Where does the U.S. fall on the curve of email marketing?
Earlier this month I had the honor of speaking at the Email Marketing Evolved conference hosted by Apsis in Stockholm, Sweden. It was a great event - a mix of U.S. and European speakers; and talking to attendees got me thinking about the similarities and differences in email marketing, specifically performance, in the U.S. and Europe.
Many of the European email marketers I've spoken with over the years feel that the U.S. is ahead of the curve compared to other countries in terms of email marketing. This is good and bad; it means that they are looking to learn from the U.S., but it also means that as email benchmark metrics have declined, the U.S. is leading the way.
The United Kingdom's DMA Email Marketing Council recently released its Email Marketing Benchmark Report for 2010 sponsored by Alchemy Workx. I thought it would be interesting to compare them to U.S. figures, so I've pulled data from the Email Trend and Benchmark Reports published by Epsilon and the Email Experience Council, part of the United States DMA.
I like that the U.K. report differentiates between acquisition and retention email campaigns. For this column, I've used just the metrics for retention, since that's closer to what the U.S. report covers. Here are the U.K. definitions:
While comparing U.K. and U.S. benchmarks didn't yield any big surprises, there are some interesting findings.
Open rates between the U.K. and the U.S. showed some disparity for most of 2010. The variance was the greatest in the third quarter, where the UK was seeing performance 18 percent better than the U.S. (26 vs. 22 percent). For the first half of the year, the variance was less than 8 percent; in the fourth quarter, the open rates were almost equal (22 vs. 22.1 percent).
But the trend lines are interesting. The U.S. open rate fluctuated within a very small range (22 to 22.4 percent); the U.K. showed much larger fluctuations (22 to 26 percent).
The U.S. open rate has been relatively steady, in the 21.9 to 22.4 percent range, ever since the beginning of 2009. This was an improvement over the previous two years, when open rates were primarily in the 18.8 to 20.7 percent range (although the open rate had been 22.1 percent in Q1 2007). Bottom line: it's been more than four years since the U.S. has seen open rates matching the highest 2010 U.K. open rates. And unless something changes, it's unlikely the U.S. will meet these figures anytime soon.
I don't have historical figures for the U.K., but it will be interesting to watch the U.K. figure and see whether it levels out in 2011 (following the U.S. model) or continues to swing.
Where the differences between the U.S. and the U.K. were more evident was in the click-through rate (CTR). The U.K. bested the U.S. in all four quarters of 2010. As the U.S. rate fell from a high of 6 percent in the first quarter to a low of 5.1 percent in the fourth quarter, the U.K. rate rose from 7 percent to a high of 9 percent in the third quarter and back down to 8 percent at the end of the year.
The U.K. consistently bested the U.S. by a low of 16.7 percent (first quarter) to a high of 66.7 percent (third quarter). The last time that U.S. CTRs were 7 percent or above was in Q1 2007. They've been trending downward ever since then, falling below 5.5 percent for the first time in Q2 2010.
So in terms of CTR, the U.K. is besting the U.S. This may have something to do with the permission regulations. Although the European Union passed a rather strict directive on permission, it gave leeway to each country to write and enforce its own regulations based on this. So in some countries, all email communication must be opt-in or have some form of affirmative consent; in others, only some communications require this. My experience has been that, in general, most European email marketers are much more inclined to practice opt-in policies than most companies in the United States. This may contribute to the higher CTRs - and if this continues, the U.K. CTR benchmark should remain higher than the U.S.
I also calculated the click-to-open rate (CTOR) based on the open and click-through rates from each report. CTOR is an interesting metric; some marketers refer to it as the engagement rate, since it tells us what percentage of people that opened the email went on to click on a link.
Here, the U.S. outpaced the U.K. in three out of four quarters in 2010. In the first half of the year, the U.S. was besting the U.K. by more than 20 percent, with the U.K. coming back strong in the fourth quarter (17 percent better than the U.S. CTOR).
The CTOR is directly influenced by the content of the email - and by how well that content matches expectations set in the subject line. I had an interesting discussion with an email marketer at the conference in Sweden. I had shown some samples of U.S. campaigns and the feeling was that email marketers in Sweden were much more subdued in their calls to action. "We would never be that direct," was what the marketer said to me, "but maybe we should try to be a little stronger."
Let me be clear - the higher open and click-through rates cited in the U.K. benchmarks clearly indicate a healthier email marketing climate. But the fact that, even with lower open rates and lower CTRs, the U.S. CTOR bested the U.K. in three out of four quarters shows that we are doing something right here.
Will the U.S. open and click-through rates ever get back up to U.K. levels? Unknown. Will the U.K. follow the U.S. trend and see its benchmarks decrease? Possibly. But I would hope that the permission policies in Europe will help them avoid the declines we're seeing here in the U.S. And I would hope that U.S. email marketers look at the U.K. figures and do some testing to see if following stricter opt-in guidelines can deliver better email marketing performance.
Until next time,
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Jeanne Jennings is a 20 year veteran of the online/email marketing industry, having started her career with CompuServe in the late 1980s. As Vice President of Global Strategic Services for Alchemy Worx, Jennings helps organizations become more effective and more profitable online. Previously Jennings ran her own email marketing consultancy with a focus on strategy; clients included AARP, Hasbro, Scholastic, Verizon and Weight Watchers International. Want to learn more? Check out her blog.
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