EPSILON Q4 2009 EMAIL TRENDS AND BENCHMARKS

1. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITAL
EPSILON Q4 2009 EMAIL
TRENDS AND BENCHMARKS
Research: February 2010
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2. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITAL
EXECUTIVE Trends and Benchmarks study shows an increase in
The Epsilon Q4 2009 Email
SUMMARY
both open and click rates compared to the fourth quarter of the previous year.
These findings show that email remains a critical tool for marketers in particular
during the highly lucrative holiday season.
This report also delves into trends in specific verticals including Financial Services, Pharma, Retail and Consumer
Packaged Goods (CPG) which have had strong overall performance. Marketers within these industries are incorporating
email marketing strategies designed to engage consumers on a one-to-one basis.
In addition, a study from Return Path, an email reputation services leader, revealed that Epsilon’s client base had
significantly higher deliverability in Q4 2009 with 94.1% of Epsilon emails making it to the inbox. In comparison, Return
Path reported an average deliverability of 84.0% across their sample of US and Canada commercial email over the
same time period. The study tracks the delivery, blocking and filtering rates and reviews data from 45 Internet Service
Providers (ISPs) and more than 500,000 campaigns in the US and Canada.
The Epsilon Q4 2009 Email Trends and Benchmarks study is compiled from over 7 billion emails sent by Epsilon in
Q4 (October – December) 2009, across multiple industries and approximately 170 participating clients. This
benchmark report should be used only as a guideline, since specifics for each company will drive results.
Q4 2009 OVERALL PERFORMANCE
• Open rates increased 5.3% from the same time last year, with 9 of the 13 reported
industries increasing over Q4 2008.
• Click rates (5.9%) increased slightly from Q4 2008 (5.8%).
• Average volume per client is up 25.8% from last quarter and 9.8% from Q4 2008.
• The non-bounce rate (93.9%) remains unchanged compared to this time last year.
Email Non-Bounce, Deliverability, Open
and Click Rates
100% 93.6% 94.4% 94.1% 94.1% 93.5% 94.1%
93.1% 93.4% 93.2%
90%
93.9%
90.1% 87.2% 91.3%
80%
79.3%
70%
60%
50%
40%
30%
22.1% 22.2% 21.9% 22.0%
20% 19.8% 19.9% 18.8% 19.8% 20.9%
10% 6.4%
6.1% 5.9% 5.9% 5.8% 6.1% 5.9% 6.2% 5.9%
0%
Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409
Non-Bounce Deliverability Open rate Click-through
Return Path’s Delivery Rate for first half of 2009
Starting Q407, data represents all DREAM and DREAMmail clients
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3. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITAL
INDUSTRY PERFORMANCE
Consumer Products CPG and Consumer Services Telecom both saw an increase in all three major metrics –
deliverability, opens and clicks – compared to last year. Financial Services General, Financial Services Credit Card/
Banks, and Consumer Products Pharmaceutical had the highest increase in open rates compared to the previous year.
Open Rate Comparison Click Rate Comparison
(Q4 09 vs Q4 08) (Q4 09 vs Q4 08)
21.6% 4.3%
Business Products and Services General 28.8% Business Products and Services General 7.8%
16.9% 4.9%
Business Publishing/Media General 18.7% Business Publishing/Media General 6.1%
20.9% Q4 2009 Q4 2009
Consumer Products CPG Consumer Products CPG 10.4%
16.0% Q4 2008 8.4% Q4 2008
29.6% 9.7%
Consumer Products Pharmaceutical 21.0% Consumer Products Pharmaceutical 6.1%
14.2% 5.1%
Consumer Publishing/Media General 16.4% Consumer Publishing/Media General 7.0%
Consumer Services General 19.7% 3.7%
19.5% Consumer Services General 3.9%
23.7% 5.4%
Consumer Services Telecom 20.9% Consumer Services Telecom 5.4%
Financial Services CC/Banks 29.7% 9.5%
31.4% Financial Services CC/Banks
4.7%
Financial Services General 35.5% 7.9%
35.1% Financial Services General
8.5%
Retail Apparel 15.3% 4.4%
13.1% Retail Apparel
3.5%
Retail General 21.9% 7.3%
20.6% Retail General 6.0%
17.2%
Retail Specialty 18.7% Retail Specialty 2.9%
4.0%
Travel/Hospitality Travel Services 22.7% 4.9%
20.1%
Travel/Hospitality Travel Services 4.2%
FINANCIAL SERVICES
Within the Financial Services Credit Cards and Banks category, click rates were higher in 2009 compared with
2008. Open rates were steady throughout 2009, ranging from 27.4% to 29.7%. Financial Services marketers tend
to rely on transactional email messaging such as account statements as the foundation of their email strategy.
Consumers expect and want these highly relevant communications, driving the response rates of Financial
Services messages.
CC / Banks Open Rates CC / Banks Click Rates
35% 31.4% 10% 9.5%
28.9% 28.3% 28.9%
30% 7.8%
29.7% 8%
25% 27.9%
20% 27.4%
23.1% 6% 4.8% 4.5%
15% 5.3%
4% 4.3% 4.7%
10%
5% 2% 3.4%
0% 0%
Q1 Q2 Q3
Q1 Q2 Q3
2008 Volume 2009 Volume
2008 Volume 2009 Volume
2008 Open Rate 2009 Open Rate
2008 Click Rate 2009 Click Rate
RETAIL
In 2009 the Retail industry had higher volumes, open rates and click rates compared to 2008. Retail marketers
are becoming more sophisticated and many utilize real time messaging and loyalty programs to drive sales. In
addition, a number of retailers have merged off- and online databases to create a comprehensive view of each
individual consumer allowing these retailers to better target and create a higher level of relevancy.
Retail Click Rates
Retail Open Rates 8% 7.3% 7.3%
25% 7% 6.7%
22.9% 23.3% 22.1% 21.9% 6.0%
20% 6%
5% 6.0%
19.1% 20.6% 5.2%
15% 17.6% 4% 5.0%
16.3% 5.5%
10% 3%
2%
5%
1%
0% 0%
Q1 Q2 Q3 Q1 Q2 Q3
2008 Volume 2009 Volume 2008 Volume 2009 Volume
2008 Open Rate 2009 Open Rate 2008 Click Rate 2009 Click Rate
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4. STRATEGY AND ANALYTICS / TARGETING / CREATIVE / TECHNOLOGY / DIGITAL
PHARMA
Within the Pharma industry both open and click rates rose in 2009. The industry has experienced a transition
from traditional advertising towards a more direct approach. By leveraging direct relationships with consumers,
Pharmaceutical and Healthcare email marketers builds brand awareness, loyalty and adherence.
Pharma Open Rates Pharma Click Rates
12%
35% 9.7%
29.6% 10% 8.4%
30% 26.6% 25.1% 26.5% 8.3%
7.6%
25% 8%
2O% 19.0% 21.0% 6% 7.2%
18.8% 6.2% 6.1%
15%
10% 4%
5% 2%
0% 0%
Q1 Q2 Q3 Q1 Q2 Q3
2008 Volume 2009 Volume 2008 Volume 2009 Volume
2008 Open Rate 2009 Open Rate 2008 Click Rate 2009 Click Rate
CONSUMER PACKAGED GOODS
Like the Pharma industry, CPG has a long history of using traditional advertising to drive sales and build
awareness. This industry has been adopting new digital strategies such as email marketing. In 2009 CPG email
volumes increased and so did open rates. While CPG companies are less likely to utilize email marketing for
online sales, email is still viewed as critical for building brands and establishing consumer loyalty.
CPG Click Rates
CPG Open Rates 14%
25% 11.6% 10.4%
12% 11.0%
19.8% 20.9% 9.7%
20% 17.1% 18.2% 10%
15% 18.2% 8% 9.3%
16.4% 16.3% 16.0% 9.2% 9.0%
6% 8.4%
10%
4%
5%
2%
0% 0%
Q1 Q2 Q3 Q1 Q2 Q3
2008 Volume 2009 Volume 2008 Volume 2009 Volume
2008 Open Rate 2009 Open Rate 2008 Click Rate 2009 Click Rate
CONCLUSIONS
The Q4 2009 findings are consistent with overall 2009 email trends which show that email is a driving force behind
many successful marketing campaigns. According to Epsilon’s 2009 CMO Study, email received a higher budget
allocation largely due to the cost effectiveness of the channel and opportunity to incorporate advanced strategies
and analytics. Industries are adopting specific strategies based on the behavior of their customer base and the
nature of their industry. While both Pharma and Consumer Packaged Goods industries have traditionally relied on
general advertising to drive sales and increase brand awareness, many of these companies have transitioned to a
direct marketing approach. With the ability to directly connect with their core audience, these industries have had
success using email marketing to engage consumers in one-to-one conversations about brands. Financial Services
and Retail have a long history in direct marketing and both leverage advanced email marketing capabilities such as
real time and transactional messaging, loyalty programs, and triggered campaigns.
Across all industries and levels of sophistication, email marketing is a valuable tool to increase brand perceptions,
drive consumer behavior and establish long-term relationships. However, marketers must use the tool wisely to send
the right message, to the right individual at the right time. Sending irrelevant information or abusing the customer
relationship can destroy trust and alienate customers. Instead, email should be used to create value for each
individual consumer by making messages personalized, relevant and timely.
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