Email Open Rate Declining

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I regularly get asked about email industry metrics and best practices like: “what is the average open and click-through rates?” or “which day is the best to send email?” My typical answer is “it depends”. There are so many variables to consider. Furthermore, two companies in the same industry doing the same thing will likely get different results. Marketers need to test to see what their own metrics are and which best practices work for them. This can start with simple testing like A/B split testing and advance to multi-variable testing. The key is to develop an internal benchmark based on the past and then work towards delivering against that in the future.
Since I work with a lot of very smart people at “ExactTarget”:http://www.exacttarget.com I have access to their knowledge and experience. One of my associates, Morgan Stewart, Director of Strategic Services, works with clients to audit their email marketing programs, benchmark them, apply testing and best practices, and optimize results. He has done a lot of research that is now public including his study on the “Best Day to Send Email”:http://email.exacttarget.com/pdf/Best-Day.pdf _(pdf)_. His latest research is the “2005 Response Rate Study”:http://email.exacttarget.com/lp/2006_BestDay_WP.asp covering over 4,000 email marketers, 230,000 email campaigns and 2.7 billion email messages.


Some of the general findings include:
* Email open rates declined 16.5 percent in 2005
* Click-through rates remained pretty steady at around 6.6%
Morgan’s research found that open rates have dropped steadily over the past two years. In 2005, open rates dropped an average of 1.8 percent per quarter. Open rates dropped to 35.5 percent in the 4th quarter of 2005 from 42.5 percent in the same quarter of 2004.
The main impact on this decline is caused by image blocking. Open rates are measured using a tracking image within HTML emails. Outlook 2003 and many other email/webmail clients allow users to disable the display of images. Many of them have a default setting which blocks images. When this occurs, the ability to track email opens is lost. Blocked images also impact click-through activity.
The good news with this study is that click-through rates have remained steady over the past two years. In the 4th quarter of 2005 click-trough rates increased 10 percent to 6.6 percent from 6 percent a year earlier.
An interesting finding of the study: on average, there are more unique clicks for each tracked open. The overall ratio of opens-to-clicks (open rate divided by click-through rate) has declined from 6.6 in the 1st quarter of 2005 to 5.4 in 4th quarter of 2005. “Organizations are doing a better job of designing their emails to drive click activity,” said Stewart. “The importance of sender and subject lines is increasing because subscribers are using them to determine if they are going to get engaged with an email. Higher engagement means more clicks.”
“Get a copy of the complete study”:http://email.exacttarget.com/lp/2006_BestDay_Whitepaper.asp. It summarizes overall open, click-through and unsubscribe rates and provides additional analyses based on day of week for sending email while examining list size and target audience.

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