Email Marketing Studies

Slide 1: IPT Email Marketing Studies 2004-06 RESULTS Martin Kiersnowski Chief Operations Officer

Slide 2: Consumer research  Questionnaire hosted on IMRS website  Email invitations to IMRS research panel  1,231 respondents from throughout UK  47% male, 53% female, 52% married  51% in full time work  57% own home or are buying through mortgage  56% have one or more children Some questions in this survey were duplicated in a 2004 survey—where applicable, results reported for both years.

Slide 3: Consumer research Public perceptions and attitudes towards email marketing •Key finding: Although DM is often criticized by interest groups and the press, the public is far more tolerant •80% open their bulk mail folders to look at DM

Slide 4: Consumer research How many email accounts do you have?

Slide 5: Number of email accounts N=1,188 Don't know/not sure 1% More than four 12% Four 9% 2004 Three 20% 2006 Two 32% One 26% None 1% 0% 5% 10% 15% 20% 25% 30% 35%

Slide 6: Consumer research How many of these email accounts do you check every day?

Slide 7: Frequency of checking email accounts N=1,187 Don't know?Not sure 1% More than four 6% Four 6% Three 13% Two 32% One 41% None 2% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Slide 8: Consumer research What type of email accounts do you have?

Slide 9: Types of email accounts N=2,110 Don't know/Not sure 1% Other 3% Academic-based 3% Work-based 19% From a local/regional ISP 29% Web-based (Yahoo, Hotmail, 45% etc.) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Slide 10: Consumer research Primary email account Q: Do you consider one of these accounts to be your ‘primary’ or most important account for personal email messages sent and received?

Slide 11: Primary email account N=1,185 Don't know/Not 2% sure None of my 3% accounts Other 3% Academic-based 0% Work-based 5% From local/regional 35% ISP Web-based 51% 0% 10% 20% 30% 40% 50% 60%

Slide 12: Consumer research Frequency of opening DM Q: How frequently do you open a direct marketing email?

Slide 13: Frequency of opening DM N=1,186 50% 40% 30% 30% 19% 19% 19% 20% 10% 8% 3% 0% Never Rarely Occasionally Frequently Daily Don't know/Not sure

Slide 14: Consumer research Frequency of click-through Q: Have you ever clicked on a link in a direct marketing email that took you to another website?

Slide 15: Frequency of click-through N=1,187 40% 33% 31% 30% 20% 15% 10% 10% 6% 4% 0% Never Rarely Occasionally Frequently Daily Don't know/Not sure

Slide 16: Consumer research Frequency of purchase from DM Q: Have you ever made a purchase (either online or in a store) based on what you saw in a direct marketing email or a web page you visited after clicking a link in a direct marketing email?

Slide 17: Frequency of purchase from DM N=1,187 50% 47% 37% 40% 30% 20% 8% 7% 10% 1% 0% 0% Never Rarely Occasionally Frequently Daily Don't know/Not sure

Slide 18: Consumer research Motivators Q: Have you ever entered a competition or prize draw or sweepstakes after viewing a direct email marketing message?

Slide 19: Motivators N=1,179 DK/NS 7% No 21% Yes 72%

Slide 20: Consumer research Is this invitation to participate in market research considered Direct Mail?

Slide 21: Market research & DM N=1,185 90% 80% 70% 50% 30% 14% 10% 2% 3% 2% -10% Spam DM Email Neither None of the Don't above know/Not sure

Slide 22: Consumer research Incentive to Open (1) Q: When you are trying to decide whether or not to open a direct marketing email message, which of the following might persuade you to open it? Please tick all that apply.

Slide 23: Incentive to open (all) N=1,188 Don't know/Not sure 4% None of the above 6% Humorous/quirky subject 9% line 4% 20% 2004 Name of a company 27% 2006 Prize draw /incentives 20% 24% Description of an interesting 24% product or service 19% Discount or an offer 27% money/purchase 16% 0% 5% 10% 15% 20% 25% 30%

Slide 24: Consumer research Incentive to Open (2) Q: And which of these features would be most likely to make you open a direct marketing email?

Slide 25: Incentive to open (primary) N=1,188 None of the above 11% Humorous/quirky subject 9% line 3% 20% Name of a company 31% 2004 2006 20% Prize draw /incentives 25% Description of an interesting 24% product or service 16% Discount or an offer 27% money/purchase 14% 0% 10% 20% 30% 40%

Slide 26: Consumer research Time Emails Are Opened (1) Q: At what time of day are you most likely to open a direct marketing email, assuming it interests you enough to open it at all?

Slide 27: Time emails are opened N=1,181 50% 45% 39% 40% 30% 27% 22% 21% 2006 20% 2004 11% 8% 8% 10% 7% 6% 6% 0% Morning Mid-day Early Late Evening Don't afternoon afternoon know/Not sure

Slide 28: Consumer research Time Emails Are Opened (2) Q: Generally speaking, how quickly do you open those direct marketing emails that you do open?

Slide 29: Time before opening DM N=1,185 40% 34% 32% 29% 30% 22% 21% 20% 16% 2006 2004 11% 11% 10% 7% 6% 6% 4% 0% As soon as I Within 60 1-2hrs after Same day I 1-2 days 2-7 days Don/t see them min seeing them see them know/Not sure

Slide 30: Who are we?  A division of Interactive Prospect Targeting, the UK’s largest online data collector  IMRS has the UK’s largest online Market Research Panel— 313,000 registered respondents at present  We host surveys and provide sample for ad hoc projects, as well as panellists for third parties  We charge per completed survey. Our costs are low and our turnaround time is fast  We adhere to the Market Research Society’s Code of Conduct in all of our research

Slide 31: What do we do?  IMRS is a full service market research agency  Obviously, we do conduct a large number of Internet surveys – We also conduct online focus groups – We recruit for CATI surveys online – We can act as full charge supplier for complex or multi-modal projects  IMRS conducts qualitative research, both online and off  We consult with companies regarding the effective use of and response to weblogs

Slide 32: IMRS panel profile 313,000 respondents as of 1/3/2006 45.3% 4 Children 5 Children 5% 1% Male 54.7% Female 3 Children 10% 30% None 25% 2 Children 48% 21% 20% % Split 15% 10% 1 Child 5% 15% 0% 18-24 25-34 35-44 45-54 55-64 65-74 75+

Slide 33: IMRS panel profile 313,000 respondents as of 1/3/2006 3% 13% Full Time (30+ hours a week) 10% Part Time (8-29 hours a week) Retired Not Working 61% 13% Unemployed Yorkshire & Lincolnshire 9% Wales 5% Midlands 12% 12% South West England 8% 10% South East England 31% Scotland 8% 8% Northern Ireland 5% Northern England 5% % Split 6% North West 11% 4% Eastern Counties 7% Channel Islands 0% 2% Not applicable 3% 0% NA

Slide 34: Industry research Trends in Email Marketing

Slide 35: Industry stats 2005 Nielsen//NetRatings UK NetSpeed home data, including Internet applications, Aug 04 & Aug 05, October 2005  Broadband usage exploded in the UK over the past 12 months.  Almost three-quarters of home Internet users in the UK have a broadband connection  Top 3 Brands experiencing greatest growth in Broadband audience (Aug 04-Aug 05):

Slide 36: Industry stats 2005 Nielsen/NetRatings UK NetSpeed home data, October 2005 1200 1000 800 600 Disney online Blogger 400 MyOffers 200 0 BB audience BB audience Aug 04 '000 Aug 05 '000

Slide 37: Industry stats 2005  B2C email marketing will double from 2005-2010: the UK & Germany lead the way. For the first time, over half of the European online population (51%) is shopping on the Internet. The UK had the largest percentage of online shoppers, at 71% of its online population Forrester, Oct 2005  Digital agencies report massive growth as online advertising marches on Brand Republic 26 Oct 2005  THE exponential growth of online sales was revealed yesterday when the Office for National Statistics said that their value rose by 81 per cent last year. Times Nov 05

Slide 38: Industry stats 2005  Internet use outstrips TV viewing for the first time Brand Republic 8 Mar 2006  After many years of strong increases, spend on direct mail had gone into reverse. Three main causes: the rise of email marketing, better targeting of direct mail and consolidation among marketers Thomson Intermedia /KPMG: annual media spend 2005  Gates says future of advertising lies on the internet Brand Republic 27 Oct 2005

Slide 39: Industry stats 2005  UK trails the field at enforcing digital marketing laws Osborne Clark, March 2006  Fewer consumers are using work e-mail accounts to receive opt-in commercial e-mails. This trend could be driven by factors such as rapid adoption of high-speed Internet access at home and increasing consumer comfort in managing multiple email accounts, each serving a different purpose DM News, March 2006

Slide 40: Industry research  February 2006  IPT questionnaire microsite Email invitation to to 9,000 direct marketing professionals  Broad selection of industry sectors for balanced sample

Slide 41: Industry research How much of your spend is allocated to email marketing?

Slide 42: Email marketing as a % of total spend 80 70 60 50 40 2004 2006 30 20 10 0 0-20 21-40 41-60 61-80 81-100

Slide 43: Industry research Are you planning to increase your spend on email marketing?

Slide 44: Increase in email marketing spend 2006 80 70 60 50 2004 40 2006 30 20 10 0 Don't know can't say Stay the same Increase in the next year

Slide 45: Industry research How do you use email marketing?

Slide 46: Uses of email marketing 80 70 60 50 2004 40 2006 30 20 10 0 Customer Acquisition Customer Retention Cross selling Branding

Slide 47: Industry research How do you send your campaigns?

Slide 48: Email delivery 50 45 40 35 30 2004 25 2006 20 15 10 5 0 In-House ASP Solution In-House Outsourced

Slide 49: Industry research Do you check your emails for junk mail triggers?

Slide 50: Use of spam filter checks 70 60 50 40 2004 2006 30 20 10 0 Yes No

Slide 51: Industry research How clean are your email lists?

Slide 52: Level of data hygiene 60 50 40 2004 30 2006 20 10 0 8 to 10 4 to 5 1 to 3

Slide 53: Industry research Do you use open & click-through tracking?

Slide 54: Use of open & click through tracking 70 60 50 40 2004 2006 30 20 10 0 Yes No Don't Know

Slide 55: Industry research Do you track actual sales?

Slide 56: R.O.I. tracking 60 50 40 2004 30 2006 20 10 0 Track to purchase Track to enquiry Track to clickthrough Do not measure ROI

Slide 57: Industry research How well do you understand the latest email legislation?

Slide 58: Email legislation 60 50 40 2004 30 2006 20 10 0 Very well Somewhat Not aware of it

Slide 59: Snapshot Typical online consumer  multiple email accounts  primary account is personal, web-based  checks email every day  likely to respond to marketing email every week Typical email marketer  planning to increase use of email  comfortably using email for customer acquisition  greater reliance on proven technology  confident use of campaign tracking

Slide 60: Breakfast at the Savoy Breakfast at the Savoy Q&A