DM News' Essential Guide to E-Mail Marketing: Why Are Open Rates Declining?

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E-mail benchmarking data show key measures of e-mail marketing productivity such as click-through rates, click-to-conversion rates and revenue per e-mail delivered have maintained remarkable stability over the past three years. However, despite e-mail programs continuing to prove effective, open rates have declined steadily for the past five quarters.

DoubleClick recently performed an in-depth analysis that shows a combination of forces are pushing open rates down, namely Internet service provider and e-mail technology changes, file aging and evolving consumer behavior. The full analysis is available at documents/trend_reports/Q2_Trend_Report.asp

The technology changes reflect the increased adoption of image blocking by several ISPs and in Microsoft Outlook. Because a one-pixel image must be rendered for an e-mail to be measured as open, image blocking tends to reduce the open rate recorded. For example, a preview pane view may no longer record as an open, where before the adoption of image blocking it likely would have.

DoubleClick also identified the effect of file aging on open rates. New addresses to a customer file tend to outperform older addresses, leading to natural downward pressure on open rates as new addresses become a smaller percentage of a marketer's overall file.

Finally, changes in consumer behavior also are affecting open rates. With the ever-rising volume of e-mails that consumers receive, they are increasingly selective about which e-mails they open. However, given the stable performance in clicks and conversions, the selectivity seems to reflect when a consumer is in the market for a particular product or service.

DoubleClick has commissioned a study that will examine the branding impact of e-mail marketing to further explore this aspect of inbox visibility. It should shed further insight into how consumer behavior affects open rates.

Given these factors, a marketer should consider several things to help ensure recipients continue to open their e-mails.

ISP technology changes can be mitigated by asking your subscribers to add your address to their contact list, instructing them on how to turn images back on by default in Outlook and Outlook Express and by following general e-mail best practices guidelines.

File maturity, while seemingly negative in relation to overall open rates, is actually a valuable source of customer behavior data that e-mail marketers can use to segment their customer base better.

Analyzing older customers who are active (opening and clicking) compared with those who are inactive can be revealing. Because older, inactive e-mail addresses make up a sizable part of any marketer's file, there is a huge opportunity to reactivate these customers, especially if they are active in other marketing channels.

Finally, consumers are becoming more selective, so e-mail marketers must follow their customers and adjust their tactics or risk further deterioration in open rates, as well as other measures of e-mail productivity.

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