Email Service Providers (ESPs) are anticipating an increase in Christmas spending of up to 50%, according to the latest DMA National Email Benchmarking Survey. Over a third of ESPs expect an increase in year-on-year spending of 15 - 25%, almost 20% anticipate an increase of 26 - 50% and 5% of ESPs envisage a rise in Christmas spending of over 50%.
The report reveals that these emails will become increasingly personalised, with all ESPs stating that they are engaged in some kind of message personalisation. An increasing number of ESPs report that they are building entire emails based on an individual's profile. This may be behind the fact that open rates are improving - up to 26% for acquisition and 33% for retention emails. The total click-through rates for retention campaigns have risen to 9% for acquisition and 14% for retention campaigns.
For the first time, the survey also looked at the effect that the 'number of times contacted' can have on the campaign metric rates. Average unique and total click through rates both decreased as the frequency of contact increased, suggesting that the message was having less of an effect on the recipient.
Opt-out rates were also affected. When only contacted once a month, the average opt-out rate was less than 1%, which grew to 3.5% and 2.5% for acquisition and retention (respectively) when contact was weekly. Highlighting the importance of maintaining customer relationships, the results also show that current customers are more likely to respond favourably to communication than non-customers.
The report also reveals an increase in the number of segments in campaigns and in the number of regular communications. Weekly campaigns now account for about a third of all campaigns broadcast in the UK.
Richard Gibson, chair of the DMA Email Marketing Council's Benchmarking Hub, says: "ESPs, and indeed clients, need to find the right balance between maintaining current relationships while not irritating with over-contact. One solution is to let the customer choose. Providing customers with options regarding content and frequency of contact could ensure high click through rates are maintained and less customers are likely to opt out."
The survey also shows that three-quarters of ESPs claim delivery rates of over 91% for their retention work, but less than half claim the same success rates for acquisition mailings. The hard bounce rate has been gradually declining since our survey began and is now 6% for acquisition and 5% for retention campaigns -from highs of almost 10% and 8% respectively. The average failure rate for messages still carries an acquisition/retention skew but the overall fail rate is reasonably low - 9% for acquisition and 7% for retention.
According to the report, opt out rates are improving, especially in acquisition marketing. A year ago, 60% of ESPs had average opt out rates of over 1% for acquisition campaigns. Today, that figure is only 8%. Similarly, the number of ESP's with a retention rate of less than 0.5% was 44% a year ago and today it is 65%.
Reinforcing ESP confidence in the channel, almost a quarter of ESPs believe that future revenues will come from a totally new budget line in 2007. However, in contrast to the recent DMA Client Email Marketing survey, ESPs believe that clients' main selection criteria are price and customer service. While clients also stated customer service as key to their decision, reporting was also deemed a priority, highlighting an increasing interest from marketers in wanting to understand how customers interact with their email messages.