Ipt Email Marketing Studies

Slide 1: IPT Email Marketing Studies 2004-06 RESULTS Tom Fuller Managing Director IMRS

Slide 2: What’s the Story?

Slide 3: What’s the Story?  The environment for marketers continues to be a challenging one  But from the Consumers’ point of view it’s a problem solved This gives us room to experiment—and operate  Of course, more changes are coming—Goodmail, etc.

Slide 4: Consumer research study  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 5: Consumer research study Q: Does your email account have a special folder where most of the direct emails or span is directed to? R=1,192 Don't know/Not No sure Most have 22% 6% them… Yes 72%

Slide 6: Consumer research study Q: How well does the special folder for direct emails and spam work? R=857 …and they 70% seem to do what 60% 50% consumers 50% want them 40% 35% to do 30% 20% 12% 10% 2% 1% 1% 0% Very well Pretty well Not very well Mistakenly Not well at all Don't directed know?Not sure

Slide 7: Q: Do you ever look at the emails in this special folder for direct mail or spam? R=861 Feeling in Don't know/Not control of No sure direct mail 1% 20% increases readership? Yes 79%

Slide 8: Q: The companies sponsoring this survey make a distinction beween direct marketing emails and spam. When you think of emails, do you also make that distinction? 60% 46% 40% 21% 21% 20% 8% 4% 0% Yes Maybe, but No Never thought … Don/t know/Not sure

Slide 9: 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 10: Consumer research How many email accounts do you have? Why is this important? Well, how many of your emails will your target actually see?

Slide 11: Number of Email Accounts N= 1,188 Don't know/not sure 1% More than four 12% Four 9% 73% 2004 have Three 20% 2006 more than one Two 32% account One 26% None 1% 0% 5% 10% 15% 20% 25% 30% 35%

Slide 12: Consumer research How many of these email accounts do you check every day?

Slide 13: Frequency of checking Email Accounts N=1,187 How many of these accounts do you check every day? Don't know?Not sure 1% More than four 6% Four 6% Three 13% 73% Two 32% check One 41% 1 or 2 every None 2% day 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Slide 14: Consumer research What type of email accounts do you have?

Slide 15: Types of Email Accounts N=2,110 Don't know/Not sure 1% Other 3% Academic-based 3% 74% use private, Work-based 19% web- based From a local/regional ISP 29% email Web-based (Yahoo, Hotmail, 45% etc.) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Slide 16: 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 17: 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% 51% say web- 0% 10% 20% 30% 40% 50% 60% based mail is their most important account

Slide 18: Consumer research Frequency of opening DM Q: How frequently do you open a direct marketing email?

Slide 19: Frequency of Opening DM N = 1,186 50% 38% say 40% daily or 2 – 3 30% times a week —and 30% another 30% say more 19% 19% 19% than monthly 20% 10% 8% 3% 0% Never Rarely Occasionally Frequently Daily Don't know/Not sure

Slide 20: 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 21: Frequency of Click-Through N = 1,187 19% click through 1 – 3 40% times a week 33% 31% 30% 20% 15% 10% 10% 6% 4% 0% Never Rarely Occasionally Frequently Daily Don't know/Not sure

Slide 22: 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 23: Frequency of Purchase from DM N = 1,187 37% say monthly 50% 47% —or less 37% 40% 30% 20% 8% 7% 10% 1% 0% 0% Never Rarely Occasionally Frequently Daily Don't know/Not 8% purchase sure at least once a week

Slide 24: Consumer research Motivators Q: Have you ever entered a competition or prize draw or sweepstakes after viewing a direct email marketing message?

Slide 25: Motivators N = 1,179 Sweepstakes or prize DK/NS draws do work 7% No 21% Yes 72%

Slide 26: Consumer research Is this invitation to participate in market research considered Direct Mail? Q: You were asked to participate in this market research study by an email invitation. Do you consider this emailed invitation to be:

Slide 27: Is an invitation to Participate in Market Research Considered Direct Marketing? 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 Consumers classify direct mail on their own—it’s not just research. Newsletters, refunds, etc.

Slide 28: 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 29: Incentive to Open N=1,188 Don't know/Not sure 4% Trusted brands more important, None of the above 6% money off less so than 2 years ago 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 30: 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 31: Primary Incentive for Opening DM Email 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% …but money still Discount or an offer money/purchase 14% 27% works. 0% 10% 20% 30% 40%

Slide 32: 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 33: 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 Before work or school or after dinner

Slide 34: Consumer research Time Emails Are Opened (2) Q: Generally speaking, how quickly do you open those direct marketing emails that you do open?

Slide 35: Time Before Opening DM N = 1,185 Both windows are getting shorter—two hours becomes one, two days becomes one—driven by volume? 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 36: 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 37: 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 38: IMRS Panel Profile 313,000 respondents as of 1/3/2006 45.3% 4 Children 5 Children 5% 1% 3 Children 10% Male 54.7% Female None 2 Children 48% 30% 21% 25% 20% % Split 15% 1 Child 10% 15% 5% 0% 18-24 25-34 35-44 45-54 55-64 65-74 75+

Slide 39: IMRS panel profile 12% Yorkshire & Lincolnshire 9% 10% Wales 5% Midlands 12% 8% South West England 8% % Split 6% South East England 31% Scotland 8% 4% Northern Ireland 5% Northern England 5% 2% North West 11% 0% Eastern Counties 7% NA Channel Islands 0% Not applicable 3% 3% 13% Full Time (30+ hours a week) 10% Part Time (8-29 hours a week) Retired Not Working 61% 13% Unemployed

Slide 40: 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. (Understatement of the year…) •Almost three-quarters of home Internet users in the UK have a broadband connection (In 2003 it was 11%) •Top 10 Brands experiencing greatest growth in Broadband audience (Aug 04-Aug 05):

Slide 41: Industry research Trends in Email Marketing First, hot off the presses…

Slide 42: Industry Stats 2005 What’s the story? •You are learning •You have more options •You are outsourcing more •You are more interested in customer acquisition •…and in accountability—Vive le ROI! •But where is the integration? Is Direct Mail a tactical one-off with handy metrics? Can it be integrated with other elements of a marketing strategy?

Slide 43: Industry Stats 2005 Nielsen/NetRatings UK NetSpeed home data, October 2005 1200 1000 800 600 Disney online Blogger 400 MyOffers 200 0 Yeah, MyOffers is BB audience BB audience ours. Aug 04 '000 Aug 05 '000

Slide 44: Industry Stats 2005 • B2C email marketing will double from 2005-2010: the UK & Germany lead the way. 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 45: Industry Stats 2005 • Internet use outstrips TV viewing for the first time Brand Republic 8 Mar 2006 • Gates says future of advertising lies on the internet Brand Republic 27 Oct 2005

Slide 46: IPT Industry research study  February 2006  IPT questionnaire microsite  Email invitation to to 9,000 direct marketing professionals  Broad selection of industry sectors for balanced sample

Slide 47: Industry research study Are you planning to increase your spend on email marketing?

Slide 48: Increase in email marketing spend over the next year 80 51% say their budgets 70 will grow this 60 year 50 2004 40 2005 30 20 10 0 Don't know can't say Stay the same Increase in the next year

Slide 49: Industry research study How do you use email marketing?

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

Slide 51: Industry research study How do you send your campaigns?

Slide 52: Email delivery Into the 50 45 hands of professionals 40 35 30 2004 25 2006 20 15 10 5 0 In-House ASP Solution In-House Outsourced

Slide 53: Industry research study Do you check your emails for junk mail triggers? (Words or phrases that ISPs use to decide if your message should be blocked)

Slide 54: Use of spam filter checks More, but not 70 enough 60 50 40 2004 2006 30 20 10 0 Yes No

Slide 55: Industry research study How clean are your email lists?

Slide 56: Level of data hygiene 60 We are getting 50 better (but could do more) 40 2004 30 2006 20 10 0 8 to 10 4 to 5 1 to 3

Slide 57: Industry research study Do you use open & click-through tracking?

Slide 58: Use of open & click through tracking The tools to 70 check this are getting 60 easier to use 50 40 2004 2006 30 20 10 0 Yes No Don't Know

Slide 59: Industry research study Do you track actual sales?

Slide 60: R.O.I. tracking 60 As more DM gets 50 outsourced, we leave the 40 tracking to the pros? 2004 30 2006 20 10 0 Track to purchase Track to enquiry Track to clickthrough Do not measure ROI

Slide 61: Industry research study How well do you understand the latest email legislation?

Slide 62: Understanding of the Privacy & Electronic Communication Legislation Yesterday’s 60 news? Or too many 50 new faces in the 40 marketing dept? 2004 30 2006 20 10 0 Very well Somewhat Not aware of it

Slide 63: Snapshot Typical online consumer  multiple email addresses  most marketing emails read at home same day as received  42% have purchased as a result of an email communication Typical email marketer  planning to increase use of email  comfortably using email for customer acquisition  greater reliance on proven technology  greater use of campaign tracking

Slide 64: Stories from 2 Worlds Typical online consumer  Email is a problem solved  Control is the key  How would he or she react if we bypass the bulk mail folders? Typical email marketer  If winning the bulk mail folder is the new game, do you email more frequently? Deliver on ‘click to see bulk folder?’  Does anyone leverage email with other media?