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MarketingSherpa’s

Email Marketing
Metrics Guide:
Data for marketers on email use &
the activities and plans of mailers

Produced in partnership with

The Intermarket Group L.P.


www.intermarketgroup.com
MarketingSherpa's Email Marketing Metrics Guide

This document is intended for electronic delivery

Copyright  2002 by MarketingSherpa Inc.


All rights reserved.

The entire contents of this publication are copyrighted by MarketingSherpa Inc. and may not be translated,
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Published August 2002

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 1


MarketingSherpa's Email Marketing Metrics Guide

Table Of Contents

Table of Contents ...................................................................... 2


List of Charts and Tables .......................................................... 3

Executive Summary .................................................................5

Section I. Who Uses The Internet And Email .......................9

Section II. How Do Internet Users Use Email ......................18

Section III. Email Marketing Activity......................................41

Section IV. Opt-In Email List Building....................................55

Section V. Email Marketing To House Lists .........................67

Section VI. Third Party Email Lists And


Newsletter Sponsorships ....................................86

Appendix Data Sources And Contact Information ............102

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 2


MarketingSherpa's Email Marketing Metrics Guide

List of Charts And Tables

Email Marketing Plans For 2002 2.21 Biggest Complaints About Permission Email (2002)
12-Month Trend In Opt-In Email Open Rates 2.22 How Can Permission Email Marketers Improve
12-Month Trend In Opt-In Email Click Rates (2002)
Opt-In Email Activity Among Internet Users 2.23 Growth In Volume Of Spam (2001/2002)
2.24 Share Of Email Filtered As Spam (2001/2002)
1.01 Most Popular Online Activities At Home And At Work 2.25 Growth In Spam/UCE Per Internet User (2000-2006)
(2001) 2.26 Proportion Of Internet Users’ Email That Is
1.02 Internet Users Who Send/Receive Email (2002) Spam/UCE (2001)
1.03 U.S. Internet Population (1997-2006) 2.27 Categories Of Spam Received (2002)
1.04 U.S. Internet Users Online In The Last 30 Days 2.28 Spam Filtering Among U.S. Internet Users (2002)
(2002) 2.29 Internet Users Who Delete Messages Without
1.05 Broadband Households In North America Reading (2002)
(2001/2003) 2.30 Internet User Attitudes Towards Spam/UCE (2002)
1.06 U.S. Mobile Wireless Data Subscribers (2002/2005) 2.31 Internet User Attitudes Towards Marketing Emails
1.07 Global Internet Population By Region (2002) (2002)
1.08 Breakdown Of Internet Population By Region (2002) 2.32 Internet User Attitudes Towards Spam/UCE (2001)
1.09 U.S. Internet Users By Gender (2002) 2.33 Spam Complaint Trends Among Email Marketers
1.10 U.S. Internet Users By Household Income (2002) 2.34 Spam Complaint Trends Among Email Marketers By
1.11 Penetration Of Internet Access By Household Income List Type
(2002) 2.35 Spam Complaint Trends Among Email Marketers By
1.12 U.S. Internet Users By Age Group (2001) Mailing Frequency
1.13 Ethnic Background Of U.S. Internet Users (2001)
1.14 Education Of U.S. Internet Users (2002) 3.01 Objectives Of Email Marketing Programs (2002)
3.02 Primary Goal Of Email Marketing Programs (2002)
2.01 How Frequently Internet Users Check Their Email 3.03 Objectives Of Email Marketing Programs
(2002) 3.04 U.S. Email Marketing Expenditures (2000-2006)
2.02 How Frequently Internet Users Check Their Email 3.05 Email Share Of Total Digital Marketing Budget (2000-
(2001) 2006)
2.03 Sources Of Email Among Recipients At Home And At 3.06 Changes In Email Marketing Expenditures (2002)
Work (2002) 3.07 Changes In Allocation Of Marketing Expenditures
2.04 Daily Email Volume Among Internet Users At Home (2002)
And At Work (2001) 3.08 Average Email Marketing Cost Per Conversion
2.05 Daily Volume Of Email Advertisements (2001) (2000/2001)
2.06 Growth In Commercial Email Volume Per Internet 3.09 Estimated Cost Of List Appending (2002)
User (2000-2006) 3.10 Amount Budgeted Annually For Email Database
2.07 Consumer Exposure To Online Marketing Messages Hygiene (2001)
(2001-2006) 3.11 Accuracy Of Email Broker List Counts (2002)
2.08 Delivery Frequency Preferences Of Opt-In Email 3.12 Biggest Challenges For Email Marketers (2002)
Users (2000/2002) 3.13 Barriers To Expanding Email Marketing Programs
2.09 Number Of Email Addresses Per Online Shopper (2002)
(2001) 3.14 Performance Metrics Tracked By Email Marketers
2.10 Applications For Which Online Shoppers Create 3.15 Performance Metrics Tracked By Email Marketers
Email Addresses (2001) (2002)
2.11 Email Format Preferences Among Internet Users 3.16 Most Commonly Used Marketing Activities (2002)
(2001/2002) 3.17 Effectiveness Of Selected Marketing Activities (2002)
2.12 Internet User Attitudes Towards Rich Email Formats
(2002) 4.01 How Do Marketers Gather Opt-In Names
2.13 Email Applications Used By Internet Users (2001) 4.02 What Types Of House Lists Are Marketers
2.14 Types Of Permission Email Received By Internet Developing
Users (2001) 4.03 Willingness Of Recipients To Opt-In To Email Lists
2.15 Popularity Of Different Types Of Permission Email 4.04 Concern About Privacy Of Personal Information
(2002) Provided Over The Internet (2001)4.05 Internet User
2.16 How Do Internet Users Find Out About New Attitudes About Registration And Privacy Statements
Products/Services (2002)
2.17 How Recipients Respond To Email Promotions
(2000/2002)
2.18 Reasons Internet Users Forward Email To Others
(2001)
2.19 Average Opt-In Email Pass-Along Rate (2002)
2.20 Viral Pass-Along Rate From Select MarketingSherpa
Case Studies

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 3


MarketingSherpa's Email Marketing Metrics Guide

4.06 What Information Will Internet Users Share (2002) 5.23 Average Bounce Rates (2002)
4.07 Benefits For Which Internet Users Would Exchange 5.24 Average Bounce Rates By Industry (2002)
Personal Information (1999/2001) 5.25 Email List Hygiene Trends Among Consumer
4.08 Popularity Of Different Opt-In Practices (2002) Marketers
4.09 Popularity Of Personalization Models Among Email 5.26 Email List Hygiene Trends Among B-to-B Marketers
Recipients (2002) 5.27 Email List Hygiene Trends Among Mixed Audience
4.10 Opt-In Rates From Select MarketingSherpa Case Marketers
Studies
4.11 Internet User Opt-Out Activity (2002) 6.01 How Many Marketers Use Third Party Email Lists
4.12 Opt-Out Rate Trend For Newsletters vs. Sales Alerts 6.02 Trends In The Use Of Third Party Email Lists
4.13 Opt-Out Rate Trend By List Type 6.03 Open Rate Trend For Third Party Lists
4.14 Opt-Out Rate Trend By Frequency Of Mailing 6.04 Average Open Rate For Third Party Lists
4.15 Average Opt-Out Rates (2002) 6.05 Open Rates For Third-Party Lists From Select
4.16 Effect Of Personalization On Opt-Out Rates (2002) MarketingSherpa Case Studies
6.06 Click-Through Rate Trend For Third Party Lists
5.01 How Many Marketers Have House Email Lists 6.07 Average Click-Through Rate Comparison For Opt-In
5.02 Marketers Publishing Email Newsletters And Sales Email (2002)
Alerts 6.08 Click-Through And Conversion Rates For Customer
5.03 Marketers’ Plans For Their Use Of Email Newsletters Acquisition vs. Retention (2001)
5.04 Marketers’ Plans For Their Use Of Email Sales Alerts 6.09 Average Click-Through Rate For Third Party Lists
5.05 Frequency Of Mailings To House Lists 6.10 Average Click-Through Rate For Opt-In Email (2001-
5.06 Frequency Of Mailings To House Lists Among 2002)
Consumer Marketers 6.11 Click-Through Rates For Third-Party Lists From
5.07 Frequency Of Mailings To House Lists Among B-to-B Select MarketingSherpa Case Studies
Marketers 6.12 Average Click-Through Rate For Opt-In Email
5.08 Frequency Of Mailings To House Lists Among Mixed Campaigns (2002)
Audience Marketers 6.13 Average Click-Through Rate By Industry (2002)
5.09 Open Rate Trend For House Lists 6.14 Average Click-Through Rate By Day Of Week (2002)
5.10 Open Rate Trend For Newsletters vs. Sales Alerts 6.15 Click-Through Rate For Personalized Messages
5.11 Open Rate Trend By List Type (2002)
5.12 Open Rate Trend By Frequency Of Mailing 6.16 Most Effective Methods Of Profiling Email Recipients
5.13 Average Open Rate For House Lists (2002)
5.14 Average Open Rate For House Lists By List Type 6.17 Average Conversion Rate For Email Campaigns
5.15 Open Rates For House Lists From Select (2002)
MarketingSherpa Case Studies 6.18 How Many Marketers Use Email Newsletter
5.16 Click-Through Rate Trend For House Lists Sponsorships
5.17 Click-Through Rate Trend For Newsletters vs. Sales 6.19 Trends In The Use Of Email Newsletter Sponsorships
Alerts 6.20 Click-Through Rate Trend For Email Newsletter
5.18 Click-Through Rate Trend By List Type Sponsorships
5.19 Click-Through Rate Trend By Frequency Of Mailing 6.21 Average Click-Through Rate For Email Newsletter
5.20 Average Click-Through Rate For House Lists Sponsorships
5.21 Average Click-Through Rate For House Lists By List 6.22 Email Newsletter Click-Through Rates From Select
Type MarketingSherpa Case Studies
5.22 Click-Through Rates For House Lists From Select
MarketingSherpa Case Studies

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 4


MarketingSherpa's Email Marketing Metrics Guide

Executive
Summary

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 5


MarketingSherpa's Email Marketing Metrics Guide

Email marketing is among the topics that marketers are most interested in today.
Approximately $2 billion will be spent in the U.S. this year -- or 25% of all digital marketing
expenditures -- on acquisition- and retention-related email campaigns. Within three
years, that figure is expected to grow three-fold, to $6 billion and email will account for
one of every three dollars budgeted to digital marketing

Email Is The Number One Online Activity


Email is the most widely used Internet application and the number one online activity.
There are now 553 million Internet users worldwide and almost 90% of them send and
receive email; in the U.S., that number increases to 95%.
Seventy-six percent of Internet users in the U.S. typically devote their first few minutes
online to reading and sending email. Almost two-thirds of the Internet users who go
online from home check their mail at least twice daily. More than one-half of business
users check their email six times or more each work day.
Approximately 70% of Internet users already receive permission email from online
retailers. And 82% of online buyers have completed at least one purchase in response to
an email promotion from a merchant.

Marketers’ Plans For Email


In mid-July, we invited subscribers from several MarketingSherpa newsletters to share
some of their email marketing experiences with us. More than 1,680 individuals
responded by completing the online
survey for this report. Email Marketing Plans For 2002
The survey results indicate that a few As a percent of survey respondents
trouble spots are developing but overall,
email marketing appears to be working
exceptionally well for the majority of Plan To Decrease Use
marketers and most plan to expand their Will Use At About The Same Level
use of it in the coming months.
Plan To Increase Use
Email newsletters, alerts and
promotions that are sent to marketers'
5.8%
own house lists have demonstrated the Sponsor Email
best performance over the past 12 25.6%
Newsletters
months, according to survey respondents. 51.2%
Almost two-thirds (62.3%) intend to
expand the use of their own email Broadcast 8.1%
newsletters through the remainder of Promotions To
26.2%
2002 while another 32.1% plan to Third Party
maintain their newsletter-related spending Lists 52.5%
at current levels.
Just over 50% of the respondents plan 1.1%
Publish Own
to increase their spending on broadcasts Email 32.1%
to third-party email lists (52.5%) and for Newsletter
email newsletter sponsorships (51.2%) 62.3%
between now and the end of the year.
Only 1% of the marketers we surveyed 0% 20% 40% 60% 80%
plan to decrease the use of their own Source: MarketingSherpa + Intermarket Group, 7/2002
email newsletters. In contrast, 8% plan to
cut back on their use of third party email
lists and 6% intend to do the same with email newsletter sponsorships.

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MarketingSherpa's Email Marketing Metrics Guide

Email Performance Metrics


12-Month Trend In Opt-In Email Open Rates
As the volume of email that competes As a percent of survey respondents
for the attention of Internet users
increases, successful marketers are Mailings To Third Party Lists
trying harder to track what works and
Mailings To House List(s)
what doesn't. They're also becoming
more savvy in applying that knowledge
36.3%
to optimize their campaigns, testing Decreased
variables such as subject lines, delivery Significantly 9.3%
days, delivery times, and link
placement. 55.0%
Little To No
Among mailers using house lists, Change
more than two-thirds (68.4%) report 68.4%
that their open rates have changed little
or not at all during the past year. Almost Increased 8.8%
one-in-four (22.4%) marketers have Significantly 22.4%
actually increased their open rates
since mid-2001. Less than one-in-ten
0% 20% 40% 60% 80%
(9.3%) respondents has experienced a
decline in open rates for their house Source: MarketingSherpa + Intermarket Group, 7/2002
lists.
Click-through rates for house lists
have for the most part matched the trends in
open rates. A higher percentage of 12-Month Trend In Opt-In Email Click Rates
As a percent of survey respondents
marketers, however, did report increases
in their click rates than did so for open Email Newsletter Sponsorships
rates (26.3% vs. 22.4%). Mailings To Third Party Lists
More than one-third of the survey Mailings To House List(s)
respondents report that a significant
decline occurred during the past 12 21.2%
months in both open rates and click- Decreased
37.5%
through rates for their broadcasts to Significantly
third-party lists. Marketers are almost 9.7%
four times more likely to experience a
decline in response from third party lists 62.0%
than for their house list (36.3% vs. 9.3% Little To No
52.9%
open rate and 9.7% vs. 37.5% click Change
rate). 63.9%
Some deterioration in click-through
rates for email newsletter sponsorships 16.8%
were also reported by respondents. Increased
9.6%
Significantly
This deterioration in performance has
26.3%
generally had a greater impact on
consumer marketers than B-to-B
0% 20% 40% 60% 80%
marketers.
Source: MarketingSherpa + Intermarket Group, 7/2002
Challenges Facing Email Marketers
Looking ahead to the next 6-12
months, factors that are likely to have the biggest impact on marketers’ email metrics are
increased filtering and continued growth in the volume of email -- including spam -- that fills the
in-boxes of Internet users.

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MarketingSherpa's Email Marketing Metrics Guide

Email Filtering -- ISPs and corporate network administrators are beginning to aggressively
implement server-side filtering technology to stop spam before it ever makes it to the user’s in-
box. The end-result of this can be problematic for legitimate permission marketers and
publishers whose emails can easily be tagged as spam, intercepted and never reach the
subscriber’s in-box.
A growing number of Internet users have also begun to use the filtering capability that’s
included in most email clients or that can be purchased as an add-on service or software
program. Approximately 21% of Internet users are already using this type of filtering.
In order to ensure that their email is not being filtered, Marketers are advised to keep close
tabs on data for email which is actually delivered rather than simply tracking bounce rates.
Filtered mail is intercepted, not bounced back to the sender, so tracking bounce rates will
overlook these “soft bounces.” Marketers that utilize an outside vendor for their email campaign
management should request reports that
break out undelivered messages according Opt-In Email Activity Among Internet Users
to the reasons why they were not delivered. As a percent of survey respondents
Increasing Email Volume -- The
average Internet user receives 15 email Opt-Out/Unsubscribe Rates
messages per day at home and almost 30 Willingness Of People To Join Email List(s)
at work. Spam now accounts for
approximately 34% of all email and the 14.0%
Decreased
number continues to grow. Significantly 6.6%
The reaction of many Internet users is
an increasingly aggressive use of the
delete key. More than 50% of users Little To No 78.7%
already regularly delete messages without Change
62.3%
reading them. As the volume of spam
increases, this practice will undoubtedly
7.3%
become more common. Increased
So far, most of the marketers in our Significantly 31.1%
survey have seen little to no impact on
metrics for their house lists from “email 0% 20% 40% 60% 80% 100%
overload” among Internet users. Only
Source: MarketingSherpa + Intermarket Group, 7/2002
7.3% have seen a significant increase in
opt-out rates and more than four times as
many respondents (31.1%) reported that people were actually more willing to opt-in to their lists
today than they were 12 months ago.

About The Survey


In mid-July, we invited subscribers from several MarketingSherpa newsletters to share
some of their email marketing experiences with us. More than 1,680 individuals
responded by completing the 25 question online survey for this report. The respondents
were comprised of consumer marketers (21%), B-to-B marketers (55%) and marketers
targeting a mixed audience of both businesses and consumers (24%).

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 8


MarketingSherpa's Email Marketing Metrics Guide

Section I.
Who Uses the Internet
and Email

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MarketingSherpa's Email Marketing Metrics Guide

Email is the one online activity that has been embraced almost universally
among Internet users, especially in the U.S. Yankee Group reports that more
than nine-in-ten (93%) users at home check their email at least once per week
and that 85% of users at work do the same. The next most popular activities are
online game playing and online shopping, with barely more than one-half of users
at home engaged in one or both. Email is also the first priority for many as soon
as they log-on to the Internet. More than three-in-four (76%) Internet users
typically devote their first few minutes online to reading and sending email,
according to Yankee.
Among broadband Internet users, the Pew Research Center reports that 28%
spend more time on email than any other single online activity. Only “looking up
information” was mentioned by more individuals (32%) as the activity that they
spend the most time on, while the next closest activity, “downloading files,” was
mentioned by 8% of survey respondents.

1.01 Most Popular Online Activities At Home And At Work (2001)


Percent of Internet users who engage in each activity at least weekly

Internet Users At Home Internet Users At Work

85%
Send/Receive Email
93%

Work-Related 39%
Activities 24%

32%
Online Shopping
57%

29%
Online Travel
34%

23%
Instant Messaging
53%

23%
Online Banking
37%

18%
Play Online Games
55%

Bid In Online 15%


Auctions 30%

10%
Pay Bills Online
24%

10%
Online Chat
37%

0% 20% 40% 60% 80% 100%

Source: Yankee Group, 10/2001

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MarketingSherpa's Email Marketing Metrics Guide

1.02 Internet Users Who Send/Receive Email (2002)


As a percent of Internet users in each country

USA 95%

Australia 90%

U.K. 90%

Netherlands 90%

Denmark 89%

Switzerland 89%

Sweden 88%

Hong Kong 84%

Germany 83%

Spain 82%

France 80%

Italy 79%

Brazil 75%

0% 20% 40% 60% 80% 100%

Source: Nielsen-NetRatings, Q1-2002

Although the rate of email use drops among individuals outside the U.S., 80%
or more of the Internet users in most industrial countries regularly send and
receive email, according to Nielsen-NetRatings. In countries where Internet
access has been common for some time -- such as Australia and the U.K. -- 90%
or more of the individuals who are online are also email users.
The exact number of U.S. Internet users who also use email varies depending
upon the analyst or pollster. A general consensus is approximately 95% of
Internet users, with some variation based on demographics and other user
characteristics. For example, email use declines among Internet users below the
age of 18 and above the age of 55, according to most surveys. Among
broadband users, the number of email users increases to 99%, according to the
Pew Research Center, compared to its own estimate that 95% of Internet users
overall send and receive email.

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MarketingSherpa's Email Marketing Metrics Guide

More than one-half of the U.S. population already has Internet access today,
according to Jupiter Media Metrix and the number is expected to exceed two-
thirds of the population in less than three years. Pew estimates that 49% of
Internet users go online exclusively from home while 8% have access only at
work and 39% have access from both locations. The remaining 4% access the
Internet from locations such as school, libraries and cyber cafes.
Among U.S. Internet users, more than two-thirds (68%) are active users,
according to Nielsen-NetRatings. The number of active users jumps significantly
among individuals who go online at work, where 90% of those workers with
Internet access have actually accessed the Internet at least once during the last
30 days.

1.03 U.S. Internet Population (1997-2006)


Millions of users and as a percent of general population

Internet Users Percent Of U.S. Population


500 100%

400 68% 71% 80%


64%
60%
55%
300 50% 60%
44%
38% 201 211
200 31% 173 173 40%
158
141
22% 124
104
83
100 60 20%

0 0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: Jupiter Media Metrix, 8/2001

1.04 U.S. Internet Users Online In The Last 30 Days (2002)


Millions of users age 2+

Used Internet In Last 30 Days Have Internet Access

Home/Work 177.2
Combined 120.3

48.8
Users At Work
44.0

166.4
Users At Home
105.0

0 50 100 150 200 250


Source: Nielsen-NetRatings, 6/2002

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MarketingSherpa's Email Marketing Metrics Guide

At home, The Pew Research Center reports that individuals with broadband
access are generally the most active Internet users. Eighty-two percent of
broadband users are online daily, according to the organization. In contrast, only
58% of Internet users with dial-up access go online daily and less than one-in-five
(19%) go online more than once per day.
Almost one-in-five (17%) households in North America with Internet access
had a broadband connection at the end of 2001, according to Forrester
Research. Estimates from Nielsen-NetRatings and from Pew for the U.S. only,
were closer to 20% of households -- or approximately 22-24 million individuals --
in early-2002, which represented a 67% increase from January 2001 and a four-
fold increase since 2000. At work, Nielsen-NetRatings estimated that 25.5 million
office workers -- or about 63% of the workplace Internet population -- had
broadband Internet access during the same period.

1.05 Broadband Households In North America (2001/2003)


Millions of households in the U.S. and Canada

2001 2003

32.1
Broadband
Households
12.1

87.1
Households Online
72.5

0 20 40 60 80 100
Source: Forrester Research, 2002

1.06 U.S. Mobile Wireless Data Subscribers (2002/2005)


Millions of users

2002 2005

33.0
Business Users
12.0

19.0
Consumers
4.0

0 10 20 30 40 50
Source: InStat/MDR, 6/2002

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MarketingSherpa's Email Marketing Metrics Guide

One of the fastest-growing components of today’s Internet population is


individuals who go online using mobile wireless devices. The majority of these
individuals (75%) at present are business users, however, InStat/MDR predicts
the number of consumer mobile wireless data subscribers in the U.S. will expand
almost five-fold by 2005 (see 1.06). The primary drivers will be WAP- and SMS-
enabled mobile handsets, although IE device shipments are expected to grow at
a 15% CAGR, from 430 million in 2002 to 760 million worldwide in 2006. Most of
the interest in mobile wireless data services is expected to remain in Europe and
Asia, while interest levels in the U.S. remain comparatively low.

1.07 Global Internet Population By Region (2002)


Millions of users age 2+

U.S.A. 166.4

Europe/Middle East 133.2

Asia/Pacific 77.5

Latin America 14

Rest Of World 161.9

0 50 100 150 200 250


Source: Nielsen-NetRatings, Q2-2002

1.08 Breakdown Of Internet Population By Region (2002)


As a percent of all Internet users age 2+

Europe/Middle U.S.A.
East 30%
24%

Asia/Pacific
14%
Rest Of World
Latin America 29%
3%

Source: Nielsen-NetRatings, Q2-2002

The global Internet population was estimated to be approximately 553 million


at the end of Q2-2002, according to Nielsen-NetRatings. The largest share of
users remained in the U.S., however, approximately two-thirds of all Internet
users were located outside North America. The next-largest regional population

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MarketingSherpa's Email Marketing Metrics Guide

of Internet users was located in Europe, which combined with the Middle East
accounted for 24% of the individuals worldwide who were online.
A July 2002 analysis of website traffic patterns by WebSideStory found that
approximately 43% of active Internet users worldwide during that month were
located in the U.S. The next largest population of Internet users in July were
located in China (6.6% of all Internet users), followed by Japan (5.2%), the U.K.
and Canada (3.9% each), and Germany (3.6%).

1.09 U.S. Internet Users By Gender (2002)


As a percent of Internet users

Female Male

49%
Users At Home
51%

60%
Users At Work
40%

0% 20% 40% 60% 80% 100%


Source: Nielsen-NetRatings, 1/2002

Although women have comprised a slim majority of Internet users both at home
and overall since early-2001, they account for only 40% of the online population at
work, according to Nielsen-NetRatings. Among those women who are online at
work, a disproportionate share (27%) are clerical or administrative workers while
only 14% are in executive or managerial positions and 20% are in professional
positions. In contrast, the company estimates that one-half of male Internet users
at work occupy professional or executive/managerial positions and only 4% are
clerical or administrative workers.

1.10 U.S. Internet Users By Household Income (2002)


As a percent of U.S. population and each group of Internet users

Have Internet Access Used Internet In Last 30 Days General Population


80%
50.5%

60%
39.8%

33.2%
32.5%

28.6%
25.3%

40%
23.9%

22.9%
20.7%

9.0%

20%
7.7%

5.9%

0%
< $50,000 $50 - 75,000 $75 - 150,000 > $150,000
Source: MRI Cyber Stats, Spring 2002

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MarketingSherpa's Email Marketing Metrics Guide

1.11 Penetration Of Internet Access By Household Income (2002)


As a percent of all U.S. households in each income group

100%
83%
79%
80%
70%

60%
47%

40% 35%

20%

0%
< $15,000 $15 - 30,000 $30 - 50,000 $50 - 70,000 > $70,000
Source: Jupiter Media Metrix, 2002

1.12 U.S. Internet Users By Age Group (2001)


As a percent of Internet users

Number of Internet Users Penetration Rate Within Age Group


80 100%
81% 80%
75%
80%
60

60%
46%
40
62.4 mn 40%

20
30.9 mn 20%
21.5 mn 26.2 mn

0 0%
18 to 24 25 to 34 35 to 54 55+
Source: GartnerG2, 6/2001

IDC predicts that the overall Internet penetration rate will continue to increase
during the next few years. As Internet penetration moves towards three-quarters
of the entire U.S. population in 2005, the largest increase will occur among users
between 35 and 54 years old, which are predicted to expand by 24.2 million,
followed by individuals 55+ years old, who will account for 22.1 million new users.
IDC also predicts that:

• The percentage of children under 12 years old who are online will increase
from 42% in 2000 to 78% by the end of 2005
• The penetration rate among teens ages 12 to 17 will increase from 81% to
96%, the highest among all age groups
• The age group between 18 and 34 will become the second most saturated
with 91% of them online in 2005

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 16


MarketingSherpa's Email Marketing Metrics Guide

• Among adults age 55 and older, the percentage who are online will more than
double between 2000 and 2005 from 26% to 56%

1.13 Ethnic Background Of U.S. Internet Users (2001)


As a percent of U.S. population and of Internet users

Internet Users General Population


100%

70.5%

69.1%
80%

60%

40%

13.9%
12.3%

12.5%
9.6%

6.0%
20%

3.6%

2.5%
N/A
0%
Caucasian- African- Hispanic- Asian- Other
American American American American

Source: Intermarket Group (7/2001), U.S. Census Bureau (2000)

1.14 Education Of U.S. Internet Users (2002)


As a percent of Internet users

Internet Users At Home Internet Users At Work


80%

60%
50.3%

37.9%
40% 34.1%
31.0%
28.0%
18.7%
20%

0%
High School Graduate Attended College College Graduate Or
Or Less More
Source: MRI Cyber Stats, Spring 2002

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 17


MarketingSherpa's Email Marketing Metrics Guide

Section II.
How Do Internet Users
Use Email

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 18


MarketingSherpa's Email Marketing Metrics Guide

Almost two-thirds (64%) of Internet users surveyed by Quris check their email
at least twice daily while only 14% check less than daily. According to Quris, 71%
check their email primarily from home and another 18% primarily from work. Ten
percent of respondents check from home and work equally and the balance (2%)
check their email from libraries, cyber cafes, friend’s houses or elsewhere.
Among business users, more than one-half (53%) check their email six or
more times daily and 34% check constantly, according to Gartner Group. The
company also estimates that these individuals spend approximately 49 minutes
per day on average to manage their email.

2.01 How Frequently Internet Users Check Their Email (2002)


As a percent of survey respondents

"Many Times" Per


32%
Day

2 - 3 Times Per Day 32%

Once Per Day 22%

2 - 6 Times Per
11%
Week

Once Per Week 3%

0% 10% 20% 30% 40% 50%

Source: Quris, 5/2002

2.02 How Frequently Internet Users Check Their Email (2001)


As a percent of survey respondents

30%

25%

20% 17%

15% 13% 12% 12% 12% 13%


11%
10% 8%

5% 2%

0%
<1 1 to 2 3 to 4 5 to 6 7 to 8 9 to 10 11 to 15 16 to 20 > 20
Hour Hours Hours Hours Hours Hours Hours Hours Hours

Source: Gallup Organization, 6/2001

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 19


MarketingSherpa's Email Marketing Metrics Guide

2.03 Sources Of Email Among Recipients At Home And At Work


(2002)
As a percent of all email received in each location

Individuals Using Email At Home/Work Equally


Individuals Using Email Primarily At Home

22%
Family And Friends
26%

Job-Related
25%
Messages 6%

Business 9%
Permission Email 7%

Personal 16%
Permission Email 24%

28%
Spam
37%

0% 10% 20% 30% 40% 50%

Source: Quris, 5/2002

Spam now accounts for the largest single source of email among most
Internet users. Based on user survey data from several sources, combined with
email filtering data from Brightmail, it appears that approximately one-third of all
email today is spam. The next largest sources of email among individuals that
use the Internet primarily at home are messages from family and friends (26% of
all emails) and personal permission email, according to survey data from Quris.
Staying in touch with friends and family is one of the principal applications for
email among Internet users. Eighty-four percent of Internet users surveyed by
The Pew Research Center use email to communicate with family members and
80% use it to contact friends; about one-half of the survey respondents email one
or more family members at least once a week and 12% do so daily.
One interesting finding by the Pew survey which may be somewhat indicative
of the future for email is that among broadband users who spend the most time
online, email is actually used less than it is among broadband users overall. On
the flip-side, these “heavy users” were more than three times more likely to use
Instant Messaging during a typical day -- 48% use IM during the average day
compared to only 14% of other broadband users. Nielsen-NetRatings reports
that Internet users ages 17 and under are also frequent IM users and, to some
extent, they appear to be employing it as an alternative to email.

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 20


MarketingSherpa's Email Marketing Metrics Guide

2.04 Daily Email Volume Among Internet Users At Home And At


Work (2001)
As a percent of survey respondents

Users At Home Users At Work


60%

50%

42%
40%

28%
27%
30%

19%

13%
20%

12%
10%

10%
9%

8%
6%

6%
10%

2%

2%

2%
1%
0%
5 Or 6 To 10 11 To 15 16 To 20 21 To 30 31 To 40 41 To 50 More
Less Than 50

Source: Gallup Organization, 6/2001

Last year, the average Internet user received 11 emails at home per day and
24 emails at work, according to a survey by the Gallup Organization. The median
number of daily emails received at home and at work was 8 and 12 respectively.
Seventy percent of respondents in the Quris survey said that the number of
emails they receive has increased during the last 12 months. Among those
respondents, 74% reported an increase in the amount of spam they received,
44% indicated that email from family and friends contributed to the increase, 28%
were receiving more permission-based email and 20% were receiving more work-
related email.

2.05 Daily Volume Of Email Advertisements (2001)


As a percent of survey respondents

1 - 3 Messages
10+ Messages 18%
47%

4 - 6 Messages
6%

7 - 10
Messages
29%

Source: Opt-In New s, 2001

Opt-In News estimated last year that more than three-in-four (76%) Internet
users receive 7 or more commercial emails per day. Recent estimates by Jupiter
Media Metrix indicate that the average Internet user receives 6 commercial
emails per day. Two-thirds of all email delivered to the in-boxes of individuals
surveyed by Quris was commercial -- both permission-based and spam --

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 21


MarketingSherpa's Email Marketing Metrics Guide

according to the company. Quris also estimates that 96% of all Internet users
receive at least some permission-based email and that the average user receives
such messages from 12 different organizations.
By 2006, Jupiter predicts that the total volume of commercial email will expand
six-fold, from approximately 90 billion messages in 2000 to more than 500 billion.
The number of commercial emails received by each Internet user will double,
according to the company. Spam will account for more than one-in-three
messages in 2006 while permission-based retention messages will comprise
almost 30%, acquisition-oriented messages almost 10% and sponsored opt-in
emails another one-in-four of all messages.

2.06 Growth In Commercial Email Volume Per Internet User (2000-


2006)
Total number of emails received per user per year

Spam Customer Retention Sponsorship Customer Acquisition


1600

1200

800

400

0
2000 2001 2002 2003 2004 2005 2006

Source: Jupiter Media Metrix, 7/2001

2.07 Consumer Exposure To Online Marketing Messages (2001-


2006)
Number of impressions per user per day

1500

1200
930
863
900 797
733
669
608
600

300

0
2001 2002 2003 2004 2005 2006

Source: Jupiter Media Metrix, 7/2001

Although the volume of commercial email delivered to in-boxes is growing, it


remains only a small part of the clutter that marketers must cut through in order

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 22


MarketingSherpa's Email Marketing Metrics Guide

to communicate with existing and prospective customers. The typical Internet user
is already exposed to an average of 669 online marketing messages daily,
according to Jupiter. By 2006, the company predicts that number will increase by
another 53%, to 930 individual impressions per day.
As the volume of email received by Internet users continues to grow, delivery
preferences for opt-in messages have begun to shift, although not as much as
one might have expected. The number of users interested in daily delivery has
declined by 25% and only 8% of users prefer delivery 2-3 times per week, which
is down from 18% in 2000. The biggest increases have occurred among users
interested in delivery either weekly or monthly, although the changes are not
substantial. Weekly and monthly delivery are also the most frequently selected
options among Internet users.

2.08 Delivery Frequency Preferences Of Opt-In Email Users


(2000/2002)
As a percent of survey respondents

NFO Interactive (2000) Forrester Research (June 2002)

9%
Daily
12%

8%
2-3 Per Week
18%

35%
1 Per Week
31%

11%
2-3 Per Month
10%

21%
1 Per Month
18%

7%
< 1 Per Month
6%

8%
Never
N/A

0% 10% 20% 30% 40% 50%

Source: As Noted

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 23


MarketingSherpa's Email Marketing Metrics Guide

2.09 Number Of Email Addresses Per Online Shopper (2001)


As a percent of online shoppers

50%

40%
33%
30%
22% 22%
20%
10%
8%
10% 5%

0%
One Two Three Four Five Six Or
More
Source: Valentine Radford, 2001

The majority of Internet users have two or more email addresses, according to
surveys conducted by Valentine Radford. Each of these “extra” email addresses
is generally created for a specific application, such as enabling users to separate
work-related information from personal messages. Individuals are also
increasingly creating “disposable” addresses for use in situations where they’re
concerned about their privacy or about spam.
Each year, almost one-third (32%) of email address are changed by Internet
users, according to a survey by NFO WorldGroup.
Among European Internet users, Forrester Research estimated that 46% had
only one email address in 2001 while 28% had two, 11% had three, 5% had four
and 11% had five or more.

2.10 Applications For Which Online Shoppers Create Email


Addresses (2001)
As a percent of online shoppers

100%

80%
65%
61% 60% 57%
60%

40%
22%
20%

0%
Correspondence

Correspondence

Work-Related

Correspondence

Product/Shopping
With Friends

With Family

Information
Collecting
Private

Source: Valentine Radford, 2001

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 24


MarketingSherpa's Email Marketing Metrics Guide

2.11 Email Format Preferences Among Internet Users (2001/2002)


As a percent of survey respondents

DoubleClick Survey (2001) Opt-In News Survey (Q1-2002)

35%
Prefer HTML
37%

62%
Prefer Text
22%

3%
Prefer Rich Media
N/A

N/A
No Preference
36%

N/A
Don't Know
5%

0% 20% 40% 60% 80%


Source: As Noted, 2001/2002

2.12 Internet User Attitudes Towards Rich Email Formats (2002)


As a percent of survey respondents

HTML Rich Media Multimedia Attachments


80%

60% 52%

39%
40% 34%
31%
26% 26% 28%
22%
20% 16%

0%
Feel Positively About It Neutral Feel Negatively About It

Source: Quris, 5/2002

Surveys conducted by both DoubleClick and Opt-In News found that more
than one-third of Internet users prefer HTML-format for opt-in email. The two
companies, however, diverge significantly in their estimates of user preferences
for text-based email, although much of the difference is likely attributable to a “No
Preference” option included in the DoubleClick survey -- which was selected by
36% of respondents -- but not in the Opt-In News survey.
Travelocity reports that only 35% of its opt-in subscribers request text-format
messages while the balance specify HTML. The online travel company is among
the largest email marketers, with 2-3 million broadcast email messages per day
and approximately 34 million opt-in subscribers.

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 25


MarketingSherpa's Email Marketing Metrics Guide

A May 2002 study by Quris reports that regardless of delivery preferences,


almost 80% of Internet users are nevertheless either neutral or have positive
feelings toward HTML messages.

2.13 Email Applications Used By Internet Users (2001)


As a percent of Internet users

Outlook Express 41%

AOL 28%

Hotmail 27%

Yahoo! Mail 21%

Outlook 20%

Netscape 7%

Eudora 3%

Juno 2%

Lotus Notes 2%

Excite 1%

AT&T 1%

iWon 1%

Earthlink 1%

Mail.com 1%

Other 8%

0% 10% 20% 30% 40% 50%

Source: DoubleClick, 2001


Given the ubiquity of Microsoft Internet Explorer and Microsoft Office, it should
come as no surprise that the majority of Internet users use either the Outlook or
Outlook Express software that’s bundled with each product to manage their
email. Outlook Express is the most popular email client by a significant margin,
according to DoubleClick, with 41% of Internet users using the software at least
occasionally. AOL, Outlook and Netscape are the next most popular email
clients. Text-only clients such as Eudora and Lotus Notes trail far behind with
only 2-3% of Internet users using each.
Hotmail and Yahoo! are the clear leaders among web-based email providers,
with more than one-in-five Internet users receiving messages through one or both
services. Other service providers such as iWon and Mail.com trail far behind at
2% or less each.

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 26


MarketingSherpa's Email Marketing Metrics Guide

Announcements from online retailers and travel companies are received by


more Internet users than any other type of opt-in email, according to an analysis
by DoubleClick. Emails delivering humor-, entertainment-, and household/hobby-
related content are also popular among many users. DoubleClick reports that a
significant demand exists for local information as well, such as news and specials
from local retailers or restaurants, although more individuals have expressed an
interest than actually receive them at present.
NFO WorldGroup has reported similar findings. Almost three-in-four (71%)
Internet users already receive permission email from online retailers announcing
special offers and 27% receive similar emails from local retailers, according to the
company. NFO also found that approximately one-half receive messages with
household/hobby content (57%), humor (55%), travel content or announcements
(55%) or entertainment-related content (49%).

2.14 Types Of Permission Email Received By Internet Users (2001)


As a percent of Internet users

Currently Receive Interested In Receiving

Specials/Offers From
Online Retailers

Specials/Offers From
Local Firms

Household Tips,
Recipies, Crafts

Humor

Travel

Entertainment

Weather

Local News

Tech/Business
News

Finance/Stock
Information

Sports

Other

0% 20% 40% 60% 80% 100%

Source: DoubleClick, 2001

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 27


MarketingSherpa's Email Marketing Metrics Guide

2.15 Popularity Of Different Types Of Permission Email (2002)


Ranked from 1 (very negative) to 5 (very positive) with 3 being neutral

Transaction Confirmations 4.2

Account Status Emails 3.8

Recommendations From Friends 3.5

Company Newsletters 3.3

Customizable Information Updates 3.3

Time-Based Reminders 3.2

Rewards Programs 3.1

Email Discussion Groups 3.1

Product Updates Of Interest 3.1

Media Newsletters 3.0

Entertainment 3.0

Email Education Series 3.0

Compiled Targeted Ad Offers 2.7

Personal Email From Offline Firms 2.7

Unscheduled Permission Emails 2.4

Contests For Address 2.2

0 1 2 3 4 5

Source: Quris, 5/2002


The majority of Internet users surveyed recently by Quris have a neutral to
positive opinion about most types of opt-in or permission email. The company
asked respondents to rank 16 different types of permission email on a scale of 1
to 5 -- with 3 or higher generally positive -- and only four were viewed negatively.
Business-related emails, such as transaction confirmations (e.g., receipts or
shipping notices) and account status messages (e.g., statements or balance
notices) were the only types where a majority of respondents selected either 4
(positive) or 5 (very positive).
Among the most unpopular opt-in messages were general company
announcements or promotional offers that were sent to respondents
unexpectedly and messages which offered to enter the recipient in a contest in
return for his or her email address for promotional offers from third-party “partner”
companies. Respondents in the Quris survey also contradicted the findings of
DoubleClick (see 2.14) and expressed a slightly unfavorable opinion (2.7 rating)
about personalized emails from offline firms, such as banks, retail stores and
local businesses.

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 28


MarketingSherpa's Email Marketing Metrics Guide

DoubleClick estimates that more than one-half (58%) of online buyers learn
about new products/services from permission-based email, based on an analysis
conducted by the company in late 2001. As the volume of email that clogs
Internet users’ in-boxes has grown, however, Forrester Research reports many
individuals are becoming less receptive to such offers. The company estimated
that by early 2002, the number of Internet users who thought email was a good
way to learn about new products and promotions had declined from 50% in 2000
to only 38% and that consumers were only half as likely to initiate a purchase
from an email offer compared to 2000.

2.16 How Do Internet Users Find Out About New


Products/Services (2001)
As a percent of U.S. Internet purchasers over a 3-month period

Visit Website 76%

Permission Email 58%

A Friend 34%

Banner Ad 30%

Regular Mail 29%

Unsolicited Email 12%

Search Engines 3%

Magazines 3%

Television 2%

0% 20% 40% 60% 80% 100%

Source: DoubleClick, 10/2001

2.17 How Recipients Respond To Email Promotions (2000/2002)


As a percent of survey respondents

2001 Survey 2000 Survey

Click-Through And 20%


Purchase
Immediately 37%

Click-Through For 42%


Information And
Purchase Later 45%

Have Never 38%


Purchased As A
Result Of An Email 18%

0% 10% 20% 30% 40% 50% 60%


Source: NFO, 10/2001

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 29


MarketingSherpa's Email Marketing Metrics Guide

The 2001 NFO Consumer Email Study (see 2.17) reports that 82% of online
buyers have completed at least one purchase in response to an email promotion
they received either directly from a merchant or indirectly through a friend or
family member. Among the respondents, 37% clicked-through immediately and
45% purchased at a later date (38% ultimately completed the transaction online
and the other 7% purchased offline).
The most common reasons why Internet users forward an email on to others
are it is either relevant to the recipient’s interests or it is considered amusing,
according to IMT Strategies. DoubleClick reports that the overall pass-along rate
for permission-based email from marketers was 0.37% between Q1-2001 and

2.18 Reasons Internet Users Forward Email To Others (2001)


As a percent of survey respondents

Relevant 41%

Funny 35%

Work-Related 7%

Informative 6%

Cool 4%

New Technology 4%

Prize/Coupon/Reward 1%

0% 10% 20% 30% 40% 50%


Source: IMT Strategies, 9/2001

2.19 Average Opt-In Email Pass-Along Rate (2002)


As a percent of messages sent

Brand 0.70%

Retail 0.60%

Catalog 0.40%

Financial Services 0.40%

Entertainment 0.30%

Hospitality 0.20%

B-to-B 0.20%

0.0% 0.2% 0.4% 0.6% 0.8% 1.0%

Source: DoubleClick, Q1-2002

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 30


MarketingSherpa's Email Marketing Metrics Guide

Q1-2002 and 0.33% for publishers. The highest pass-along rate occurs in the
retail sector (0.6%), according to DoubleClick, followed by catalogers and
financial services at 0.4% each. The lowest pass-along rates were among
companies in the hospitality and B-to-B sectors, with an average 0.2% each.

2.20 Viral Pass-Along Rate From Select MarketingSherpa Case


Studies

Pass-
Click Along
Marketer Sector Campaign Year Rate Rate
Personalized text email with link
IBM Technology to rich media holiday eCard 2000 25% 5%
Text email with rich media
eBrochure attached; Brochure
Drexel provided “forward button” for
Heritage Retail pass-along 2001 24% 2.3%
Rich media email with “play”
button to activate; Provided
RioLabs Technology “forward button” for pass-along 2001 3.9% 0.24%
AsExpressedByYou microsite
enables visitors to design their
own unique martini glass online
Bombay Consumer and email pictures of it to
Sapphire Products friends; 25% of users did so 2001 n/a 25%
Banner ad-driven sweepstakes
enabled entrants to send eCard
to friends and receive additional
entries for each card picked-up;
Entrants could check stats
online; Average entrant sent 9
Singapore Travel eCards, 70% of 360,000 total
Airlines Services entrants were viral 2002 n/a n/a
Source: MarketingSherpa Inc.

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 31


MarketingSherpa's Email Marketing Metrics Guide

Internet users in the Quris survey indicated that almost two-thirds (60%) of the
permission email they received was poorly done. The most common complaints
that related to the email messages themselves include: they are sent too
frequently (66%); nothing of value is sent (59%); and the messages are poorly
targeted (53%) or cover products that the recipient rarely purchases (46%). The
most frequently mentioned complaints overall were suspicions that some
marketers were sharing the respondent’s email address without his or her
consent (74%) and that respondents had been unsuccessful in attempts to
unsubscribe to some opt-in lists (69%).

2.21 Biggest Complaints About Permission Email (2002)


Percent of respondents who agree with complaint

Suspect Company Is Sharing My Email


74%
Address

Tried Unsubscribing In Vain 69%

Messages Sent Too Frequently 66%

Nothing Of Value Being Sent 59%

Too Much Email In General 53%

Messages Not Targeted To Interests 53%

Product I Seldom Buy 46%

Not Good Price 43%

Emails Do Not Affect Purchase Decisions 37%

Messages Too "Hard Sell" 36%

No Longer Interested In Topic 27%

Inferior Products Offered 25%

Emails Use "Rich Media" 15%

Emails Use HTML 7%

0% 20% 40% 60% 80% 100%

Source: Quris, 5/2002

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 32


MarketingSherpa's Email Marketing Metrics Guide

Considering the most frequently mentioned complaints about permission email


among Internet users, many of their suggested improvements are not surprising.
The most common suggestions for marketers are to send messages less
frequently, offer better deals in their emails and improve the relevancy and
targeting of messages, according to Quris.

2.22 How Can Permission Email Marketers Improve (2002)


As a percent of respondents who agree with each suggestion

Less Frequent Messages 42%

Better Prices And Offers 35%

More Relevant, Targeted Messages 24%

More Control Over Email Options 18%

Time Savers & Convenience 18%

Exclusive Email Offers 17%

More Self-Personalized Content 9%

More Entertaining Messages 6%

More Timely Messages 6%

More Reminders 2%

More Frequent Messages 1%

0% 10% 20% 30% 40% 50%

Source: Quris, 5/2002

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 33


MarketingSherpa's Email Marketing Metrics Guide

2.23 Growth In Volume Of Spam (2001/2002)


Number of messages received during each month

Jun-02 4,825,144

May-02 4,686,983

Apr-02 4,339,799

Mar-02 3,773,738

Feb-02 3,187,430

Jan-02 2,777,017

Dec-01 1,969,041

Nov-01 1,956,529

Oct-01 1,692,333

Sep-01 1,457,337

Aug-01 1,504,043

Jul-01 1,018,737

Jun-01 879,253

May-01 930,546

Apr-01 683,579

Mar-01 688,545

Feb-01 623,368

Jan-01 675,200
0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Source: Brightmail, 7/2002

During the 12-month period through June 2002, Brightmail screened a total of
12.1 billion email messages for its customers -- ISPs and large companies -- and
tagged 2.1 billion of those messages as spam. The monthly volume of spam
received by the company’s benchmark Probe Network increased by 74% from
January 2002 to June and by 449% during the 12-month period between June
2001 and June 2002. The total number of “spam attacks” reported for the Probe
Network have increased from 675,200 in January 2001 to 4.83 million in June
2002. Spam accounted for more than one-third (34%) of all messages screened
by the company in June 2002, up from only 8% the previous September (see
2.24).
At the level of the individual Internet user, a June 2001 survey by the Gallup
Organization (see 2.26) found the largest share of respondents reported that 10%
or less of the email they received was spam, approximately 40% indicated that
the level was one-third or more and almost one-in-five indicated that a majority of
the messages they receive are spam.
More recently, the Quris survey found that spam accounted for 35% of the
email received by its respondents overall. Among users who check their email
primarily at home, the level was 37%, which dropped to 28% among users who
check their email at home and at work equally.

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 34


MarketingSherpa's Email Marketing Metrics Guide

2.24 Share Of Email Filtered As Spam (2001/2002)


As a percent of all email received

June 2002 34%

March 2002 25%

September 2001 8%

0% 10% 20% 30% 40%


Source: Brightmail, 7/2002

A July 2002 survey by MessageLabs found that more than one-half of the IT
and business managers from the U.S. who responded reported that spam
accounts for 30% or more of the email they receive each day. The amount of
spam received by survey respondents from the U.K. was significantly less, at an
average of 15% of daily emails.
The total annual volume of spam messages received by Internet users is
expected to jump from an average of 595 in 2001 to 738 this year, according to
Jupiter Media Metrix. By 2004, the company predicts the volume of spam will
more than double, to an average 1,671 messages or almost five per day.

2.25 Growth In Spam/UCE Per Internet User (2000-2006)


Number of messages per user per year

2,000
1,671
1,600
1,393

1,145
1,200
927
738
800
595
451
400

0
2000 2001 2002 2003 2004 2005 2006
Source: Jupiter Media Metrix, 2002

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 35


MarketingSherpa's Email Marketing Metrics Guide

2.26 Proportion Of Internet Users’ Email That Is Spam/UCE (2001)


As a percent of survey respondents; indicates share of weekly email received at home and at work
that is spam

91% To 100%
1%
10% Or Less
71% To 90%
30%
7%

51% To 70%
10%

11% To 20%
41% To 50% 16%
10%

31% To 40% 21% To 30%


11% 15%

Source: Gallup Organization, 6/2001

2.27 Categories Of Spam Received (2002)


As a percent of all spam received by Brightmail Probe Network

Other
15% Financial
20%

Adult
8%
Scams
Leisure 6%
3%
Health
4%
Internet
13%

Spiritual Products
4% 27%

Source: Brightmail, 6/2002

2.28 Spam Filtering Among U.S. Internet Users (2002)


As a percent of survey respondents

Use Spam
Filter Within
Email Client
21%

Do Not Use
Filter
52%

Uncertain
27%

Source: Opt-In New s, 2002

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 36


MarketingSherpa's Email Marketing Metrics Guide

As the volume of spam grows, Internet users are becoming more aggressive
in dealing with the problem. Opt-In News reports that one-in-five use the filtering
capability provided by their email software (see 2.28). A February 2002 survey by
Ipsos-Reid found that 58% of adult Internet users regularly delete Unsolicited
Commercial Email (UCE) or spam without reading it and that 29% say they have
contacted the sender to request removal of their email address.
Recent surveys by Quris and Forrester Research returned similar findings.
Quris reports that 52% of its survey respondents generally delete spam without
reading it, but 12% are curious to read it. Quris also found that only 3% of its
respondents indicated that they delete opt-in or permission-based email without
reading it.

2.29 Internet Users Who Delete Messages Without Reading (2002)


As a percent of survey respondents

Quris 52%

Forrester Research 55%

Ipsos-Reid 58%

IMT Strategies 77%

0% 20% 40% 60% 80% 100%

Source: As Noted, 2002

2.30 Internet User Attitudes Towards Spam/UCE (2002)


As a percent of survey respondents

Messages From Permission Email Company


Messages From Unrecognized Company
80%

60% 52%
49%

40%
29%
21%
20% 13% 15%
12%
6%
1% 3%
0%
Eager To Curious To Indifferent Open But Delete Without
Read Read Annoyed Reading
Source: Quris, 5/2002

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MarketingSherpa's Email Marketing Metrics Guide

Although the majority (67%) of Internet users indicate that unsolicited email
promotions offer nothing of interest, according to Forrester Research, 25% do
read them and 16% occasionally forward them to friends or family. Both Quris
and Ipsos-Reid report that 12% of users actually read their unsolicited email while
the Gallup survey indicates 13% of its respondents do not mind receiving
unsolicited email or find them interesting and useful on occasion.

2.31 Internet User Attitudes Towards Marketing Emails (2002)


As a percent of survey respondents

I get too many email


promotions
70%

They offer nothing of


67%
interest

I delete them without


reading
55%

I read them in case


something catches 25%
my eye
They are a great way
to find out about new 26%
products and services

I sometimes forward
16%
them

I often buy products


advertised
6%

0% 20% 40% 60% 80% 100%

Source: Forrester Research, 6/2002

2.32 Internet User Attitudes Towards Spam/UCE (2001)


As a percent of survey respondents

Hate Spam 42%

Find It Annoying But Don't Hate It 45%

Have No Strong Feelings Either Way 9%

Sometimes Find It Interesting 4%

Really Like To Receive Spam 0%

0% 10% 20% 30% 40% 50% 60%

Source: Gallup Organization, 6/2001

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 38


MarketingSherpa's Email Marketing Metrics Guide

Given the increased in the volume of spam received by most Internet users,
it’s not surprising that 26% of consumer marketers and 35% of B-to-B marketers
report that the number of spam-related complaints they’re receiving have
increased significantly during the last 12 months. More than 60% of survey
respondents, however, report little or no change in their complaint levels.
The type of opt-in list used by marketers seems to make little difference in
spam complaint levels, according to survey respondents; two-thirds or more of
the respondents using each type of list report little or no change over the last
year. One surprise, however, was that marketers who use double opt-in lists
were more likely to report a significant increase in spam-related complaints than
either single opt-in or opt-out list owners.

2.33 Spam Complaint Trends Among Email Marketers


As a percent of survey respondents

B-to-C Marketers B-to-B Marketers Mixed Audience Marketers


100%

80%
66.2%
61.0% 61.6%
60%

40% 34.5%
25.8% 28.7%

20%
8.0% 4.6% 9.7%

0%
Increased Significantly Little To No Change Decreased
Significantly
Source: MarketingSherpa + Intermarket Group, 7/2002

2.34 Spam Complaint Trends Among Email Marketers By List Type


As a percent of survey respondents

Increased Significantly Little To No Change Decreased Significantly


100%

77.9% 79.8%
80%
65.5%
60%

40%
23.0%
20% 13.0% 11.5% 11.2%
9.1% 9.0%

0%
Single Opt-In List Double Opt-In List Opt-Out List
Source: MarketingSherpa + Intermarket Group, 7/2002

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 39


MarketingSherpa's Email Marketing Metrics Guide

2.35 Spam Complaint Trends Among Email Marketers By Mailing


Frequency
As a percent of survey respondents

Increased Significantly Little To No Change


Decreased Significantly

17.8%
Daily 62.2%
20.0%

12.4%
Weekly 75.9%
11.7%

17.0%
Bi-weekly 76.1%
6.8%

16.6%
Monthly 74.2%
9.3%

11.5%
Quarterly 82.7%
5.8%

0% 20% 40% 60% 80% 100%

Source: MarketingSherpa + Intermarket Group, 7/2002

Eighty percent or more of the survey respondents for each mailing frequency
indicated that spam-related complaints have either changed little or have actually
decreased during the past 12 months.
There does, however, appear to be a correlation between the frequency of
mailing to an opt-in list and the level of complaints. With only one exception -- for
bi-weekly delivery -- the number of respondents that have seen a significant
increase in complaints expands steadily as the frequency of delivery increases.
Less than 6% of marketers who mail quarterly report increased complaint levels
compared to 9% among marketers who mail monthly, 12% for weekly mailings
and 20% for daily mailings.

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 40


MarketingSherpa's Email Marketing Metrics Guide

Section III.
Email Marketing Activity

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 41


MarketingSherpa's Email Marketing Metrics Guide

The most common objective for email marketing programs is to maintain


communication with customers and improve customer retention. Other frequently
mentioned objectives include generating sales leads and disseminating
information/educating sales prospects.
Among those marketers that do use email for direct sales, many rank direct
sales as the primary goal of their email marketing effort.

3.01 Objectives Of Email Marketing Programs (2002)


As a percent of survey respondents

MarketingSherpa + Intermarket Group DoubleClick e-Dialog

80%
Generate Leads 65%
59%

49%
Disseminate
55%
Information
58%

87%
Customer
55%
Relations/Retention
60%

N/A
Customer
55%
Awareness/Branding
41%

67%
Direct Sales 53%
42%

0% 20% 40% 60% 80% 100%


Source: As noted, 2002

3.02 Primary Goal Of Email Marketing Programs (2002)


As a percent of survey respondents

Acquire New
Customers
39%

Deepen
Relationships
Shorten With Existing
Purchase Cycle Customers
3% 33%

Disseminate
Information
7%
Sell Products Or
Services
18%
Source: e-Dialog, 4/2002

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 42


MarketingSherpa's Email Marketing Metrics Guide

Customer relations is the most frequently mentioned objective for email


marketing programs among our own survey respondents. Among the B-to-B
marketers only, generating sales leads and educating sales prospects are the
most frequently mentioned objectives. Consumer marketers are almost twice as
likely as B-to-B marketers to identify direct sales as an objective of their email
marketing; customer relations is the second most frequently mentioned objective
among those survey respondents that target consumers.

3.03 Objectives Of Email Marketing Programs


As a percent of survey respondents

B-to-C Marketers B-to-B Marketers


Mixed Audience Marketers

48.5%
Direct Sales 32.3%
58.7%

60.6%
Generate Sales
65.2%
Leads
39.3%

63.8%
Educate Sales
63.2%
Prospects
38.2%

33.7%
Drive Offline Sales 24.2%
29.3%

47.0%
Branding 39.8%
38.5%

64.0%
Customer Relations 59.3%
56.1%

0% 20% 40% 60% 80% 100%

Source: MarketingSherpa + Intermarket Group, 7/2002

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 43


MarketingSherpa's Email Marketing Metrics Guide

3.04 U.S. Email Marketing Expenditures (2000-2006)


Millions of dollars

Email To Rental Lists Email To Customers


$8,000

$6,498
$6,000

$4,280

$5,742
$3,122
$4,000

$1,770
$1,127
$2,000
$396

$275
$247

$244
$220

$223

$207

$224
$0
2000 2001 2002 2003 2004 2005 2006
Source: Forrester Research, 2002

3.05 Email Share Of Total Digital Marketing Budget (2000-2006)


As a percent of annual expenditures

40%
33.7% 32.7%
32.0%
29.6%
30%
24.7%

18.0%
20%

8.0%
10%

0%
2000 2001 2002 2003 2004 2005 2006
Source: Forrester Research, 2002

Companies collectively spent approximately $1.35 billion on email marketing


last year, according to Forrester Research, accounting for 18% of digital
marketing expenditures and 0.3% of total marketing expenditures. The DMA
estimates that email marketing expenditures were $927 million in 2001 and that
they generated 15% of all online sales, up from 3% in 2000. The overwhelming
majority (84%) of email-related expenditures are allocated to activities which
focus on house lists and customer retention/communication efforts.
By 2005, Forrester predicts that spending for email marketing will grow five-
fold, accounting for one-third of total digital marketing expenditures compared to
18% last year.
Among companies that use email marketing, the largest share of most
marketing budgets in 2002 is allocated towards direct mail, according to e-Dialog.
The companies surveyed by e-Dialog expect email marketing to jump into second
place this year in terms of its share of total marketing expenditures and push

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 44


MarketingSherpa's Email Marketing Metrics Guide

spending on events, sponsorships and similar promotion-oriented vehicles as a


group into third place, followed by in descending order, offline advertising, non-
email online advertising and telemarketing.
One-half of email marketers surveyed earlier this year by DoubleClick plan to
increase their overall marketing budgets during the next 12 months while almost
one-in-four (23%) plan to decrease their budgets. At the same time, 95% of
respondents in both the DoubleClick and the e-Dialog surveys plan to either
increase their spending on email marketing or at least maintain it at the same
level as last year.

3.06 Changes In Email Marketing Expenditures (2002)


As a percent of survey respondents

Total Marketing Budget For 2002 (DoubleClick)


Email Marketing Budget Over Next 12 Months (DoubleClick)
Email Marketing Budget For 2002 (e-Dialog)
80%

61%
60% 55%
50%

39%
40% 34%
27%
23%
20%
5% 5%

0%
Increase Over 2001 About The Same Decrease From 2001

Source: As noted, 2002

Marketers also plan to increase their spending on direct response television


advertising by an average of 18% in 2002, according to DoubleClick, but
decrease expenditures for general TV and for radio advertising by 1% and 2.3%
respectively. Other categories that DoubleClick predicts will receive increased
funding are channel marketing (14.9% increase) and out-of-home marketing
(4.9% increase).
The biggest decline in spending is expected in catalog marketing (13.4%
decrease), according to DoubleClick. e-Dialog survey respondents expect to
reduce their spending on broadcast advertising -- radio and TV combined -- in
2002 by 9.6% from last year’s level.
The share of overall marketing budgets allocated to email marketing is
expected to increase by a double-digit amount for 2002, according to both the
DoubleClick and e-Dialog surveys (see 3.07). The marketers surveyed by
DoubleClick plan to increase their allocation to email marketing by an average of
17% and e-Dialog reports that its survey respondents plan an even larger
increase of 33.5%.
The two companies disagree about marketers’ intentions for non-email online
advertising, with DoubleClick survey respondents planning a 9% average

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 45


MarketingSherpa's Email Marketing Metrics Guide

increase in the allocation level and e-Dialog respondents planning an average 4%


decrease. (It’s worth noting that the Interactive Advertising Bureau (IAB) recently
reported that aggregate online advertising expenditures declined in Q1-2002 by
6.5% from the Q4-2001 level and by 18% from the Q1-2001 level.)
Both companies predict that budget allocations for direct mail and
telemarketing will decline in 2002 from their respective levels last year.

3.07 Changes In Allocation Of Marketing Expenditures (2002)


Percent change in amount budgeted for 2002 over 2001 for each category

DoubleClick e-Dialog

33.5%
Email Marketing
17.0%

-3.9%
Online Advertising
9.0%

-4.4%
Telemarketing
-6.8%

-9.4%
Direct Mail
-6.9%

-20% -10% 0% 10% 20% 30% 40% 50%

Source: As Noted, 2002

The overall average cost per conversion for email marketing increased by
10% last year among acquisition-oriented campaigns and by 4% among
customer retention campaigns, according to Jupiter Media Metrix. Although
overall average click-through rates and conversion rates both declined by 20-
40%, the company reports that much of the deterioration in performance metrics
was offset by declining prices for media and delivery.
Although the costs for campaign delivery are unlikely to increase anytime in
the foreseeable future, an improving economy will likely reduce the availability of
the CPA and CPC deals that have placed downward pressure on the cost of
media noted by Jupiter between 2000 and 2001.

3.08 Average Email Marketing Cost Per Conversion (2000/2001)

---------Acquisition--------- ----------Retention----------
2000 2001 2000 2001
Media CPM $200.00 $125.00 -- --
Delivery CPM -- -- $30.00 $15.00
Click-Through Rate 7.0% 5.0% 10.0% 8.0%
Conversion Rate 2.5% 2.0% 5.0% 3.0%
Cost Per Conversion $114.00 $125.00 $6.00 $6.25
Source: Jupiter Media Metrix, 10/2001

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MarketingSherpa's Email Marketing Metrics Guide

3.09 Estimated Cost Of List Appending (2002)


Cost per record appended

High $5.75

Mean $1.25

Low $0.55

$0 $1 $2 $3 $4 $5 $6 $7
Source: Opt-In New s, 2002

The average cost for appending services is $1.25 per record, which includes
the integration of offline customer data with email addresses, according to Opt-In
News. The cost of such services, however, varies significantly, from as little as
$0.55 per record to $5.75 per record on the high end. Opt-In News predicts that
the cost of appending will decline significantly during the next three years as its
popularity increases among marketers and the practice becomes more
widespread.

3.10 Amount Budgeted Annually For Email Database Hygiene (2001)


As a percent of email marketers

Do Not Know 15%

> $250,000 1%

$200 - 250,000 2%

$150 - 200,000 4%

$100 - 150,000 2%

$50 - 100,000 4%

$25 - 50,000 5%

$10 - 25,000 12%

< $10,000 55%

0% 20% 40% 60% 80%


Source: AIM/Return Path
The majority (55%) of email marketers budget less than $10,000 per year to
maintain their house email lists, according to Return Path. Only 1% of companies

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 47


MarketingSherpa's Email Marketing Metrics Guide

spend more than $250,000. The cost of email database hygiene encompasses a
variety of tasks, including the removal of phony email addresses, updating
customer addresses that have changed and fixing addresses that have been
mistakenly entered incorrectly by the customer. The costs are something that
should not be overlooked, especially given that 32% of email addresses change
each year for various reasons, according to NFO WorldGroup.

3.11 Accuracy Of Email Broker List Counts (2002)


As a percent of survey respondents

Always/Usually
3%
Accurate

Accurate Only
71%
Some Of The Time

Never Accurate 26%

0% 20% 40% 60% 80% 100%

Source: Opt-In New s, 5/2002


One of the initially perplexing results of our survey was the surprising number
of respondents that reported improbably high open rates and click-through rates
for campaigns using third-party email lists and email newsletter sponsorships.
Inasmuch as all answers were anonymous, there was no incentive for participants
to inflate their performance metrics.
The results can be explained in part by the practice of some vendors and
publishers to underreport the number of emails delivered, which artificially inflates
performance metrics, such as open rates, click-through rates and pass-along
rates. A recent survey by Opt-In News found that 97% of respondents thought
that email list brokers provided accurate counts to them only some of the time or
never.
Some vendors and publishers also report click-through rates as a percentage
of emails that were opened instead of total emails delivered. In a campaign that
achieves a 20% open rate, for example, a click rate calculated off of emails
opened would be five-times higher than the rate based on emails delivered.

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 48


MarketingSherpa's Email Marketing Metrics Guide

More than one-half (56%) of marketers surveyed by e-Dialog report that email
list-related challenges are their number one concern. The most frequently
mentioned challenge is finding good prospects lists, which is increasingly difficult
as list fatigue and the growth in spam and other email competing for people’s
attention drives down open rates and click-through rates for third-party lists. Fifty-
one percent of respondents indicated that obtaining email addresses for their
existing customers was among their top three challenges.
Systems- and logistics-related challenges were the least frequently cited
options by survey respondents. Measuring results was identified as the number
one challenge by 15% of respondents and among the top three challenges by
40%. Technical challenges were cited as the number one challenge and among
the top three challenges by 11% and 30% of respondents respectively. Handling
campaign response was cited as the number one challenge and among the top
three challenges by 3% and 27% of respondents respectively.

3.12 Biggest Challenges For Email Marketers (2002)


As a percent of survey respondents

#1 Challenge
Ranked Among Top 3 Challenges

Finding Good Prospect Lists 38% 29%

Getting Email Addresses For Current


18% 33%
Customers

Finding/Creating Good Content 16% 41%

Measuring Results 15% 40%

Technical Challenges 11% 30%

Handling Campaign Response 3% 27%

0% 20% 40% 60% 80% 100%


Source: e-Dialog, 4/2002

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 49


MarketingSherpa's Email Marketing Metrics Guide

3.13 Barriers To Expanding Email Marketing Programs (2002)


As a percent of survey respondents

Privacy Issues 38%

Our Customers Are Not Online 30%

Ineffective 26%

Lack Of Resources Or In-house


17%
Capabilities

Inconsistent Reporting 17%

Not Enough Housefile Names 12%

Too Expensive 4%

Too Complicated 2%

Other 11%

0% 10% 20% 30% 40% 50%


DoubleClick, 2002

Privacy issues are considered to be the biggest obstacle that companies must
contend with in expanding their email marketing efforts, according to DoubleClick.
The second and third most frequently mentioned barriers are that respondents’
customers are not yet online and that email marketing is viewed by the
respondents as ineffective.
Internal limitations, such as a “lack of resources or in-house capabilities” and
an insufficient number of house list names with email addresses were mentioned
by 17% and 12% of respondents respectively. The lack of email addresses for
existing customers was also identified as the number one challenge by 18% of
marketers that participated in the e-Dialog survey (see 3.12).

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MarketingSherpa's Email Marketing Metrics Guide

3.14 Performance Metrics Tracked By Email Marketers


As a percent of survey respondents

B-to-C Marketers B-to-B Marketers


Mixed Audience Marketers

57.8%
House List Open
50.8%
Rate
63.2%
34.9%
Rented List Open
28.8%
Rate
41.6%
60.1%
House List Click-
57.8%
Through Rate
74.2%
37.5%
Rented List Click-
32.0%
Through Rate
47.5%

Newsletter 38.3%
Sponsorship Click- 32.3%
Through Rate 40.5%
73.9%
Bounce
76.5%
Rate/Undeliverables
86.5%
73.8%
Opt-Out/Unsubscribe
76.3%
Rate
87.2%
70.9%
Spam Complaints 70.0%
81.3%

0% 20% 40% 60% 80% 100%

Source: MarketingSherpa + Intermarket Group, 7/2002

Bounce rates, opt-out rates and spam complaints are the most widely used
performance metrics among email marketers, with more than 70% of survey
respondents tracking each. Both our own survey and a similar Q1-2002 survey
by e-Dialog found that approximately one-half of marketers measure house list
open rates and 60% measure click-through rates.
Companies that target consumers are generally more likely than B-to-B
marketers to track various aspects of their email campaigns. This was the case
among respondents for every one of the individual metrics that we inquired about
in the survey.
Approximately 70% or more of email marketers surveyed by e-Dialog either
already track, or are interested in tracking, most of the nine different performance
metrics mentioned by the company. Total click-through rate, unsubscribe rate
and open rate are the most widely used metrics among those included in the
survey. The most frequently mentioned metrics that respondents would like to

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 51


MarketingSherpa's Email Marketing Metrics Guide

track, but don’t at present, are pass-along rate (mentioned by 46% of


respondents), brand recognition (45%) and conversion rates for offline channels
(37%).

3.15 Performance Metrics Tracked By Email Marketers (2002)


As a percent of survey respondents

Currently Measure Want To Measure

Total Click-Through
64% 19%
Rate

Unsubscribe Rate 61% 16%

Open Rate 47% 25%

Conversion Rate
46% 28%
(Website)
Unique Click-
43% 29%
Through Rate

Direct Revenue 38% 32%

Email Pass-Along
23% 46%
Rate
Conversion Rate
18% 37%
(Other Channels)

Brand Recognition 9% 45%

0% 20% 40% 60% 80% 100%


Source: e-Dialog, 4/2002

TRACKING EMAIL METRICS ISN’T AS SIMPLE AS IT SEEMS

You've selected your lists and got your campaign out, now you want to compare the results
for each list. Unfortunately, performance comparisons can be very difficult because various
vendors track responses in completely different ways.
Melissa Edison Barnes, co-founder of Blue Ink Solutions says, "It's imperative to understand
what raw data means from each list, how it compares against others, and how each list manages
tracking and offers that raw data back." For example:

• Unique versus aggregate click tracking. Barnes’ colleague and co-founder, Clint Kaiser
explains, "If the recipient clicks on a link 10 times, does that register as ten clicks or does
that recognize that individual as the same person who's clicked the other nine times?"
• What does the tracking system consider an "open event"? If a recipient's Outlook preview
box opens the email automatically without their proactive click to open, does than count as
an open?
• Can you track response rates of AOL, Yahoo, and Hotmail separately? Each of these may
have very different response rates from "regular" email addresses because of their bulk mail
folder systems, their ability to receive rich media creative (or not), and the predilection of
people to set up "spare" mailboxes in each that they may rarely check for mail.

Read the full case study at: http://www.marketingsherpa.com/sample.cfm?contentID=2040

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MarketingSherpa's Email Marketing Metrics Guide

3.16 Most Commonly Used Marketing Activities (2002)


Percent of survey respondents engaged in each activity

Print Advertising 86%

Direct Mail 58%

Online Advertising 54%

Public Relations 54%

TV (General) 53%

Promotions/Coupons 51%

Trade Shows 51%

Radio Advertising 47%

Retail Displays 47%

Email Marketing 44%

Catalogs 34%

Channel Marketing 33%

Telemarketing 31%

TV (Direct Response) 21%

Out Of Home 14%

0% 20% 40% 60% 80% 100%

Source: DoubleClick, 2002


Print advertising is the most widely used marketing tactic, according to
DoubleClick, followed by direct mail, non-email online advertising and public
relations. e-Dialog found that among the companies it surveyed, respondents are
allocating the largest share of their overall marketing budgets -- an average of
25% -- to direct mail in 2002.
Non-email online advertising is used by 54% of the marketers surveyed by
DoubleClick and email marketing is used by 44% of respondents.

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MarketingSherpa's Email Marketing Metrics Guide

3.17 Effectiveness Of Selected Marketing Activities (2002)


As a percent of survey respondents

Most Effective Second Most Effective


Third Most Effective

Email Marketing 32% 30% 20%

Direct Mail 32% 29% 19%

Telemarketing 17% 19% 17%

Offline Broadcast
17% 16% 16%
Advertising

Internet Advertising 8% 17% 17%

Other
(Sponsorships, 23% 18% 23%
Events, Etc.)

0% 20% 40% 60% 80% 100%


Source: e-Dialog, 4/2002

Email marketing and direct mail are each ranked as the number one most
effective marketing tactic by 32% of the marketers surveyed by e-Dialog. Both
are also ranked as the top marketing tactics overall, with 82% of respondents
indicating that email marketing is either the number one, second or third most
effective tactic available to them and 80% placed direct mail in one of those three
categories. Non-email Internet advertising is ranked the lowest among the
various choices presented in the survey, with only 42% of respondents identifying
it among their top three most effective marketing tactics.

Copyright © 2002 by Marketing Sherpa Inc. All Rights Reserved. 54


MarketingSherpa's Email Marketing Metrics Guide

Section IV.
Opt-In Email List Building

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MarketingSherpa's Email Marketing Metrics Guide

The most commonly used methods for building opt-in email lists are focused
around list owners’ own websites. The majority of our survey respondents -- and
almost two-thirds (62%) of consumer marketers -- include an opt-in feature on
their homepage; check boxes on order forms and website registration forms are
also widely used by respondents.
The use of sweepstakes and contests is a popular tactic among consumer
marketers, with more than one-third (36%) of survey respondents using them.
Consumer marketers are also three times more likely than B-to-B marketers to
employ co-registration deals. On the flip-side, B-to-B marketers are more likely to
use telemarketing in their list building efforts.
Despite the recent interest in list appending, few marketers appear to be using
the tactic. Although it is slightly more popular among the consumer marketers we
surveyed, only 7% of them currently use appending and the number drops to 4%
among B-to-B marketers.

4.01 How Do Marketers Gather Opt-In Names


As a percent of survey respondents; more than one response allowed

B-to-C Marketers B-to-B Marketers


Mixed Audience Marketers

55.3%
Homepage Sign-up
55.9%
Form
61.6%

49.1%
Homepage Link To
44.1%
Sign-up Form
45.9%

46.4%
Checkbox On
35.3%
Reg./Order Forms
47.2%

13.5%
Co-registration Deals 6.5%
17.3%

19.9%
Sweepstakes/Contests 9.1%
36.2%

11.1%
Premium/Free Gift With
8.7%
Sign-up
13.8%

11.6%
Telemarketing 19.8%
7.9%

4.9%
List Append 4.0%
7.2%

0% 20% 40% 60% 80%

Source: MarketingSherpa + Intermarket Group, 7/2002

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MarketingSherpa's Email Marketing Metrics Guide

4.02 What Types Of House Lists Are Marketers Developing


As a percent of survey respondents; more than one response allowed

Single Opt-In Double Opt-In Opt-Out


80%

62.5%
60%
49.7% 50.1%
45.0%

40% 31.4% 31.2%


25.3% 23.4%
19.9%
20%

0%
B-to-C Marketers B-to-B Marketers Mixed Audience
Marketers
Source: MarketingSherpa + Intermarket Group, 7/2002
Single opt-in lists are generally the most popular among survey respondents
who have one or more house email lists. Almost two-thirds (63%) of consumer
marketers use single opt-in along with 50% of B-to-B and mixed-audience
marketers (companies targeting both businesses and consumers). Marketers
that target a mixed audience are the most likely to use double opt-in for their
house list while B-to-B marketers are more likely to employ an opt-out approach
with their customer email addresses.
Two-thirds of consumer marketers and the majority of other survey
respondents indicate that they have seen little to no change over the past 12
months in the willingness of Internet users to join their own opt-in email lists.
Surprisingly, 26% of consumer marketers and one-third (35%) of B-to-B
marketers report that the interest among customers/visitors has actually
increased significantly since mid-2001, in spite of the growth in messages that fill
their inboxes each day.

4.03 Willingness Of Recipients To Opt-In To Email Lists


As a percent of survey respondents

B-to-C Marketers B-to-B Marketers Mixed Audience Marketers


100%

80%
66.2%
61.0% 61.6%
60%

40% 34.5%
25.8% 28.7%

20%
8.0% 4.6% 9.7%

0%
Increased Significantly Little To No Change Decreased
Significantly
Source: MarketingSherpa + Intermarket Group, 7/2002

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LESS IS BETTER Privacy continues to be a significant issue among many Internet users.
WHEN IT COMES TO Seventy-eight percent of respondents to a June 2001 survey by Gallup were
WEB FORMS either somewhat concerned or very concerned about the privacy of both the
information they provided to websites as well as their activities while they were
NetLine develops online.
Internet-based communi- Nine months later, Jupiter Media Metrix reports that 70% of the users it
cation and marketing surveyed are concerned about privacy, although 82% are nevertheless still willing
programs for B-to-B to share various personal details if necessary when registering with websites.
marketers. Raechelle The Personalization Consortium also found that 82% of Internet users are willing
Drivon, NetLine's to provide details such as their gender, age and ethnicity to a website if it will
Marketing V.P., recently
remember their preferences and profile information.
ran an email marketing
campaign offering a free Marketers should not, however, take away from any of these surveys the
white paper download in notion that Internet users are enthusiastic about sharing their personal details,
order to collect new leads because that is definitely not the case.
for the company’s sales
reps.
Drivon tested two
4.04 Concern About Privacy Of Personal Information Provided Over
different registration The Internet (2001)
forms in the campaign. A Percent of survey respondents
short version asked for
contact information plus Very Somewhat
one non-required Concerned Concerned
additional question. The 28% 50%
longer version asked for
contact information plus
three optional questions.
Both forms also included
a pre-checked box that, if No Answer
left untouched, allowed 1%
Drivon to send additional Not At All
information, including Concerned
NetLine’s monthly email Not Too
3%
newsletter. Concerned
Which form worked 18%
best? The short form won Source: Gallup, June 2001
hands down, garnering a
74.6% conversion rate
(prospects who visited the 4.05 Internet User Attitudes About Registration And Privacy
landing page and Statements (2002)
completed the form), Percent of survey respondents
compared to only 50%
for the longer form. And
60% of all registration Concerned about
form users (both versions) 70%
privacy
left the pre-checked box,
to have their email address Willing to share
added to NetLine's list, personal details with 82%
checked. Drivon attributes websites
this lower-than-normal
Read privacy
percent to the fact “we
statements before 40%
were sending to a
registering
marketing audience, and
they are more savvy to Find privacy
checking or unchecking a statements easy to 30%
box.” understand

Read the full case study at: 0% 20% 40% 60% 80% 100%
http://www.marketingsherpa.
com/sample.cfm?contentID= Source: Jupiter Media Metrix, 3/2002
2105

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The Jupiter survey found that Internet users are most likely to share their
email address with a website and least likely to provide their phone number and
income. Gallup reports that 65% of the Internet users it surveyed are concerned
about sharing their home phone number, 53% mentioned their age and 51%
mentioned their address. Less than one-in-four (22%) were concerned about
sharing their email address, according to Gallup.

4.06 What Information Will Internet Users Share (2002)


As a percent of survey respondents

Email Address 61%

Full Name 49%

Username/Password 36%

Phone Number 19%

Household Income 18%

0% 20% 40% 60% 80%


Source: Jupiter Media Metrix, 3/2002

4.07 Benefits For Which Internet Users Would Exchange Personal


Information (1999/2001)
As a percent of survey respondents asked: “What benefits from a website or channel would motivate
you to exchange information about yourself?”

2001 1999

Guarantee that the information will not be 65%


misused 73%

39%
Eligibility to win a prize in a sweepstakes
48%

26%
Affinity points, such as frequent flyer miles
31%

Regular email updates for 31%


products/services of interest 29%

Access to more or better online 31%


content/information 28%

23%
Nothing
13%

0% 20% 40% 60% 80% 100%

Source: Jupiter Media Metrix, 5/2001 and 5/1999

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As the privacy concerns of Internet users have grown, so has the number of
individuals who look for a guarantee that the information they share with websites
will not be misused, according to Jupiter, from 65% in 1999 to 73% in 2001 (see
4.07). Jupiter also reports that user expectations of receiving some kind of
incentive -- such as affinity points or entry in a sweepstakes -- in return for their
personal details have also increased since 1999.

4.08 Popularity Of Different Opt-In Practices (2002)


Ranked from 1 (very negative) to 5 (very positive) with 3 being neutral

Unsubscribe Option In All Emails 4.7

Explicit No-Share-Address Policy 4.6

48-hour Email Support Answers 4.5

Editable Personal Preferences Page 4.4

Provide Phone Number In Emails 4.4

Explicit Privacy Policy 4.3

Double Opt-in Confirmation 4.2

Unchecked Default Opt-in Box 4.1

Third Party Privacy Seal In Email 3.9

Multiple Opt-in Email Products 3.3

Co-registration With Ad Partners 2.9

Assumed Permission By Default 1.5

Assumed Right To Share Address 1.4

0 1 2 3 4 5
Source: Quris, 5/2002

The value placed on privacy and control by Internet users is apparent in the
data from the Quris survey. Opt-in practices that support those objectives were
rated very high by survey respondents: the ability to unsubscribe from within each
email message was ranked by 91% either positive or very positive; 84% said the
same about an editable personal preferences web page and 77% liked double
opt-in confirmation.
In contrast, opt-in practices that assume permission without explicitly asking
were highly unpopular. Seventy-two percent of respondents rated this approach
either negative or very negative. The practice of sharing email addresses without
explicit permission was viewed negatively by 78% of survey respondents.

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The Quris findings should be considered carefully when evaluating tactics


such as list appending for adding email addresses to existing customer and
prospect house files. Opt-In News recently reported that among Internet users
who think they have received appended email, only 5% indicated they believe
permission had been given while 82% disagreed and 12% were uncertain.
As mentioned previously, despite their concerns about privacy, Internet users
are generally positive about various personalization and targeting strategies. A
recent survey by Quris asked users to rank nine different personalization models
on a scale of 1 (very negative) to 5 (very positive) -- with 3 being neutral -- and all
nine received a net positive rating. One intriguing aspect of the Quris survey
results was that the 30% of respondents who were most concerned about privacy
issues also assigned higher than average ratings to every one of the
personalization models by two- to four-tenths of a point, depending on the specific
model (e.g., “Demographic Targeting” was rated 4.0 by respondents concerned
about privacy compared to 3.7 among all respondents).

4.09 Popularity Of Personalization Models Among Email Recipients


(2002)
Ranked from 1 (very negative) to 5 (very positive) with 3 being neutral

Customizable
4.2
Content

Personalized Name 3.9

Demographic
3.7
Targeting

Reminders 3.6

Human Sales Reps 3.5

Geographic
3.5
Targeting

Account Summary 3.4

Targeted By Site
3.3
Purchase History

Targeted By
3.3
Content History

0 1 2 3 4 5
Source: Quris, 5/2002

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4.10 Opt-In Rates From Select MarketingSherpa Case Studies

Opt-In
Marketer Sector Year Incentive Rate Comments
Appeared as a pop-up co-
75% of branded offer on 3rd party
eBags Retail 2001 Sweepstakes entrants sites
Free email 7% of
Business newsletter on website
GetMarketing Services 2001 marketing visitors
95% of respondents from
Emailed news integrated campaign who
on additional visited website or res-
Business educational ponded w/ business reply
eMagine Services 2001 offers 95% card opted-in to list
Each game started by
asking if the visitor would
like to receive the Auto
Trader.com monthly
Auto Online game 61% of newsletter and occasional
Trader.com Media 2001 with prizes players third party special offers
Banner ad-driven
sweepstakes enabled
entrants to send eCard to
friends and receive add’l.
Singapore Travel 80% of entries for each card
Airlines Services 2002 Sweepstakes entrants picked-up
Instant messaging-style
banner ads achieved 5%
click rate, with 75% of
Aptech respondents registering
Computer Business Scholarship 75% of for a free personal
Training Services 2002 fund clicks counseling session
Integrated mktg campaign
for new product launch;
7.5% of website visitors
opted-in; 89% of opt-ins
answered add’l. non-
Consumer 50% of required questions on the
Minute Maid Products 2002 Sweepstakes entrants entry form
Receive future Rich media email
notices for campaign sent to house
Dallas Area other free ride 29% of opt-in list announcing a
Rapid Transit Government 2002 events opens civic transportation event
Up to 25-30% of website
5% of visitors referred by search
Investment Financial Free email website engine keyword adv’g opt-
House.com Media 2002 newsletter visitors in to receive newsletter
Email campaign to vendor
opt-in list; 60% of visitors
that registered to down-
60% of load white paper opted-in
Business White paper reg. to receive company email
NetLine Services 2002 download users newsletter
Source: MarketingSherpa Inc.

Although more than 90% of the marketers we surveyed reported no perceived


decrease over the past 12 months in the willingness of Internet users to opt-in to
their email lists, 70% of the Internet users surveyed recently by Forrester
Research said that they receive too many email promotions (see 4.11). Forrester
also reports that more than one-half of its respondents wonder how some of the

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companies that send them email obtained their email address (58%) and they
wish that it was easier to unregister from opt-in lists (52%).

4.11 Internet User Opt-Out Activity (2002)


As a percent of survey respondents

I get too many email promotions 70%

I wonder how companies got my name


58%
and email address

I have left a list I previously registered for 68%

I have unregistered from a list I didn't


58%
previously sign-up for

I wish it was easier to unregister 52%

0% 20% 40% 60% 80% 100%

Source: Forrester Research, 6/2002

4.12 Opt-Out Rate Trend For Newsletters vs. Sales Alerts


As a percent of survey respondents

Increased Significantly Little To No Change


Decreased Significantly

8.9%

Email Alerts 83.3%

7.8%

8.2%

Email Newsletters 87.8%

4.1%

0% 20% 40% 60% 80% 100%

Source: MarketingSherpa + Intermarket Group, 7/2002


The vast majority of our survey respondents reported little change in the opt-
out rate for their email newsletters or alerts and approximately 8% reported a
significant decrease in opt-out rates. The number of marketers that send email
alerts -- which are typically delivered frequently and at no set schedule -- and who
reported a significant increase in opt-out rates was almost twice the level among
companies sending email newsletters.

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The marketers in our survey that employ double opt-out for their house lists
were the most likely to report a significant change in unsubscribe rates over the
last 12 months. Approximately one-in-five respondents with double opt-out lists
indicated that their unsubscribe rates have declined significantly -- compared to
10% for single opt-in and, surprisingly, 15% for opt-out lists -- while 9% reported a
significant increase in opt-out rates.

4.13 Opt-Out Rate Trend By List Type


As a percent of survey respondents

Increased Significantly Little To No Change Decreased Significantly


100%
83.1%
78.5%
80% 71.5%

60%

40%

19.7%
20% 14.5%
10.4% 8.8%
6.6% 7.0%

0%
Single Opt-In List Double Opt-In List Opt-Out List
Source: MarketingSherpa + Intermarket Group, 7/2002

The seemingly counter-intuitive survey result above for opt-out lists provides
an opportunity to discuss briefly the usefulness of the opt-out or unsubscribe
metric. Although useful as a relative indicator of trends, opt-out rates can be
problematic for evaluating interest (or lack of interest) in a marketer’s email
promotions/content.
Many Internet users find it easier to simply delete messages from mailers
they’re no longer interested in rather than unsubscribe. This is especially true
with old fashioned listserv mailing lists and with lists that require the subscriber to
login to a website with a username/password and then “update” his or her
preferences. People have also become increasingly reticent to opt-out from
mailings they didn’t request -- or don’t remember requesting -- because of the
fear they will end up on one or more additional lists.

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4.14 Opt-Out Rate Trend By Frequency Of Mailing


As a percent of survey respondents

Increased Significantly Little To No Change


Decreased Significantly

15.2%
Daily 78.3%
6.5%

15.5%
Weekly 77.0%
7.4%

14.2%
Bi-weekly 80.2%
5.6%

15.1%
Monthly 77.6%
7.2%

8.9%
Quarterly 87.0%
4.1%

0% 20% 40% 60% 80% 100%


Source: MarketingSherpa + Intermarket Group, 7/2002

Vertical Response recently analyzed several hundred thousand email


campaigns that it had delivered for its customers and found that an average
unsubscribe or opt-out rate between 0.2% and 0.75% is reasonable for lists that
are mailed at least once per month. For lists that are mailed less frequently, the
unsubscribe rate can be expected to increase to 2-5%, according to the
company.

4.15 Average Opt-Out Rates (2002)


As a percent of email messages sent

Frequently Mailed
0.20 - 0.75%
Lists

Infrequently Mailed
2.0 - 5.0%
Lists

0% 1% 2% 3% 4% 5%
Source: Vertical Response, 3/2002

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Lack of relevancy or uninteresting content is the number one reason


subscribers opt-out of email lists, according to Ipsos-Reid. Seventy-one percent
of Internet users surveyed by the company have unsubscribed from at least one
email list because the information delivered was not sufficiently interesting or
relevant.
Yesmail recently analyzed 90+ million emails that it sent during Q1-2002 and
found that the use of personalization in messages can significantly decrease opt-
out rates. As a baseline, email that employed no targeting or
personalization generated an average opt-out rate of 0.7%. As the level of
personalization -- and by extension, relevancy to the recipient -- increased, the
opt-out rate declined steadily; emails that employed up to 8 data elements, such
as name, age, gender, interests and purchase history generated opt-out rates
that were less than one-third the level for messages that were not targeted.

4.16 Effect Of Personalization On Opt-Out Rates (2002)


As a percent of email messages sent

1.00%

0.80% 0.70%

0.60% 0.50% 0.50%


0.40%
0.40%
0.20%
0.20%

0.00%
No Targeting Or

1 To 2 Data

3 To 4 Data

5 To 6 Data

7 To 8 Data
Personalization

Elements

Elements

Elements

Elements
Source: Yesmail, Inc., 7/2002

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MarketingSherpa's Email Marketing Metrics Guide

Section V.
Email Marketing To House
Lists

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MarketingSherpa's Email Marketing Metrics Guide

The overwhelming majority (86%) of marketers we surveyed have developed


one or more house lists which include email addresses. Among consumer
marketers, the share increases to 91% and it dips slightly to 84% among B-to-B
marketers.
A Q1-2002 survey by DoubleClick found that 80% of respondents are
developing one or more email lists. Seventy-nine percent of these lists are used
at least in part for direct sales and 74% are used in customer retention efforts.
Most of the marketers surveyed by DoubleClick employ third-party lists for
customer acquisition.

5.01 How Many Marketers Have House Email Lists


As a percent of survey respondents

100%

91.20%
80% 83.80% 86.90%

60%

40%

20%

0%
B-to-C Marketers B-to-B Marketers Mixed Audience
Marketers
Source: MarketingSherpa + Intermarket Group, 7/2002

5.02 Marketers Publishing Email Newsletters And Sales Alerts


As a percent of survey respondents; more than one response allowed

Publish Email Newsletter Publish Email Alerts

86.4%
Mixed Audience
Marketers
83.2%

81.3%
B-to-B Marketers
81.2%

84.8%
B-to-C Marketers
84.0%

0% 20% 40% 60% 80% 100%

Source: MarketingSherpa + Intermarket Group, 7/2002

A similarly high percentage of survey respondents also published their own


email newsletter (79%) or email alerts (78%). Two-thirds publish both a

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MarketingSherpa's Email Marketing Metrics Guide

newsletter and periodic alerts. It appears that marketers who target a mixed
audience -- both businesses and consumers -- are the most likely to use their opt-
in list for ongoing communication with customers, inasmuch as 99% of them who
have an opt-in list also publish an email newsletter or email alerts compared to
92% of consumer marketers.
Email newsletters and periodic email alerts are equally popular among
marketers, regardless of the target audience. No more than 2% of survey
respondents -- and less than 1% of consumer marketers -- indicated any plans to
decrease their use of either during the remainder of 2002. Conversely,
approximately two-thirds of respondents indicated that they plan to increase their
use of one or both types of email.

5.03 Marketers’ Plans For Their Use Of Email Newsletters


As a percent of survey respondents

Plan To Increase Use Use At About The Same Level


Plan To Decrease Use
100%

80%
63.7% 65.3% 66.2%

60%

40% 35.9% 33.0% 33.1%

20%
0.4% 1.6% 0.6%
0%
B-to-C Marketers B-to-B Marketers Mixed Audience
Marketers
Source: MarketingSherpa + Intermarket Group, 7/2002

5.04 Marketers’ Plans For Their Use Of Email Sales Alerts


As a percent of survey respondents

Plan To Increase Use Use At About The Same Level


Plan To Decrease Use
100%

80%
67.9%
62.7% 63.9%
60%

37.0% 35.0%
40% 31.2%

20%
0.4% 1.1% 0.9%
0%
B-to-C Marketers B-to-B Marketers Mixed Audience
Marketers
Source: MarketingSherpa + Intermarket Group, 7/2002

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5.05 Frequency Of Mailings To House Lists


As a percent of survey respondents

MarketingSherpa + Intermarket Group AIM/Return Path

10%
Daily
4%

14%
Weekly
15%

18%
Bi-weekly
19%

32%
Monthly
37%

22%
Quarterly
21%

0% 10% 20% 30% 40% 50% 60%


Source: As noted, 2002

5.06 Frequency Of Mailings To House Lists Among Consumer


Marketers
As a percent of survey respondents

50%

40%
33.0%
30%
24.6%
20.6%
20%

10.0%
10% 5.6% 6.2%

0%
Daily Several Weekly Every Two Monthly Quarterly
Times Per Weeks/Twice
Week A Month
Source: MarketingSherpa + Intermarket Group, 7/2002

The largest number of marketers mail to their house opt-in lists once per
month, according to both our own survey and data from Return Path. As the
frequency of mailings increases, the number of marketers declines and only 4%
of survey respondents send daily emails to any of their house lists.
Consumer marketers are the most likely to mail to their house lists often, with
almost one-third (32%) of respondents sending email either once per week or
more frequently. Only one-in-ten mail to their house lists quarterly.

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Less than one-in-five (19%) of the B-to-B marketers surveyed send as many
messages to their house lists as consumer marketers. Twenty-five percent send
email only once per quarter -- which is 2-1/2 times higher than among consumer
marketers -- and almost two-thirds (64%) mail to their house lists either monthly
or quarterly.

5.07 Frequency Of Mailings To House Lists Among B-to-B Marketers


As a percent of survey respondents

50%

39.1%
40%

30% 25.1%

20% 17.0%
11.3%
10%
3.7% 3.7%

0%
Daily Several Weekly Every Two Monthly Quarterly
Times Per Weeks/Twice
Week A Month
Source: MarketingSherpa + Intermarket Group, 7/2002

5.08 Frequency Of Mailings To House Lists Among Mixed Audience


Marketers
As a percent of survey respondents

50%

40% 36.2%

30%

19.2% 19.7%
20% 17.3%

10%
4.1% 3.5%

0%
Daily Several Weekly Every Two Monthly Quarterly
Times Per Weeks/Twice
Week A Month
Source: MarketingSherpa + Intermarket Group, 7/2002

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Most marketers in the survey report that their open rates for mailings to house lists
have changed little or not at all during the past 12 months. Among companies targeting
business customers, one-in-four actually reported a significant increase in their open rate
as did 18% of consumer focused marketers. Consumer marketers are also, however,
almost twice as likely as the B-to-B marketers to report a significant decline in open rates
(13.5% vs. 7.7%).

5.09 Open Rate Trend For House Lists


As a percent of survey respondents

B-to-C Marketers B-to-B Marketers Mixed Audience Marketers

100%

80%
68.1% 67.3% 70.8%

60%

40%
25.1%
18.4% 20.8%
20% 13.5%
7.7% 8.3%

0%
Increased Significantly Little To No Change Decreased
Significantly

Source: MarketingSherpa + Intermarket Group, 7/2002

Open rates among one-in-five of the marketers surveyed


have actually increased during the past 12 months

Click-through rates for house lists have increased significantly


among 26% of marketers in the past 12 months

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MarketingSherpa's Email Marketing Metrics Guide

Survey respondents that send email alerts to their house lists indicated
somewhat more frequently than respondents with email newsletters that their
open rates have changed little during the past 12 months. Email newsletters
were, however, more likely to have experienced a significant increase in open
rates (19% vs. 15% for email alerts).

5.10 Open Rate Trend For Newsletters vs. Sales Alerts


As a percent of survey respondents

Increased Significantly Little To No Change


Decreased Significantly

3.3%

Email Alerts 81.7%

15.0%

4.3%

Email Newsletters 77.1%

18.6%

0% 20% 40% 60% 80% 100%

Source: MarketingSherpa + Intermarket Group, 7/2002

5.11 Open Rate Trend By List Type


As a percent of survey respondents for each list type

Increased Significantly Little To No Change Decreased Significantly


100%

80%
70.3% 70.4% 69.4%

60%

40%

20.8% 22.4% 21.6%


20%
8.9% 7.2% 9.0%

0%
Single Opt-In List Double Opt-In List Opt-Out List
Source: MarketingSherpa + Intermarket Group, 7/2002
There was almost no difference in the open rate trend among survey
respondents based on the opt-in method used. For each of the different list types
used -- single opt-in, double opt-in and opt-out -- approximately 70% of
respondents reported little to no change in their open rates over the past year. A

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MarketingSherpa's Email Marketing Metrics Guide

small difference was apparent among marketers that employ double opt-in, with
the number who reported increased open rates slightly higher than the mean
while the number that reported a decline in open rates was slightly lower than the
mean.
The impact of mailing frequency on open rates for the last 12 months appears
to be limited. Marketers that mail to their house lists bi-weekly or more frequently
are more likely to report declines in open rates compared to respondents that
mailed monthly or quarterly. Approximately one-in-four survey respondents for
most mailing frequencies, however, have seen a significant increase in their open
rates during the past year. Respondents that send their house list mailings
quarterly are the least likely to report any significant change in open rates -- either
increases or decreases -- with 81% reporting they’ve seen little or no change.

5.12 Open Rate Trend By Frequency Of Mailing


As a percent of survey respondents for each delivery frequency

Increased Significantly Little To No Change


Decreased Significantly

13.9%
Daily 63.9%
22.2%

8.8%
Weekly 68.1%
23.0%

10.4%
Bi-weekly 65.3%
24.3%

6.6%
Monthly 68.2%
25.2%

8.6%
Quarterly 80.6%
10.8%

0% 20% 40% 60% 80% 100%


Source: MarketingSherpa + Intermarket Group, 7/2002

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HOW LIST FATIGUE 5.13 Average Open Rate For House Lists
IMPACTS OPEN AND As a percent of survey respondents
CLICK RATES
B-to-C Marketers B-to-B Marketers
NetLine develops
Internet-based communi- Mixed Audience Marketers
cation and marketing
programs for B-to-B 6.9%
marketers. The company < 10% 7.0%
also publishes a free
6.0%
email newsletter,
INSPIRE, that it sends to
6.3%
opt-in subscribers every
month. 10 - 19% 5.7%
When Raechelle 7.3%
Drivon, NetLine's
Marketing V.P., sent out 8.2%
a recent edition of
20 - 29% 7.3%
INSPIRE, it was about
one week after the 14.0%
company had ended an
email marketing 7.5%
campaign which included 30 - 39% 8.9%
an option for prospects to
12.7%
sign-up for the free email
newsletter. She says, “I
10.1%
tracked [the new names
gathered from the 40 - 49% 7.0%
campaign] as a separate 16.7%
panel to see how they
responded compared to 16.4%
how my regular
50 - 59% 15.8%
newsletter group did, and
they responded huge.” 14.7%
Drivon continues, “The
open rate for my regulars 44.7%
stayed about what it 60%+ 48.4%
usually is: 35%. The
28.7%
open rate for the new
audience who signed up
just a week before was 0% 20% 40% 60% 80%
53%! My click-through
Source: MarketingSherpa + Intermarket Group, 7/2002
rate on my regular
audience was about
Open rates vary widely and can be influenced by a variety of factors, including
average: 6.39%; it
usually measures
list source, time and day of delivery, subject line and “From Label.” Marketers
between 6% and 8.5%. sending well executed, targeted mailings to house lists should generally expect
The click-through rate on open rates in the range of 40-60%, according to data from Vertical Response
the leads group was based on an analysis of several hundred thousand campaigns sent by its clients.
17.5%!” Among the marketers that we surveyed, respondents that target consumers
generally achieved the lowest open rates; more than one-half (57%) reported
Read the full case study at: overall average open rates of less than 50%. Respondents targeting business
http://www.marketingsherpa customers reported the highest open rates, with almost two-thirds (64%) claiming
.com/sample.cfm?contentID
=2105
an overall average open rate of 50% or higher.

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HOW LIST FATIGUE 5.14 Average Open Rate For House Lists By List Type
IMPACTS OPEN AND As a percent of survey respondents
CLICK RATES
Part II
Single Opt-In List Double Opt-In List Opt-Out List
Rich Ord founded iEntry
7.7%
in January 1999,
launching a handful of < 10% 5.7%
email newsletters that 6.4%
first year starting with
7.0%
'WebProNews', which is
10 - 19% 4.3%
still his flagship
publication. Today, the 6.4%
company runs 55 7.0%
branded Web sites for its
20 - 29% 6.4%
newsletters and sends out
50 million emails a 13.6%
month to opt-in 8.5%
subscribers.
30 - 39% 10.7%
Over the last few
years, Ord has discovered 9.7%
that subscription life 9.2%
cycle is a critical factor
40 - 49% 9.3%
in the open rates for his
9.7%
company’s email
newsletters. “If they 16.2%
subscribed within the 50 - 59% 11.4%
past three months, they
16.9%
open at 85%-90%. If
they're two years old, on 44.3%
average they could be 60%+ 52.1%
down to a 15% open rate
37.3%
unless you really revamp
content and find new
0% 10% 20% 30% 40% 50% 60%
reasons to make them
open,” explains Ord. Source: MarketingSherpa + Intermarket Group, 7/2002
Therefore circulation
marketing plays a critical Survey respondents that employ double opt-in generally experienced higher
role in keeping open rates than marketers using single opt-in and opt-out lists; almost three-in-
advertisers happy by four (73%) reported overall open rates of 40% or higher and more than one-half
supplying fresh names (52%) reported rates of 60% or higher. Conversely, only 10% reported open
that open well and click rates of less than 20%.
often. Surprisingly, mailers using opt-out house lists were more likely than
Read the full case study at:
respondents with single opt-in lists to report open rates of 50% or higher. This
http://www.marketingsherpa result may be explained at least in part by the disproportionately large number of
.com/sample.cfm?contentID B-to-B marketers who use opt-out lists -- 45% compared to only 23% of
=1866 consumer marketers -- combined with the higher overall average open rates
reported by B-to-B marketers.

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5.15 Open Rates For House Lists From Select MarketingSherpa


Case Studies

Open
Marketer Sector Year Principal Goal Rate
Maximize click-through rate for
BetterGolf.com Media 2000 their email newsletter advertisers 50-60%
Business Email newsletter produced to
Franklin Covey Services 2001 generate sales leads 80-85%
Technology Maximize click-through rate for
iEntry (1) Media 2001 their email newsletter advertisers 85-95%
Generate sales lead (via email to
Century 21 Real Estate 2002 other Century 21 agents) 30%
Technology Maximize click-through rate for
TechTarget Media 2002 their email newsletter advertisers 80%
Support company’s independent
Marsh-McBirney Mfg. 2002 sales reps. 60%
BD's Mongolian
Barbeque Restaurant 2002 Drive offline traffic 60-65%
Time-Life Publishing 2002 Generate direct sales 40-50%
Business Email newsletter produced to
NetLine Services 2002 generate sales leads 35%
(1) Opt-in subscribers 3-months old or less have 85-90% open rates; rates decline with age to as low
as 15%. Source: MarketingSherpa Inc.

The trends in overall click-through rates experienced by survey respondents during


the last 12 months parallels the trends in open rates. More than 60% of respondents
report that their click-through rates have changed little and approximately one-in-four
have seen a significant increase in click-through rates. Consumer marketers are the
most likely to have experienced a decrease, with 15% reporting a decline in click-through
rates compared to only 8% of B-to-B marketers.
For the previous 12-month period between 2000 and 2001, Jupiter Media Metrix
estimates that the average click-through rate for customer retention email campaigns
declined by 20% -- from 10% to 8%.

5.16 Click-Through Rate Trend For House Lists


As a percent of survey respondents

B-to-C Marketers B-to-B Marketers Mixed Audience Marketers


100%

80%
65.9%
61.6% 64.6%
60%

40%
27.8% 25.3%
23.7%
20% 14.7%
7.6% 8.8%

0%
Increased Significantly Little To No Change Decreased
Significantly

Source: MarketingSherpa + Intermarket Group, 7/2002

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Few of the marketers surveyed (approximately 7%) report any decline in click-
through rates from their email newsletters or email alerts over the last 12 months.
Among respondents publishing periodic alerts, however, 29% did report a
significant increase in their click-through rates compared to 17% for email
newsletters.

5.17 Click-Through Rate Trend For Newsletters vs. Sales Alerts


As a percent of survey respondents

Increased Significantly Little To No Change


Decreased Significantly

6.8%

Email Alerts 64.4%

28.8%

7.0%

Email Newsletters 76.1%

16.9%

0% 20% 40% 60% 80% 100%

Source: MarketingSherpa + Intermarket Group, 7/2002

5.18 Click-Through Rate Trend By List Type


As a percent of survey respondents

Increased Significantly Little To No Change Decreased Significantly


100%

80%
64.3% 67.4%
62.3%
60%

40%
26.0% 26.8% 26.8%

20% 11.8% 8.9% 5.8%


0%
Single Opt-In List Double Opt-In List Opt-Out List

Source: MarketingSherpa + Intermarket Group, 7/2002

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The majority of survey respondents reported little to no change in the overall


average click-through rate for their house lists during the past 12 months,
regardless of how frequently they mailed to them.
Marketers that mail to their house lists quarterly are the most likely to report
little change in click-through rates. Conversely, lists that are mailed bi-weekly are
the least likely to have experienced little to no change. More than one-third (35%)
of respondents that mail bi-weekly reported their click-through rates had
increased significantly over the past 12 months; interestingly, they are also the
most likely to report a decline in click-through rates (along with marketers that
mail weekly) for the same period.

5.19 Click-Through Rate Trend By Frequency Of Mailing


As a percent of survey respondents

Increased Significantly Little To No Change


Decreased Significantly

7.7%
Daily 69.2%
23.1%

12.4%
Weekly 60.3%
27.3%

11.2%
Bi-weekly 53.4%
35.4%

6.9%
Monthly 68.6%
24.5%

8.9%
Quarterly 77.8%
13.3%

0% 20% 40% 60% 80% 100%

Source: MarketingSherpa + Intermarket Group, 7/2002

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5.20 Average Click-Through Rate For House Lists


As a percent of survey respondents

B-to-C Marketers B-to-B Marketers


Mixed Audience Marketers

13.4%
< 3% 11.2%
11.4%

4.7%
3 - 4% 10.4%
14.1%

22.0%
5 - 8% 15.4%
20.8%

9.4%
9 - 12% 12.7%
14.1%

8.7%
13 - 16% 7.3%
6.7%

8.7%
17 - 20% 10.0%
5.4%

3.1%
21 - 24% 0.8%
1.3%

6.3%
25 - 29% 5.0%
6.0%

22.8%
30%+ 27.3%
20.1%

0% 10% 20% 30% 40% 50%

Source: MarketingSherpa + Intermarket Group, 7/2002


The majority of survey respondents reported that the overall average click-
through rate for their house lists was 12% or less. The largest proportion (27%)
of B-to-B marketers reported average click-through rates of 30% or higher
followed by respondents with a 5-8% click-through rate (15% of B-to-B
marketers). Among consumer marketers, the largest number (21%) reported a
5-8% average click-through rate and another 20% reported a 30%+ click-through
rate.

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5.21 Average Click-Through Rate For House Lists By List Type


As a percent of survey respondents

Single Opt-In List Double Opt-In List Opt-Out List

14.90%
< 3% 7.1%
13.3%

11.90%
3 - 4% 10.3%
6.4%

17.8%
5 - 8% 11.9%
21.1%

13.9%
9 - 12% 13.5%
12.8%

6.9%
13 - 16% 10.3%
6.9%

10.9%
17 - 20% 6.3%
8.7%

1.0%
21 - 24% 2.4%
0.9%

3.0%
25 - 29% 5.6%
7.3%

19.8%
30%+ 32.5%
22.5%

0% 10% 20% 30% 40% 50%

Source: MarketingSherpa + Intermarket Group, 7/2002


The specific opt-in method employed by marketers in developing their house
email lists appears to impact click-through rates, according to survey
respondents. Thirty-eight percent of marketers that employ double opt-in
reported click-through rates of 25% or more, compared to 30% for single opt-in
and 22% for opt-out. Among those respondents that reported click-through rates
of 5% or less, more than one-in-four (27%) employed opt-out lists compared to
20% for single opt-in and 17% for double opt-in.

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5.22 Click-Through Rates For House Lists From Select


MarketingSherpa Case Studies

Click
Marketer Sector Year Principal Goal Rate
AlwaysInStyle.com (1) Retail 2000 Generate direct sales 67%
AlwaysInStyle.com (1) Retail 2000 Generate direct sales 20%
Seth Godin Publishing 2000 Generate eBook downloads 33%
LivePerson.com Technology 2000 Generate sales leads 20%
Motorola Telecom 2001 Generate direct sales 5.4%
IBM (2) Technology 2000 Generate sales leads 12%
IBM (3) Technology 2000 Generate sales leads 25%
Generate website and drive in-
Drexel Heritage (4) Retail 2000 store traffic 24%
eBags Retail 2001 Generate direct sales 8%
PaperExchange Internet 2001 Generate repeat website traffic 15%
Consumer Email newsletter produced to
SoBe Beverages Products 2001 generate repeat website traffic 25%
Generate article downloads and
Chutney Technologies Technology 2001 sales leads 25%
Generate sales leads by offering
Chutney Technologies Technology 2001 free conference call with CEO 20%
Flash email newsletters produced
to generate direct sales and
CinemaNow Internet 2001 repeat website traffic 43%
Business
eMagine Services 2001 Generate sales leads 25%
Financial Email newsletter produced to
GRX Technologies (6) Technology 2001 generate sales leads 40%
Generate direct sales and repeat
Overstock.com Retail 2001 website traffic 5%
Business
Element K Services 2002 Generate direct sales/upsell 3%
Generate sales lead (via email to
Century 21 Real Estate 2002 other Century 21 agents) 10%
Business Email newsletter produced to
NetLine Services 2002 generate sales leads 6 - 8.5%

(1) Personalized email promotions were sent to partner Hanover’s Silhouettes catalog customers;
(2) 12% click-through on personalized invitation to view Flash video eCard; 85% of recipients who
opened card clicked on to website; (3) 25% click-through on personalized invitation to view Flash
holiday eCard; 10% or recipients who opened card clicked on to response form; (4) Text email with
rich media eBrochure attached; (5) Percent of recipients who click-through to read full-text stories on
website. Source: MarketingSherpa Inc.

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Bounce rates can vary significantly, based on a variety of factors. First-time


mailings to a new email list can generate bounce rates as high as 20-30%,
according to Vertical Response. The company estimates that lists which are
mailed regularly -- twice a month or more -- should experience bounce rates of
between 2-4% while lists mailed only monthly can generate bounce rates from
5% up to 13%.
Data from both DoubleClick and Experian also indicate that average bounce
rates vary from industry to industry. Experian estimates the average bounce rate
among catalog companies is 12% (DoubleClick estimates only 7%) while the rate
drops to 5% among retailers and 2% among mailers in the financial services and
the publishing industries.

5.23 Average Bounce Rates (2002)


As a percent of total messages sent

Experion 2 - 12%

Vertical Response
2 - 4%
(2)

Vertical Response
5 - 13%
(1)

DoubleClick 9.4%

0% 3% 6% 9% 12% 15%
Source: As noted, 2002
(1) Lists mailed at least tw ice monthly
(2) Lists mailed appx. once a month

5.24 Average Bounce Rates By Industry (2002)


As a percent of total messages sent

Brand 15.0%

Catalog 7.8%

Entertainment 8.9%

Hospitality 7.6%

Retail 9.9%

B-to-B 18.4%

Financial Services 7.9%

0% 5% 10% 15% 20% 25%

Source: DoubleClick, Q1-2002

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5.25 Email List Hygiene Trends Among Consumer Marketers


As a percent of survey respondents

Bounce Rate/Undeliverables Opt-Out Rate Spam Complaints


100%
79.9% 76.5%
80%
64.2%
60%

40%
21.1%
20% 14.7%
8.9% 11.8% 11.2% 11.8%

0%
Increased Significantly Little To No Change Decreased
Significantly

Source: MarketingSherpa + Intermarket Group, 7/2002

5.26 Email List Hygiene Trends Among B-to-B Marketers


As a percent of survey respondents

Bounce Rate/Undeliverables Opt-Out Rate Spam Complaints


100%
80.3%
80% 73.9%
63.1%
60%

40%
19.1% 17.7%
20% 14.1% 16.7%
9.4%
5.6%
0%
Increased Significantly Little To No Change Decreased
Significantly
Source: MarketingSherpa + Intermarket Group, 7/2002

The majority of all survey respondents reported little to no change among the
various list hygiene-related metrics during the past 12 months.
Approximately one-fifth of respondents, however, reported a significant
increase in bounce rates for their house lists and another 17% reported a
significant decrease; B-to-B marketers (see 5.26) were more likely than
consumer marketers (see 5.25) to have experienced a decline in bounce rates.
Companies targeting businesses were also more likely to report a decline in
spam-related complaints while companies targeting consumers were more likely
to experience an increase in opt-out rates.

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5.27 Email List Hygiene Trends Among Mixed Audience Marketers


As a percent of survey respondents

Bounce Rate/Undeliverables Opt-Out Rate Spam Complaints


100%

80% 73.9% 74.0%


60.0%
60%

40%
21.4% 18.6% 16.6%
20% 14.8%
9.5% 11.2%

0%
Increased Significantly Little To No Change Decreased
Significantly
Source: MarketingSherpa + Intermarket Group, 7/2002

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Section VI.
Third Party Email Lists and
Newsletter Sponsorships

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Rented and other third-party email lists are used by a slim majority of
consumer marketers, but less than one-half of the B-to-B marketers surveyed. A
similar Q-1 2002 survey by DoubleClick found that 57% of respondents use third-
party opt-in lists and 49% use “other companies’ lists.” Most of the companies
surveyed by DoubleClick employ third-party lists for customer acquisition while
their house lists are used primarily for direct sales and customer retention efforts.
Approximately 90% of our survey respondents plan to continue using third-
party lists at either the same level or at an increased level through the rest of
2002. Only 11% of consumer marketers and 8% of B-to-B marketers plan to
decrease their use of rented and third-party lists.

6.01 How Many Marketers Use Third Party Email Lists


As a percent of survey respondents

100%

80%

60% 54.8% 54.5%


47.0%

40%

20%

0%
B-to-C Marketers B-to-B Marketers Mixed Audience
Marketers
Source: MarketingSherpa + Intermarket Group, 7/2002

6.02 Trends In The Use Of Third Party Email Lists


As a percent of survey respondents

Plan To Increase Use Use At About The Same Level


Plan To Decrease Use
100%

80%
61.2% 61.5%
57.4%
60%

40% 31.7% 30.6% 28.3%

20% 10.9% 10.2%


8.2%

0%
B-to-C Marketers B-to-B Marketers Mixed Audience
Marketers

Source: MarketingSherpa + Intermarket Group, 7/2002

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Although the majority of survey respondents report little to no change in


overall open rates for email campaigns using third-party lists, almost as many
marketers report that their open rates have declined significantly during the past
12 months. Open rates among B-to-B marketers have been impacted the least,
with 29% reporting a significant decline -- and 11% actually reporting a significant
increase -- while 42% of respondents that target consumers have experienced a
decline in open rates.
In contrast, only 9% of marketers report a similar decline in open rates for their
house lists and more than one-in-five indicate that their open rates have actually
increased since last year.

6.03 Open Rate Trend For Third Party Lists


As a percent of survey respondents

B-to-C Marketers B-to-B Marketers Mixed Audience Marketers


100%

80%
60.0%
60% 49.5% 51.6%
41.8% 42.9%
40%
29.4%

20%
8.8% 10.6% 5.5%

0%
Increased Significantly Little To No Change Decreased
Significantly
Source: MarketingSherpa + Intermarket Group, 7/2002

Thirty-six percent of marketers report that open rates for


third-party lists have declined compared to 9% for house lists.

Thirty-seven percent report that click-through rates for


third-party lists have declined compared to 10% for house lists

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6.04 Average Open Rate For Third Party Lists


As a percent of survey respondents

B-to-C Marketers B-to-B Marketers


Mixed Audience Marketers

29.2%
< 10% 29.7%
29.5%

16.9%
10 - 19% 16.1%
19.7%

20.0%
20 - 29% 16.9%
26.2%

16.9%
30 - 39% 9.3%
9.8%

6.2%
40 - 49% 16.1%
8.2%

0.0%
50 - 59% 5.1%
4.9%

10.8%
60%+ 6.8%
1.6%

0% 10% 20% 30% 40% 50%

Source: MarketingSherpa + Intermarket Group, 7/2002


Marketers sending well-executed, targeted email campaigns to opt-in third-
party lists should generally expect open rates in the range of 20-30%, according
to a recent analysis by Vertical Response that examined the results from several
hundred thousand campaigns sent by its clients.
Approximately two-thirds of the marketers we surveyed reported that they
experienced an overall average open rate of less than 30% when using third-party
lists and 29% reported open rates of less than 10%. B-to-B marketers generally
achieved the highest open rates, with 37% reporting rates of 30% or higher
compared to 24% of consumer marketers.

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6.05 Open Rates For Third Party Lists From Select MarketingSherpa
Case Studies

Open
Marketer Sector Year Principal Goal Rate
Business Sign-up new customers to 90-day
netgenShopper Services 2000 free trial 40%
Business Increase website traffic and opt-in
Office.com Services 2000 newsletter subscribers 72%
Farmbid.com Agriculture 2000 Acquire registered users 15-20%
Generate white paper downloads
RioLabs Technology 2001 and sales leads 24%
Generate white paper downloads 2.7 -
Seattle Lab Technology 2001 and sales leads 2.9%
Dallas Area Rapid Publicize community event and
Transit Government 2002 generate new opt-in subscribers 83%
MarketingPilot Technology 2002 Generate sales leads 52%
Avenet - Hallmark Div. Technology 2002 Generate sales leads 9%
Business Generate white paper downloads
NetLine Services 2002 and sales leads 37%
Source: MarketingSherpa Inc.

The trend in overall click-through rates for third-party and rented lists tracks
very closely with the trend in open rates. Thirty-seven percent of survey
respondents have experienced a significant decline in their click-through rates
during the last 12 months -- compared to 36% for open rates -- and 9% reported
increases in both their open and click-through rates. Among B-to-B marketers
only, approximately 10% more respondents reported a significant decline in their
click-through rates than did so for open rates.

6.06 Click-Through Rate Trend For Third Party Lists


As a percent of survey respondents

B-to-C Marketers B-to-B Marketers Mixed Audience Marketers


100%

80%

56.6%
60% 51.5%
48.6%
41.9% 41.2%
40% 32.9%

20%
9.5% 10.4% 7.2%

0%
Increased Significantly Little To No Change Decreased
Significantly

Source: MarketingSherpa + Intermarket Group, 7/2002

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6.07 Average Click-Through Rate Comparison For Opt-In


Email (2002)
As a percent of email messages sent

Jupiter Media
8.00%
Metrix (Retention)

GartnerG2 6 - 8%

DoubleClick 6.95%

Jupiter Media
5.00%
Metrix (Acquisition)

Vertical Response 3 - 5%

Opt-In News 3.00%

0% 3% 6% 9% 12% 15%
Source: As noted; Jupiter estimates
10/2001, all other estimates from 2002

Estimates of average click-through rates for opt-in email campaigns vary


widely between sources, which is due at least in part to the combining of results
from mailings to house lists with results for third-party lists. Click-through rates
also vary between customer acquisition-oriented emails and retention-focused
messages.
Jupiter Media Metrix estimates the average click-through rate for customer
acquisition-oriented emails at 5%, or approximately 40% lower than the average
for customer retention mailings (8%). Between 2000 and 2001, click-through
rates for acquisition-oriented campaigns declined by 30%, from an average of 7%
to 5%, according to Jupiter.

6.08 Click-Through And Conversion Rates For Customer Acquisition


vs. Retention (2001)
As a percent of email messages sent

Average Click-Through Rate Average Conversion Rate

2%
Customer
Acquisition
5%

3%
Customer
Retention
8%

0% 2% 4% 6% 8% 10%

Source: Jupiter Media Metrix, 10/2001

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DoubleClick estimates that the overall average click-through rate between Q1-
2001 and Q1-2002 was 6.95% (8.03% among marketers and 5.23% among
publishers).
The analysis by Vertical Response of its clients’ email campaigns found that a
click-through rate of 3-5% is a reasonable expectation for a well executed effort.
Individual links embedded within the message can be expected to achieve click-
through rates of 0.5% to 1.5%, according to the company.
At the low end of the estimates, a Q1-2002 survey of mailers by Opt-In News
found that a majority (59%) of respondents achieve an average click-through rate
of 3% or less.
The majority (56%) of our own survey respondents report that their overall
average click-through rate for third-party lists is 4% or less. Three-in-four
respondents claimed average click-through rates of 8% or less. The largest
proportion of marketers (44% of respondents) reported click-through rates of less
than 3% followed by marketers with rates of 5-8% (19% of respondents).

6.09 Average Click-Through Rate For Third Party Lists


As a percent of survey respondents

< 3% 44.3%

3 - 4% 11.8%

5 - 8% 19.0%

9 - 12% 8.4%

13 - 16% 3.0%

17 - 20% 4.6%

21 - 24% 0.4%

25 - 29% 2.1%

30%+ 6.3%

0% 10% 20% 30% 40% 50% 60%

Source: MarketingSherpa + Intermarket Group, 7/2002

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Since January 2001, click-through rates among marketers have fluctuated


from quarter to quarter between 9.7% and 5.4%, according to DoubleClick. The
average click-through rate among marketers during the first-quarter of 2002 was
8% -- which was up from 6.8% the previous quarter -- and 5.2% among
publishers.

6.10 Average Click-Through Rate For Opt-In Email (2001-2002)


As a percent of email messages sent

Marketer Publisher
15%
9.73%
12%

8.03%
7.60%

7.46%
6.92%

6.75%
9%
6.20%

5.23%
5.40%

4.52%
6%

3%

0%
Q1-2001 Q2-2001 Q3-2001 Q4-2001 Q1-2002

Source: DoubleClick, 5/2002

6.11 Click-Through Rates For Third Party Lists From Select


MarketingSherpa Case Studies

Click
Marketer Sector Year Principal Goal Rate
Business
Aquent Services 2000 Respondents submit resume 3.4%
Financial
LowerMyBills.com (1) Services 2000 Acquire new customers 4-5%
LivePerson.com Technology 2000 Generate sales leads 15%
Charrette.com Technology 2000 Generate sales leads 8%
Business
TotaliNet Services 2000 Generate sales leads 4%
Business
Sento Corp. Services 2000 Generate sales leads 3-5%
NASA Government 2001 Generate business partner leads 9%
Generate white paper downloads
RioLabs Technology 2001 and sales leads 2.4%
Business
Sento Corp. Services 2001 Generate sales leads 10-12%

Corporate Apparel Business Generate sales leads and direct


Unlimited Services 2001 sales 5%
MarketingPilot Technology 2002 Generate sales leads 3.6%
Business
Element K Services 2002 Generate sales leads 10-14%
Avenet - Hallmark Div. Technology 2002 Generate sales leads 4%
Business Generate white paper downloads
NetLine Services 2002 and sales leads 8%

(1) Company reported click-through rates of up to 8-9% in solo mailings using Yesmail and MyPoints.
Source: MarketingSherpa Inc.

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6.12 Average Click-Through Rate For Opt-In Email (2002)


As a percent of survey respondents

50%

40%
31%
30%
25%
19%
20%
15%

9%
10%

0%
< 5% 5 - 10% 10 - 20% > 20% Don't Track

Source: e-Dialog, 4/2002

6.13 Average Click-Through Rate By Industry (2002)


As a percent of email messages sent

Brand 16.2%

Catalog 9.5%

Entertainment 6.2%

Hospitality 4.4%

Retail 9.1%

B-to-B 4.6%

Financial Services 6.0%

0% 5% 10% 15% 20%

Source: DoubleClick, Q1-2002

As mentioned previously, DoubleClick estimates that the overall average click-


through rate between Q1-2001 and Q1-2002 was 6.95%. Brand advertisers
achieved the highest average click-through rate (16.2%), followed by catalogers
at 9.5% and retailers at (9.1%). The lowest click-through rates were among
mailers in the hospitality and B-to-B sectors at 4.4% and 4.6% respectively.

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DoubleClick also reports that marketers generally achieved the highest click-
through rates on permission email early in the week (Sunday through Tuesday).
It should be noted, however, that the vast majority of marketers interviewed by
MarketingSherpa indicate that they achieve the best results from emails sent on
Tuesday, Wednesday and Thursday. One exception to this, according to
Travelocity, is mailings to AOL, which the travel company has found can be sent
on Fridays or as late as Saturday without a dramatic decline in results.
Travelocity has also found that time of delivery effects results, so the company
generally sends its messages between 8:00 AM and noon (based on each
recipient’s local time).

6.14 Average Click-Through Rate By Day Of Week (2002)


As a percent of email messages sent

Marketer Publisher

10.62%
Sunday
7.92%

5.98%
Monday
6.94%

6.02%
Tuesday
7.62%

6.03%
Wednesday
5.60%

5.12%
Thursday
6.20%

7.06%
Friday
6.47%

8.22%
Saturday
6.08%

0% 3% 6% 9% 12% 15%

Source: DoubleClick, Q1-2002

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The Q1-2002 analysis by Yesmail of 90+ million emails it had delivered (see
also 4.16) found that click-through rates generally increased along with the level
of personalization. Messages that employed no personalization generated an
average 4.7% click-through rate while those that leveraged 7 or 8 data elements
in targeting and personalization achieved an average three-fold increase in click-
through at 14.8%. Targeting and personalization can employ a variety of data
elements, according to Yesmail, including name, gender, age, interests, purchase
history, products owned, product usage, and message delivery and content
preferences.

6.15 Click-Through Rate For Personalized Messages (2002)


As a percent of email messages sent

25%

20%

14.8%
15%

10% 7.5% 7.6%


4.7% 4.0%
5%

0%
No Targeting Or

1 To 2 Data

3 To 4 Data

5 To 6 Data

7 To 8 Data
Personalization

Elements

Elements

Elements

Elements
Source: Yesmail, Inc., 7/2002

6.16 Most Effective Methods Of Profiling Email Recipients (2002)


As a percent of survey respondents

B-to-C Campaigns B-to-B Campaigns

33%
Audience Interests
77%

67%
Geography
5%

N/A
Demographics
18%

0% 20% 40% 60% 80% 100%


Source: Opt-In New s, Q1-2002

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Information related to personal interests and activities is the most effective


among the various data elements that can be used to target consumer-oriented
email marketing campaigns, according to 77% of marketers surveyed by Opt-In
News. Among B-to-B marketers, targeting based on geography and
demographics is identified by approximately two-thirds (67%) of respondents as
the most effective tactic.
The ultimate conversion rate for email marketing campaigns is influenced by a
wide variety of factors, including campaign objectives, business sector, price
point, and landing page design and copy, to name just a few. Jupiter Media
Metrix reports that conversion rates also vary between customer acquisition and
retention-focused efforts.
One-half of the marketers surveyed by e-Dialog achieved an overall average
conversion rate of 5% or less from their email campaigns. Jupiter estimates that
the average conversion rate is 2% for customer acquisition campaigns and 3%
for customer retention campaigns.

6.17 Average Conversion Rate For Email Campaigns (2002)


As a percent of survey respondents

60%

50%
40%
40%

30%
24%

20% 17%
10% 9%
10%

0%
< 1% 1 - 5% 5 - 10% > 10% Don't Track

Source: e-Dialog, 4/2002

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Slightly less than one-half (47%) of the marketers that we surveyed employ
email newsletter advertising and sponsorships. Consumer marketers are the
most likely to use this particular tactic while mixed audience marketers are the
least likely.
Among the survey respondents that already use email newsletter
sponsorships, almost two-thirds (65%) of B-to-B marketers plan to increase their
spending on them through the remainder of 2002 and 28% expect to maintain
their spending at the current levels. The majority (54%) of consumer marketers
also plan to increase their use of newsletter sponsorships while 39% intend to
continue at their current spending level. Only 7% of the respondents have any
plans to reduce their use of email newsletter sponsorships.

6.18 How Many Marketers Use Email Newsletter Sponsorships


As a percent of survey respondents

100%

80%

60%
49.7%
45.4% 45.0%
40%

20%

0%
B-to-C Marketers B-to-B Marketers Mixed Audience
Marketers
Source: MarketingSherpa + Intermarket Group, 7/2002

6.19 Trends In The Use Of Email Newsletter Sponsorships


As a percent of survey respondents

Plan To Increase Use Use At About The Same Level


Plan To Decrease Use
100%

80%
65.4% 62.0%
60% 53.5%

39.0%
40% 29.5%
28.4%

20%
7.5% 6.3% 8.4%

0%
B-to-C Marketers B-to-B Marketers Mixed Audience
Marketers
Source: MarketingSherpa + Intermarket Group, 7/2002

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How One Technology Marketer Uses Email Newsletter Sponsorships


To Maximizes His Marketing ROI

Like many technology marketers, Greg Govatos, Vice President of Marketing for
Chutney Technologies, has a complicated product to explain, “We need to educate customers
about a problem they’re probably not even aware of.”
Last year, Govatos committed to a three-point plan to build an opt-in list for Chutney, so
he could educate prospects via e-mail instead of at expensive in-person events the company
had traditionally relied upon.
“In custom e-mail blasts, we have seen HTML draw 2-to-1 better.” He's also found
Thursdays are his best day of the week to send an e-mail campaign out on. “Early in the week,
people are trying to focus on getting ramped up. People have checked out on Friday. On
Thursday they still have focus. It’s the day I typically catch up on e-mail.”
Unlike broadcast campaigns, Govatos has noticed little to no difference between the success
of HTML versus text for newsletter sponsorships. “It doesn’t seem to matter. This may be
because prospects are reading e-mail newsletters for content, not pretty graphics.“
Newsletter sponsorships have also proven to be more cost-effective than renting broadcast
lists. Govatos says, “E-mail blasts work well, but newsletters are better for the money. I
typically pay four times the CPM on the e-mail blast, but I don’t get four times the click
through or four times the opt-in. With the newsletter, I get the exposure even if I don’t get the
click through. I also know how many get to the form, but don’t fill it out. At least half who get
to form fill it out. I end up with about the same absolute number.”
The niche newsletters significantly out-performed more general newsletters, partially
because Govatos made the effort to tailor creative to each vehicle. He explains, “Specialty
content providers did much better. You can align the product with the specific audience – with
very highly targeted content in a specific tech area. It’s much more effective than news-of-the-
day from a big-name magazine. The message can fit in with editorial content being offered –
because I know what that’s going to be on a narrowly targeted newsletter - so we don’t stick
out like an ad.
Although lower ad positions seemed more cost effective than top positions, results showed
the top was worth paying extra for.
Govatos says, “I will fight tooth and nail to get the top position. At minimum, get the table
of contents, which everyone will read. That’s much better than middle or at bottom. We’ve
gotten middle positions a couple of times, and response rates were about half of the top
position, which doesn’t make sense when you’re paying 70% of the top position. I’ll only do
that if there’s a newsletter that’s infrequent, and the top position is sold out, and only until I
can get the top position.”

Read the full case study at: http://www.marketingsherpa.com/sample.cfm?contentID=1962

The trend in click-through rates from email newsletter sponsorships among


survey respondents during the past 12 months lies roughly between the trends for
house email lists and for third-party opt-in lists…not quite as favorable as house
lists and better than third-party lists.
The majority of all respondents reported that their click-through rates have
changed little or not at all since mid-2001. Almost one-in-four (22%) have
experienced a significant decline in results while 17% reported that their click-
through rates have increased significantly over the past year.
Consumer marketers are the most likely to report a deterioration in results and
mixed audience marketers are the least likely to have experienced any significant
change in click-through rates, either up or down.
MarketingSherpa estimates that a click-through rate of 0.5% to 3% is a
reasonable expectation for email newsletter sponsorship ads that are well
targeted and employ effective creative.
The majority (52%) of our survey respondents report that their overall average

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click-through rate for email newsletter sponsorships is less than 3%. The largest
proportion of marketers claimed an average click-through rate of 5% or higher
(34% of respondents) followed by marketers with rates of 2.0-2.9% (18% of
respondents) and rates of 1.0-1.9% (14% of respondents).

6.20 Click Through Rate Trend For Email Newsletter Sponsorships


As a percent of survey respondents

B-to-C Marketers B-to-B Marketers Mixed Audience Marketers


100%

80%
67.7%
58.9% 61.1%
60%

40%
26.7%
21.1%
17.7% 15.6% 16.7%
20% 14.4%

0%
Increased Significantly Little To No Change Decreased
Significantly
Source: MarketingSherpa + Intermarket Group, 7/2002

6.21 Average Click Through Rate For Email Newsletter


Sponsorships
As a percent of survey respondents

< 0.5% 10.7%

0.5 - 0.9% 8.7%

1.0 - 1.9% 14.1%

2.0 - 2.9% 18.1%

3.0 - 3.9% 8.7%

4.0 - 4.9% 6.0%

5.0%+ 33.6%

0% 10% 20% 30% 40% 50%

Source: MarketingSherpa + Intermarket Group, 7/2002

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6.22 Email Newsletter Click-Through Rates From Select


MarketingSherpa Case Studies

Click
Marketer Sector Year Rate Comments
Average click-on-ad range for company’s
Vertical own email newsletter targeting healthcare
HCPro Media 2000 5-10% professionals
Click-rate for direct response text ads was
up to 5%; best performing banner,
Business “ORGASMIC BANNER DESIGN” got a
Lounge Lizard Services 2001 5% 16% response
Click rate is number of readers who click-
through and actually sign-up for free trial;
Cabot Financial Has achieved response as high as 10-
Heritage Media 2001 2-3% 11% from some lists
Newsletters selected based on job-related
demographics (title, company size, etc.);
Business Negotiated for top position whenever
Element K Services 2002 2% possible
Average click-on-ad rate for company’s
own titles; Readers who click on ads tend
Technology to convert into sales leads (by registering
TechTarget Media 2002 1-2% on a landing page) by about 30-50%
Source: MarketingSherpa Inc.

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Appendix
Data Sources And Contact
Information

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The charts, tables, and other data provided in this report are all sourced from published,
publicly-available information produced by the following organizations:

Brightmail Inc. NFO WorldGroup, Inc.


www.brightmail.com www.nfow.com
DoubleClick Inc. Nielsen/NetRatings Inc.
www.doubleclick.com www.netratings.com
e-Dialog Inc. The NPD Group Inc.
www.e-dialog.com www.npd.com
Forrester Research Opt-In News
www.forrester.com www.optinnews.com
The Gallup Organization Pew Research Center
www.gallup.com www.pewinternet.org
Gartner Group, Quris Inc.
Inc./GartnerG2 www.quris.com
www.gartner.com Roper Starch Worldwide Inc.
Harris Interactive Inc. www.roper.com
www.harrisinteractive.com Scarborough Research
Insight Express www.scarborough.com
www.insightexpress.com Taylor Nelson Sofres and
InStat Group/MDR TNS Intersearch
www.instat.com www.tnsofres.com
International Data Corp. UCLA Internet Project
(IDC) www.ccp.ucla.edu
www.idcresearch.com U.S. Census Bureau
Internet Advertising Bureau www.census.gov
(IAB) Valentine Radford, Inc.
www.iab.net www.valrad.com
Ipsos-Reid Corp. Vertical Response, Inc.
www.ipsos-reid.com/ www.verticalresponse.com
Jupiter Media Metrix WebSideStory, Inc.
www.jup.com www.websidestory.com
Mediamark Research The Yankee Group
www.mediamark.com www.yankeegroup.com
MessageLabs Ltd. Yesmail Inc.
www.messagelabs.com www.yesmail.com

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About MarketingSherpa, Inc.


MarketingSherpa, Inc. is a media company publishing useful news, Case
Studies, and best practices data about Internet and integrated marketing for
advertising, marketing and PR professionals.
Our reporters and editors interview dozens of marketing professionals every
month to ask them, "What's really working for you online?" Then we share their
tactics, advice and results with you in our newsletters, special reports and on our
Web site. Yes, 100% of the articles you'll see at MarketingSherpa were written
exclusively for you from us.
Our name "Sherpa" refers to the Sherpas of Nepal who guide climbers up
Mount Everest. We picked it instead of "MarketingGuru" because we're not the
stars here -- you are. We're just your friendly native guides who help make your
tough climb toward marketing greatness a bit easier

MarketingSherpa, Inc. can be found at: www.marketingsherpa.com

About The Intermarket Group LP


The Intermarket Group LP is a San Diego, California-based publisher focused
on reference material about the “business of technology.” The company's
periodic reports and subscription-based continuous information services cover
various aspects of the tech sector, e-commerce, and the Internet and online
services.
Intermarket's customer base is primarily comprised of leading financial
institutions and Global 2,000 corporates as well as a wide variety of technology
companies and "dot coms" involved in both business-to-consumer and business-
to-business markets.
Intermarket's publications and services combine value-added reporting and
analysis with both proprietary and third-party content/data to help organizations
navigate in today's rapidly evolving, technology-centric business environment.

The Intermarket Group can be found at: www.intermarketgroup.com

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