Email Fedma Benchmark 2011
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The document discusses the key findings and themes from the FEDMA Pan European Email Marketing Benchmark Report for 2010. It focuses on end user research and covers topics like whether email marketing is handled in-house or outsourced, expected expenditures and performance for 2010/2011, deliverability challenges, the strategic importance of email marketing and weaknesses in testing regimes. The document also discusses channels used, types of marketing content, and country variations in email marketing approaches.
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Email Fedma Benchmark 2011
- 4. Number of marketing employees in company
- 5. In house or outsourced processes?
- 8. ESP reported hard bounce rates
- 13. Newsletters
- 14. Newsletters
- 15. Sales/ Product-Service (acquisition or on-sell)
- 16. Frequency of sales offers
- 17. Customer surveys
- 18. Win-back
Editor's Notes
- 464 end user interview/ surveys completed 75 ESP surveyed For the quantitative benchmark questions, respondents were asked to either a) report the results of last 3 email campaigns individually, or b) the average of the last 3 email campaigns sent out. 16 countries
- Germany Austria Switzerland Hungary Slovenia United Kingdom Ireland Sweden Denmark Norway Finland Belgium Netherlands France Spain Italy a slight respondent bias towards B2B organisations, with 56.2% of companies marketing solely to other businesses, with 28% marketing to both businesses and consumers, and the remaining 15.8% representing consumer-only brands or offerings. The most represented sectors are business services/ consulting and hi tech organisations (both 12%), Media/ publishing (11%), IT small & medium sized B2B firms (9%) other large B2B organisations (7.5%), manufacturing (5.5%) and wholesale/ distribution (4.75%). Other sectors with less than 5% are financial services, telecommunications, ecommerce and internet pure-plays, utilities, retail, travel, entertainment, health, education and not for profit.
- Almost two thirds of respondent organisations employ less than 4 people in their marketing department, with 23.7% employing more than 10 marketing personnel. Whilst email marketing has enjoyed a decade of rapid growth, the average time that organisations have adopted email as a marketing channel is just under 5 years. Variation ranges between a mean average of 3.5 years for Norway, Italy, Spain, Hungary, Finland and Slovenia to 6.9 years in France.
- Given the likely pressure on resources that many marketing teams are under (62.6% of marketing departments are staffed with 4 or less people), it is notable that 56.7% of all companies still undertake their email marketing entirely in-house. Only 2.3% outsource everything, suggesting activities such as campaign definition and at key parts of the operational process are still managed in-house. 40.9% say they manage a mix of outsourced and in house activities. B2C brands are more likely to outsource all marketing efforts, although that still accounts for only 6% of respondents, with most (55%) preferring to do everything in-house. B2B brands on the other hand have not as yet considered outsourcing email marketing in its entirety, with 62% doing I all in-house. With greater sensitivity in the practise of direct to consumer email marketing and the need for correspondingly more support and expertise, perhaps these differences are not altogether surprising. A few trends are likely to change that over the next couple of years, and given the number of Email Service Providers (ESPs) that operate a Software as a Service (SaaS) model: -The need for greater (ie more sophisticated) targeting and personalisation. -Increased data mining and profiling activity, as segmentation by online personas and behaviour becomes more widespread. -Tighter definition and management of permissions. Greater use of campaign rules. Integrated use of email with online advertising, social media and other interactive channels. In other words, marketing is getting a more complicated discipline, customers need to be engaged with across many more channels than ever before, and are far less predictable in their purchasing and/ or engagement patterns. It is therefore becoming increasingly difficult to cover the ground through a stretched, in-house resource, and increasingly unlikely that the necessary skills exist within an in-house team to do everything.
- Spend on email is forecast to grow over the course of 2010, with 2/3rds of respondents expecting to grow their investment in email marketing. Tellingly, only 3% would expect to decrease their spend in this time period. This clear trend is reflected in Ipsos Mori’s poll for the Chartered Institute of Marketing report The Shape of Digital to Come?. S enior marketing practitioners in Q4 2009 were polled to ask how their spend would vary year on year across different marketing activities. Email (1.6%) and online (2.5%) were expected to be the biggest winners in attracting additional marketing investment, at the expense of offline Advertising (-3%), sponsorship (-2.3%) direct mail and internal marketing (-1.6% each). Geographical markets will vary according to their relative maturity. Continued growth will depend upon a number of factors: The first is ongoing effectiveness of email as a push marketing medium, which depends principally upon targeting/ use of properly permissioned and managed customer information databases; the relevancy of campaigns and careful application of local/ EU laws. If greater spend is driven by higher volumes in conjunction with looser qualification of who receives what and how often, then it follows that more people will receive less relevant unsolicited commercial email (UCE), and Return on investment (ROI) will drop. Secondly successful growth can only come through careful stewardship of customer information databases, and developing its use further into the consumer/ buyer engagement process. For example, its expanding role within integrated marketing campaigns, lead generation, social media and customer management programmes. These are ripe for expansion as more sophisticated consumer engagement rule sets are defined and applied that reflect buyer and customer behaviour; and permit practitioners to act upon it quickly. Thirdly delivery to inbox will be increasingly seen as a barrier to overcome, especially in B2C.
- Deliverability rates are expected to improve or remain the same, and a small percentage do not measure, presumably those undertaking email marketing in-house using generic transmission. Just 13.5% believe deliverability will worsen. Respondents clearly believe that their use of the email medium is improving, based on the overwhelming majority of 56% who believe their click through rates will increase. Just 8% of respondents expect their click through rates to decrease. Volumes are expected to rise across the board, with 72.3% of respondents planning on sending out more marketing emails, and practically no one expects to do less. Yet opt out rates as a proportion of total volume are expected to hold steady. This assumes at least as much or better targeting in spite of the higher volumes, which suggests a) email marketing taking a greater channel share of a company’s overall marketing plan, at the expense of direct mail and telemarketing, and b) Further targeting leading to a proliferation of campaigns of volumes that are similar or less than current ones. One thing is certain: for the expected performance improvements to occur against a backdrop of higher volume, targeting and relevance will need to at least be maintained.
- If hard bounce rates are a primary measure of list quality, there is scope for improvement in email data quality, with 15% of all campaigns seeing hard bounce rates of more than 7%, and a further 20% experiencing hard bounces of between 3%-7%. This finding is echoed in Econsultancy’s Email Marketing Industry Census 2010 in association with Adestra. The report highlights quality of database as the biggest barrier to effective email marketing. This is cited as a problem by 61% of marketers, up from 44% in 2009. Compared to end user respondents, results favour those campaigns conducted exclusively via ESP platforms. There is little difference between countries in hard bounce rates, with France, Germany, Spain and Italy all reporting hard bounce rates of less than 2%, whilst Sweden, Norway, Belgium, UK, (Romania) averaging 4-6%.
- When assessing all these stats, a key question of how deliverability is measured. Most practitioners will determine deliverability as delivery to Internet or to mail server as the primary measure, but delivery to inbox is an increasingly key metric. This is because reputation, the measure of trust that an ISP places on the sender, determines whether the majority of emails transmitted in a campaign are blocked.
- Increasingly important, in particular in B2C, is the issue of deliverability to inbox. If reputation is poor, acquired through issues like indiscriminate use or poor targeting, large groups of consumers belonging to the same ISP domain, for example such GMail or Hotmail will not receive the email into their inbox. B2B deliverability is also an issue, albeit a different cause, due to corporate systems like Postini, Symantec and Messagelabs. Companies like Return Path and Pivotal Veracity use seeds or panels to measure the difference between deliverability to Internet/ server vs inbox. Research from Return Path suggests that approximately an additional 10% of European email volume does not make it into the inbox of intended (source: The Global Email Deliverability Benchmark Report, 2H 2009). The same report indicates deliverability to inbox to be less of an issue in Germany (with one or two ISP exceptions) and more of an issue in the UK and France (11%). Non delivery to inbox is accounted for by a third being placed directly into spam folders, and two thirds going missing. This often tends to be caused by certain domains rejecting the majority of a campaign, and can be identified by looking at ESP reports that break down open rates and click through by domain name. If Google believes your IP range to have a poor reputation, you will see that Gmail customers have an exceptionally low or non existent open and click though rate compared to other domains within the same campaign. If ISPs migrate from identifying sender by IP range to identifying the sender by their domain name, as some commentators believe may have already started to happen, this issue could become even more significant.
- Not surprisingly given the growth forecasts, most respondents see email marketing as strategically important in meeting marketing objectives, with 46.% characterising it as very important, whilst 41.4% see it as somewhat important. Analysis by country shows that whilst the majority see it as very important overall, companies in Switzerland, Norway, Germany and Austria generally see it as somewhat important. Analysis by country shows that whilst the majority see it as very important overall, companies in Switzerland, Norway, Germany and Austria generally see it as somewhat important. Where email is primarily used to support direct sales and lead generation programmes, its importance will be seen as correspondingly higher.
- Are users reconsidering how email marketing is used, in the context of how strategically important it is considered? The relatively high proportion of practitioners who do not measure beyond the basics is concerning: 26% of end users were not able to say what their average opt out rates were, whilst 57% experienced rates of less than 1%. Between a third and half of end user respondents were not able to measure conversion to sale, for example - the rate depends on the email marketing use, with newsletters worst and acquisition best. This echoes the Email Marketing Industry Census 2010 by Econsultancy in association with Adestra which shows similar lack of insight . When asked the same question about their clients, ESPs beg to differ, characterising end users as much more focused on tactical use vs strategic use of email marketing, according to the DMA UK benchmark survey Q3 2009. That survey also highlights just 38% of email marketing driven by some data, and only 16% whose content is driven entirely by data. In other words, when end users overwhelmingly talk about the strategic importance of email marketing, that belief is yet to translate into rigorous action, and there is a quite some way to go.
- The low completion levels of individual campaign performance for regular newsletters suggest that organisations are less likely to measure newsletter performance to the same extent as other email marketing purposes, such as acquisition. Yet newsletter and related customer management activity is likely to be a main growth area over the next 12 months, with the growing recognition that email marketing is especially well suited to these applications. This is reflected in the difference in click through rates between newsletter and sales or product/service information campaigns, which average 17% higher. 1 in 4 organisations do not currently appear to measure opt out and hard bounce rates to keep current their customer database and preferences, or at least do not have ready access to that data.
- Of the 79 respondents who sent newsletters via email, 70% on average were used in context of B2B activity, 10% were a mix of B2C and B2B, whilst 20% related to B2C activity. The most popular campaign frequency for sending email newsletters out is monthly. In Italy and Slovakia the average frequency increases to weekly, whilst Sweden, Norway and Spain the average falls to quarterly sends. There appears to be no correlation between other factors such as bounce or opt out rates and the frequency with which newsletters are sent. Infrequent newsletters suggests a one size fits all approach to newsletter content, whereas the scope for dynamic content ordering, for example, to reflect different customer segments and recent behaviour arguably increases with frequency. More frequent newsletters certainly demand closer integration with an up to date customer information database to reflect recent transactional history or other pertinent factors.
- Average click through rates vary tremendously by country for this type of campaign activity, and need to be viewed cautiously as smaller countries report results from a low respondent base. Notwithstanding the differences are marked, with Finland reporting less than 1%, and Austria averaging 21%. Also at the low end of reported rates is Norway, with 2%, yet Sweden averages 6% whilst Denmark sees average rates of 11%. UK, Germany, Ireland, Switzerland and Slovenia average 6-8%. Spain, Belgium, Hungary, Denmark average 13-17%. Unsurprisingly, sales and product/ service information campaigns generate conversion to sales 4x better than newsletters or customer surveys, with 12.5% of respondents claiming rates of between 2%-2.25%.
- Those countries most likely not to send promotional content by email are Finland, Spain (33.3%), Italy (28.6%) and Germany (29%). Privacy regulation, and an organisation’s interpretation of it, is likely to determine corporate policy towards UCE in many cases. It is surely no coincidence that those countries with the most restrictive and/or punitive data protection laws are those where email marketing is least used as a sales channel.
- 53% of respondents do not use email marketing for customer or product (development) surveys. Those that do average open rates of 36% (UK); 25% (Italy); 18% (Switzerland); 33% Denmark. In countries where responses were isolated and therefore difficult to draw statistical conclusions from with great confidence, nevertheless open rates ranged from the 20% to 40% range, with fewer outlying results sub 15% or higher than 50%. These healthy open rates, whilst not necessary conclusive in their own right, are allied to high click through rates that start at circa 7% and can top 25%+. It goes to show that customers appreciate being asked for feedback, and represents a useful plank to a strong customer engagement strategy.
- The majority of companies do not use email marketing for win-back campaigns following the loss of customers. Click through rates are comparatively high, with 25% of all win-back campaigns achieving rates of between 10%-12%. This is 2x the results reported for sales and product/ service information campaigns, and 60% better than newsletter click through rates. The minority of respondents who do use email for win back, have experienced excellent results, with conversion to sale or action of between 2% and 5%. Ranges are Denmark and Netherlands (4%), Austria (3%), UK (2.5%), Germany and Switzerland (2%), France and Slovenia (2.25%).
- Newsletters, customer surveys and win back Integrated use with other channels Practitioners would do well to test more rigorously each element of an email campaign, beyond the generally adopted focus on subject lines, sender name, time of day and week, and spam filter scoring, as illustrated in the Email Marketing Industry Census 2010 by Econsultancy. The same report indicates that between 33% and 58% of client practitioners are not testing creative templates, frequency , landing pages, and multivariate campaign strategies. This points to the need for greater segmentation, and carefully planned user experience to support better engagement within the email and online.