (207.2 million users). Smartphones and tablet devices have evolved to become an extension of a person; they are an intimate friend who is only an arm’s length away.

2016North American EmailMarketing Benchmark Report


While smartphones are now in the majority of consumer’s hands in North America, marketers are still playing catch up. In 2015 we saw marketers adopt responsive designs in greater numbers which, in turn, led to an increase in engagement metrics, as consumers received messaging optimized for their preferred devices. The metamorphosis will continue and marketers need to evolve in step, adapting and shifting their perceptions about mobile devices and its users.

Mobile isn’t just a contact point; it is an important data source and strategic tool to improve the customer experience. Connecting the data points and inferring behaviour will enable marketers to create a truer picture of the opportunities ahead.

Highlights• In 2015, open rates continued their upward trend; improving slightly

to 25.9%, up from 25.5% in 2014.

• Both click-through rates (CTRs) and unique clicks increased; averaging 5.0% and 3.7%, up from 4.3% and 3.1% respectively.

• Bounce rates continued their decline; reaching a five-year low of just 0.8% - Encouraging News!

• Deliverability is a critical factor; in 2015 average North American Inbox Placement Rates (IPRs) experienced sharp decreases for both US and Canadian businesses. American IPRs dropped from 87% in 2014 to 76% in 2015; while Canadian IPRs declined -4% from 83% in 2014 to 79% in 2015.

• Consumers expect to receive increasingly relevant content; marketers must leverage personalization, dynamic content, and predictive intelligence.

• Email marketing is powerful but becoming more complex. More science is being infused with the art. Marketers need to consider the impact of mobile devices, big data, consumer privacy, and the changing competitive landscape.

MethodologyInbox Marketer calculated averages using metrics from North American B2C & B2B clients across a variety of industry sectors. The following charts highlight the annual averages and the accompanying commentary further explains the “year over year” changes.


SECTION 1: 5 Major Trends in Email Marketing

The Mobile ShiftThe recent resurgence in the popularity of email can partly be attributed to the smartphone as customers can now check their email anywhere, any time. eMarketer forecasted that the number of smartphone users in North America increased 11.6% in 2015 (over the previous year), and that by 2019, there will be 262.2 million smartphone users in North America alone! This growth in mobile devices has fundamentally changed how people consume content and how marketers connect with their customers.

One of the key benefits of mobile is that marketers now have more user data than ever and with it the opportunity to do better behavioural analysis. The volume of digital messaging through email, social media, and mobile devices is causing consumers brains to be rewired. Attention spans are shortening; but so is the way they process information. The key for marketers is to really know their audience and more carefully orchestrate interactions.

The Rise of Contextual MarketingConsumers are getting better at tuning out, blocking, and skipping irrelevant advertisements. Alternatively, many will go out of their way to browse advertisements that are specific to their interests. According to eMarketer, 78% of retail customers are more likely to be a repeat customer if they are sent targeted personalized offers - nothing works better than an email that truly matters to the customer.

Relevance, perceived value, and context are key components to increasing consumer engagement. Personalized advertisements and recommendations will become increasingly valuable in 2016, as technology makes it easier to provide more targeted content that is relevant to consumers.

For example, many subscribers are now on the go when they open emails. A retailer can use these moments, when a subscriber first opens a message, to recommend the closest store locations, potentially driving in-store sales. Is it raining, sunny, or snowing at your customer’s location? Dynamically generated weather-specific inventory or messaging can further enhance your subscriber’s brand experience. Interactions like this will give brands a competitive edge and an opportunity to stand out from the crowd.

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Increased Testing & ScienceIn 2015 marketers undertook more rigorous testing. They’re executing more creative testing and optimization (templates and relational content) to try to improve relevance. Current marketing testing best practices include A/B test strategies or multivariate testing, but in the next year testing capabilities will expand in both breadth and depth. A cutting-edge area of creative learning comes through eye-tracking testing, where “message scientists” deconstruct eye-flow and measure viewability, stickiness, etc. This personalized testing will unlock marketing efficiencies, and improve user experiences as they interact with a brand across channels.

Contact us to start testing your creative with the latest technologies!

Data, Analytics, & Insights – A Winning TrioData and its analysis is where smart marketers focus their attention to gather insights about their customers. There is more real-time data now than ever before and it’s never been easier or quicker to get to. However, it’s not as simple as it sounds, as this abundance of data can be overwhelming.

Marketers need to be selective in the data they collect, discerning what’s interesting vs. what’s valuable. Begin by identifying specific program goals and then prioritize the components required to achieve them. For example, it might be interesting for a grocery retailer to know what day of the week their customer typically does their shopping, but it’s more important that they know what products they routinely purchase. Valuable data, when used correctly, enables brands to create more personalized and relevant messaging. In 2016 brands will narrow their focus, acting on key data points to make this happen.

A Push for Marketing AutomationAccording to Epsilon, triggered email messages get 119% higher click-through rates than a typical email campaign. Triggered emails are sent based on a user’s situation or behaviour (or lack of behaviour), according to “if-then” logic. For example, if your customer opts in to your email program, then a welcome message is sent, introducing them to the email program and setting expectations. Emails can be sent in response to a variety of behaviours: when a user subscribes to your newsletter, makes a purchase, views a certain product on your website, or physically enters your place of business.

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SECTION 2: Open Rate TrendsIn 2015, open rates (OR) continued to trend upwards, reaching 25.9%, up from 25.5% in 2014. Strong and consistent open rates are a positive indication that marketers are doing a good job of reaching their subscribers. As we’ve shown in previous benchmark reports, there is a natural Active Depreciation Rate where subscribers fatigue over time. As a result, it is up to marketers to ensure their content and contact strategy keeps subscribers interested and engaged.

Consumer behaviour and media consumption have changed drastically since 2011. Today’s consumers use multiple devices throughout the day to research, connect, and shop. To add to the complexity, today’s hyper-connected consumer often uses multiple devices at once!

While open rates are a good metric to use to measure and benchmark subscriber engagement, they only indicate that recipients have viewed an email message in their inbox, which doesn’t always tell the whole story.

The calculation for open rates is OR% = (confirmed unique opens) / (sent messages - bounces).

Smart Marketer Tip:There are often differences in measurement methodologies, which explains why some ESPs often report higher open rates (i.e. Epsilon uses total or “gross” opens instead of unique opens which skews their OR upwards). It is important that marketers keep this in mind when comparing the metrics of competitors within their industry and set benchmarks using their own data.

Figure 1: Open Rates by Year (North America)

30%

25%

20%

15%

10%

5%

0%

21.7%

2010 2011 2012 2013 2014 2015

19.2%22.0%

24.3% 25.5% 25.9%

Source: Inbox Marketer, aggregated B2C & B2B client data


SECTION 3: Click-Through Rate TrendsAlthough click-through rates (CTRs) declined in 2014, they rebounded and stabilized to a respectable 5.0% in 2015. This is encouraging news for email marketers as CTRs are a strong indicator for the relevancy of email content and are an excellent measure of engagement. Four main factors that have contributed to the increase in average CTRs over the past year are:

1. Larger Screen Sizes

Smartphone technology is advancing and the trend to bigger screen sizes improves the customer experience of reading emails.

2. Mobile Optimization

In 2015, email marketers embraced responsive design, enabling them to send more relevant messaging to their subscribers in formats that are optimized for their preferred device (i.e. phone, tablet, desktop).

3. Increased Personalization

Email marketers did a much better job of segmenting their lists, ensuring the right message was sent to the right person; significantly increasing the relevancy of the message.

4. Improved List Hygiene

Lastly, marketers did a better job of list hygiene. Privacy and permission have become a hot-button issue with consumers and marketers have responded accordingly; removing lapsed or inactive subscribers, all which are known to positively impact CTRs.

Average CTRs are healthy but there are significant variances between ESPs. The 2015 Epsilon Trends and Benchmarks Report states that the average CTR in the USA was 3.5% (Q3 2015).

The calculation for Click-Through Rate: (Total clicks) / (Sent messages - Bounces)

Figure 2: Click-Through Rates by Year (North America)

7.0%

6.0%

5.0%4.0%

3.0%

2.0%

1.0%

0.0%2010 2011 2012 2013 2014 2015

CTR

Unique CTR

4.5%

3.3%

4.3%

3.2%

5.8%

4.1%

6.0%

4.1% 4.3%

3.1%

5.0%

3.7%



Unique Click-Through Rate as a Percentage of Opens (CTRO%)The unique click-through rate as a percentage of opens is a true measure of engagement. It indicates what percentage of people who open a message actually click on a link within the email. The average CTRO% improved significantly throughout 2015, up from a low of 12.1% in Q2 2014 to a high of 14.5% in Q3 2015.

A strong CTRO% tells us that marketers are doing a good job on creative. Improving your CTRO% indicates that subscribers are responding to the CTAs within the message. Ensuring content is tailored to subscribers and employing testing to optimize all areas of a message is essential to maintaining a high CTRO%.

The calculation for CTRO%: (Unique clicks) / (Total opens)

SECTION 4: List Quality and HygieneBounce rates on an annual basis are very stable and in 2015 only 0.8% of messages bounced, down from 1.2% in 2014. This is the lowest bounce rate we have recorded in the past five years - and in fact, bounce rates have decreased by more than half since 2012.

Silverpop, a marketing software company, reported similar bounce rates in 2015 with just 0.57% of messages bouncing in the U.S., while Canada recorded a lower number of bounces at 0.27%. Note: Silverpop only reported on hard bounces while Inbox Marketer reports on both hard and soft bounces.

(Source: Silverpop, 2015 Email Marketing Metrics Benchmark Study)

Figure 3: Unique Click-Through Rate as aPercentage of Opens (North America)

15.0%

14.0%

13.0%

12.0%

11.0%

10.0%Q1

2014Q2

2014Q3

2014Q4

2014Q1

2015Q2

2015Q3

2015Q4

2015

14.0%13.6%

12.1%12.7% 12.7%

13.8%14.5% 14.4%



Despite these positive trends, it is still very important, especially for high frequency senders, to closely monitor the bounce rates on each campaign as well as on a monthly basis. For example, a 2.0% bounce rate over a 12 month period is respectable, but if each campaign had this rate the list erosion would be exponential and marketers should investigate why this was happening.

Overall, the drop in bounce rates is a good indication that email marketers over the past few years have taken a more diligent approach to list hygiene, as well as implementing content strategy best practices. This is important for marketers to commit to as it ensures that they maintain a good sender reputation and relevance with their subscribers.

The calculation for Bounce Rate: (Bounce and/or Undelivered Emails) / (Emails sent)

SECTION 5: List Churn MetricsHard bounces, unsubscribes, and complaints are other small but equally important list quality measures that email marketers should closely monitor. If they get too high, they can negatively affect sender reputation and deliverability.

Hard bounces, unsubscribes, and complaints all factor into list churn. List churn is the average percentage of email addresses that marketers can expect to lose in a given year. List churn typically ranges between 20-50% but can be reduced by practicing better list hygiene, adhering to industry best practices, and optimizing your messaging to ensure relevancy.

Figure 4: Bounce Rates by Year(North America)

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

2.1%

2010 2011 2012 2013 2014 2015

2.2% 2.2%

1.6%

1.2%0.8%

Source: Inbox Marketer, aggregated B2C & B2B client data(Total bounce rates include hard & soft bounces)


Hard BouncesWhat Are They?

A permanent reason why an email cannot be delivered to an email address. These records should be flagged and suppressed immediately.

Reasons for Hard Bounces:

• The recipient’s email address does not exist• The domain name does not exist• The recipient email server has completely blocked delivery

Impact/Fix:

Failure to remove hard bounces from future email campaigns can severely hurt sender reputation and one’s ability to get future emails delivered to the inbox.

Unsubscribes What Are They?

When users manually opt-out from receiving future messaging from a specific brand or company.

Subscribers are most likely to unsubscribe when:

• They receive impersonal and irrelevant email • They don’t recognize the sender • They receive more email than they expect or want

Impact/Fix:

While unsubscribe rates are typically low at 0.2% per mailing, it is an important metric to pay attention to as it provides good insight into what type of content subscribers value or, in this case, don’t value.

ComplaintsWhat Are They?

Feedback loops are tools made available to email marketers that enable subscribers to report spam. By removing subscribers from a list who don’t want to receive emails, one can:

• Reduce the complaint rate• Increase customer satisfaction• Reduce sender questions and end-user complaints

Impact/Fix:

Complaint rates are generally low at around 0.02% for reputable mailers. With lower complaint rates, ISPs are much more likely to allow messages to reach the inboxes of those subscribers who actually want to receive them.


SECTION 6: Inactive SubscribersInactive email addresses represent subscribers on your list file who have not opened, clicked, or taken some kind of action for a significant amount of time. (Inbox Marketer defines inactives as: subscribers who have not clicked or opened your emails in the last six months). Most marketers have a large number of inactive addresses on their subscriber list. For some, this segment can represent as much as 70-80% of their list.

According to our data collected over the past three years, the average percentage of inactives has been steadily decreasing. A primary reason for diminishing inactive rates is that Inbox Marketer clients have done a better job at targeting and reengaging their inactive segments.

Inactive rates greater than 40% still represent a significant number of subscribers and marketers should continue to look for new ways to reengage and reactivate this segment.

Inactive subscribers are undesirable for many reasons. Not only could these addresses be a source of unknown users or spam traps, but they also bring down response rates for the entire program and negatively impact your overall reputation. To best manage your email program, get a process in place to identify and deal with inactive subscribers.

Figure 5: Active/Inactive Rates

20%

30%

40%

50%

60%

70%

10%

0%

50.9%54.0%

51.2%

Q12013

Q22013

Q32013

Q42013

Q12014

Q22014

Q32014

Q42014

Q12015

Q22015

Q32015

Inactive

Active

Q42015

54.7% 56.1% 58.4%53.4%

58.7%53.5% 54.6% 54.4% 55.4%

49.1%46.0%

48.8%45.3% 43.9% 41.6%

46.6%41.3%

46.5% 45.4% 45.6% 44.6%



Quick Tips to Reengage Your Inactive Subscribers:1. Conduct re-engagement campaigns that feature:

a. Special offers

b. Access to exclusive content

c. Promotion of new content

d. Videos, or “how-to” tips

2. Invitations to opt-down or opt-out

3. Opportunities to update email preferences

SECTION 7: DeliverabilityThe difference between “delivered” and “deliverability” can often be confusing. Delivered (also known by the EEC term “Accepted Rate”) is defined as the number of messages that did not bounce, (# Delivered = # Messages Sent - # Bounced) a highly inaccurate number because not all receiving ISPs report accurately on the number and reasons for bounces.

Deliverability is a quality assurance metric that identifies where the actual delivered messages eventually end up. Overall deliverability in North America has declined in the last few years. The proportion of messages that make it straight into the inbox is called the Inbox Placement Rate (IPR).

In 2015, average North American IPRs experienced sharp decreases for both US and Canadian businesses. American businesses saw nearly one in four emails land in the spam folder or go missing, with inbox placement dropping from 87% in 2014 to just 76% in 2015. Canada, which typically lags the US in inbox placement, was slightly better with 1 in 5 emails missing the inbox. However, Canada also experienced a year-over-year drop in inbox placement —down from 83% in 2014 to 79% in 2015. (Source: “2015 Deliverability Benchmark Report; ReturnPath”).

Inbox Marketer’s own client metrics show significantly higher IPRs, with an average rate of 94.01% for the second half of 2015. This suggests that there is large variability between brands and email service providers. Good deliverability requires constant vigilance and discipline. Marketers should continue to look for ways to engage their subscribers so that a greater percentage of their messages make it to the inbox.


Domain-based Message Authentication, Reporting & Conformance (DMARC)New delivery tools continue to emerge to assist with brand and consumer protection, the most recent of these being DMARC. This new service allows companies to receive feedback from global ISPs regarding any potential misuse of their corporate brand, including fraud or phishing for a recipient’s personal information. In Q2 2015, the Canadian Government published numbers representing an approximation of the global totals of phishing emails - the rates of successful phishing attacks are alarming:

• 156 million phishing email messages sent globally per day.

• 16 million make it through filters, for a 10.2% success rate.

• 8 million are opened, for a 50% success rate.

• 800,000 are clicked, for a 10% success rate.

• 80,000 people fall for a scam every day and share their personal information.

These numbers reflect the poor controls against phishing compared to generic spam.

Inbox Marketer has implemented this technology to protect our brand and, over the course of 2015, we monitored and stopped hundreds of thousands of misleading emails from using our brand. These emails targeted consumers with illegal service offerings, scams, and pharmaceuticals, stating they were from one of our domains. Marketers need to be vigilant and proactive.

Talk to Inbox Marketer’s Deliverability and Privacy team to get more information on how you can stay informed and stay ahead of these misleading emails.

Smart Marketer Tip:Deliverability can be measured by a third party Inbox Placement Rate (IPR) monitoring solution tool like 250ok or Return Path. IPR tools measure the destination of the messages and it forecasts the proportion of messages that will be delivered to one of three places: the inbox, the junk folder, or “missing.” Deliverability is a critical variable and if managed poorly will lead to reduced engagement metrics and a lower ROI. These tools give great insight into the potential placement of emails and provide an opportunity, pre-deployment, to evaluate email messages and make any necessary changes to improve deliverability.

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SECTION 8: The View from the C-Suite By Geoff Linton, President, Inbox Marketer

Email is really evolving as the marketing tool and weapon of choice. According to Gartner’s “Hype Cycle for Digital Marketing”, email marketing is at the “Plateau of Productivity” stage, as its benefits have become widely demonstrated and accepted. While many marketers still primarily use email for targeted and efficient reach; the real nuggets are in the data that email creates. Leading emarketers are applying more science and rigour into their marketing. Clickstream metrics are useful indicators but CMOs want big breakthroughs and proof of attribution. Below I discuss a couple of industry best practices through two different lenses:

1. The Operations and Executional PerspectiveCampaign metrics and trends indicate how your messages are performing. Benchmarking is a useful way to flag opportunities and give your boss some bragging points. Improvements and momentum are good, but you need to look deeper. Make sure you monitor the health of your email lists by monitoring your active/inactive rates and do more list vetting/scoring. Email lists tend to fatigue much faster than you might think, and it is important to track migration between deciles.

In 2015, we were pleased to see many of our clients undertaking more rigorous testing. They’re doing a lot more creative testing and optimization (templates and relational content) to try to improve relevance. A cutting-edge area of creative learning comes through eye-tracking testing, where “message scientists” deconstruct eye-flow and measure viewability, stickiness, etc. Tracking CTRO% has proved a useful metric for creative teams because it is a normalized measure of message engagement.

Drilling down into behavioural science provides actionable insights. Understanding customer behaviour and optimizing targeting is a key goal. Analytics teams should track different cohorts and clusters to see their longitudinal engagement. Tip: overlaying psychographic profile data can be an eye opening experience of who your email subscribers are and who they are not! For operational managers, measuring the high impact executional levers that you control is important. Email is a data-driven medium so marketers need to track the key variables around: Target, Offer, Creative, and Timing. The topic of context adds a whole other dimension on contact strategy and engagement!


2. The Big Picture (Strategic Perspective) CMO’s want transformational results, but there is no one magic metric that spells success for the C-Suite. Significantly reducing costs, lifting revenue, or building assets are always key goals. Leading marketers typically track a handful of key data points to obtain a true measure for the health of a business. Inbox Marketer is a proponent of Harvard’s Balanced Scorecard model that includes four categories: Customer, Learning & Innovation, Internal Operational Processes, and Financial Outcomes. When applying the CLIF framework, data-driven marketers typically put the most weight on Customer and Financial. The best strategic measures for the Customer category are: satisfaction, retention, and lifetime value (LTV). Improving retention is powerful, a +5% lift can increase profits by 30%-70%. (Note: using control groups and backend analysis, one of our telco clients generated a +2% lift in retention in one year). There are a number of financial measures ranging from the traditional favourite of ROI, to more specific email measures like Revenue Per Email sent (RPE). If revenue numbers aren’t available then our clients use Cost Per Click (CPC) as a good proxy for financial efficiency. We typically see that eLeaders reduce their CPC each year by 20%-40%.Marketing departments are finally starting to better figure out the role of email marketing to drive bottom line results and impact KPI’s. Building sustainable competitive advantages and profitably changing customer behaviour should be the goal for all data-driven marketers.

Using BenchmarksBenchmarking is a useful exercise for marketers because it helps assess their program’s success relative to the “average.” Keep in mind that although “average” benchmarks can help gauge email performance, these benchmarks vary on several factors including: the sender’s brand and reputation, how the metrics are calculated, and the industry sector they are in. We suggest calculating yourown “weighted” benchmarks using a cross-section of sources. Find the leaders in your sector but also look outside your industry. Use these benchmarks to gauge your organization’s performance and make sure you make continual improvements to stay into the top portion of your sector.

Inbox Marketer is a leading email marketing services and technology solutions company servicing clients across North America. We provide expert strategy with turnkey execution

for mid-size and enterprise brands.

(877) 994-6664 | [email protected] | inboxmarketer.com

Geoff Linton, President and Co-Founder Geoff is a direct marketing expert with more than 25 years of applied experience in both client and agency roles.

Chris Winter, Marketing & Research Asst.Chris is responsible for managing marketing content, research, and social media channels for Inbox Marketer.

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2016 - MojoWeb · 2016-04-04 · marketing industry. Consumers are now connected 24/7, accessing content anywhere, at any time, and on multiple devices. Digital marketing now represents