in conjunction with Produced by Email Marketing Insight 2009 A research project into Irish marketers’ use of email www.newsweaver.ie www.mii.ie PAGE 1 Contents Introduction 2 Foreword by Tom Trainor 2 Introduction by Andrew O’Shaughnessy 3 Executive summary 4 About the research 5 Section 1 – Use of email by Irish marketers 8 Importance of email in the marketing strategy 8 What marketers use email for 9 Email systems marketers are using 10 Section 2 – Email targeting and volumes 13 Frequency of email campaigns 13 Email database sizes 14 Use of personalisation in email marketing 15 Section 3 – Email benchmarks 18 Email metrics being tracked 18 Average open rates 19 Average click through rates 20 Section 4 – Email budgets 21 Budgets allocated to email 21 Expected change in expenditure 22 Where email budgets will come from 23 Section 5 - Challenges facing email marketing 24 Future challenges facing email marketing 24 www.newsweaver.ie www.mii.ie PAGE 2 Introduction Foreword by Tom Trainor Welcome to the second edition of Email Marketing Insight, a research project into Irish marketers’ use of email. Last year’s survey gave us many insights in the use of email by Irish marketers. With the seismic changes that have occurred in the Irish economy over the past 12 to 18 months, it was interesting to revisit Irish marketers’ use of email and examine in detail techniques, trends and attitudes towards email marketing in the new economic context. The survey this year was conducted along the same lines as last year with over 500 marketing professionals from varied industries taking part in the research and answering questions on their use of email, the audiences they communicate with, email benchmarks, budgets and their views of the future challenges for email marketing. In the analysis of this year’s survey, comparisons are made with 2008’s results to identify trends and changes in practices in the use of email marketing. There is no doubt that this year’s report will give Irish marketers very valuable information concerning the evolution of email marketing practices in Ireland. Hopefully, it will also give readers both the inspiration and some useful tips on how to take their email marketing to the next level. Wishing you success in your marketing endeavours. Tom Trainor Chief Executive The Marketing Institute www.newsweaver.ie www.mii.ie PAGE 3 Introduction Introduction by Andrew O’Shaughnessy I would like to thank all the participants of this year’s survey who have given some of their time to enlighten the rest of us on the most recent trends and attitudes towards email marketing in Ireland. At Newsweaver, email marketing is very close to our heart and we are delighted to be associated again with this year’s survey in collaboration with the Marketing Institute. Our aim with Email Marketing Insight 2009 is to help raise awareness among Irish marketers of best practice in email marketing and the opportunities it offers them. Just like the telegraph and fax in the past, email has brought to business a new revolution in communication with a recurring theme: “immediacy”. But that’s not all! Email has also given us a cost-effective and highly measurable way of managing our communications. Email marketing has rapidly become a central part of most communication strategies, either to create new customers, deepen relationships with existing customers, drive sales or nurture relationships both inside and outside of organisations. However, while email marketing is relatively simple to implement, it is difficult to execute well. Relevance, anticipation, and timeliness are essential components to any successful email marketing campaign. This year’s survey reveals that email marketers in Ireland are responding to the key challenges of email as they have considerably increased the sophistication of the tools they use to conduct email marketing. Also, there has been an increase in the levels of personalisation and segmentation used. The reward: the improvements in open rates and click-through rates noted in the research and increased market knowledge for the marketer from more detailed reports. A large proportion of respondents in this year’s survey plan to spend more on email marketing over the next 12 months. In the current economic climate, this reflects well on the effectiveness of email as a marketing tool. It is clear that email marketing will remain a powerful means of connecting with customers and prospects for the foreseeable future as Irish marketers embrace the opportunities offered by this revolutionary and continuously evolving means of communication. Andrew O’Shaughnessy CEO Newsweaver www.newsweaver.ie www.mii.ie PAGE 4 Executive summary In this year’s survey, email marketing remains an essential part of Irish marketers’ marketing mix with over 79% of respondents stating that email marketing is either “important” or “very important”. Email marketing is increasingly used by Irish marketers to achieve key sales and marketing goals such as maintaining and improving customer relationships, driving sales and generating new leads. But email marketing is also used by Irish businesses to communicate internally. There is a marked improvement in the level of personalisation and segmentation used by marketers in email campaigns. We noted in this year’s survey a substantial increase in the sophistication of tools used to conduct email marketing campaigns. In line with this trend, we also identified a large increase in the level of metrics tracked by marketers to measure the effectiveness of their campaigns. Some of the other major findings of the 2009 research: • While a large increase in email marketing tool sophistication was noted in this year’s survey, 46% of respondents still use their own standard email software such as Outlook to carry out email marketing campaigns. • A 16% increase over 2008 results in the number of respondents sending campaigns “daily” to “at least once a month”. • 62% of email databases contain less than 5000 addresses. • B2C marketers use less personalisation (30%) than B2B marketers. • A noticeable improvement over 2008 results in open rates and click-through rates of email marketing campaigns (increased sophistication in monitoring metrics, as well as a better understanding of the importance of reputation in getting an email delivered, is paying off). • Irish marketers plan to spend more (44%) rather than less on email marketing over the next 12 months. • “Inbox overload” and “spam” remaining the biggest perceived challenges for email marketing. Introduction www.newsweaver.ie www.mii.ie PAGE 5 About the research This research is in its second year running and aims to uncover current practices and trends in the use of email marketing in Ireland. The research was conducted through an online survey sent to over 3000 members of the Marketing Institute. 500 business professionals completed the survey, ranging from sales and marketing executives to company CEOs and owners of small, medium and large companies. Respondents represented a cross section of industry types, and included those working in both B2C and B2B sectors. Q What is your job title? Introduction 18%  12%  13%  26%  31%  Other  Account / Sales management  Mar:e;ng / <ran= e>ecu;?e  Mar:e;ng / <ran= management  Owner / CEO / Director / MD  www.newsweaver.ie www.mii.ie PAGE 6 Q Which industry sector is your organisation in? Q Which of the following best describes your organisation’s marketing audience? The split between B2B and B2C companies is roughly the same between the 2008 and 2009 survey. To help gauge the size of the organisations participating in the research we asked respondents to specify how many marketing staff they employed. Just over 45% of respondents were from smaller companies with less than two full-time marketing staff. 25% of respondents were from medium sized companies with 2-4 full-time marketing staff, and 26% were from larger companies with more than five full-time marketing staff. The breakdown of companies represented in this 2009 survey is broadly in line with the 2008 breakdown, with just a slight increase in the smaller company representation Introduction 1%  2%  2%  3%  3%  4%  4%  4%  5%  5%  5%  6%  8%  8%  10%  14%  19%  Agriculture/Forestry/Fishing  <=li=es  Government  Entertainment  Hotel/Restaurant  Medical/Healthcare  GransHorta=on/Gravel  Retail  Ion HroJt/Grade associa=on  Konstruc=on  Lholesale/distriMu=on  IG/Gelecommunica=ons  Educa=on/Graining  Manufacturing  Konsul=ng  Banking/Finance/Insurance  Marke=ng/Media/RuMlishing  1%  26%  23%  24%  19%  7%  Don't know  Only businesses  Primarily businesses  Roughly split between consumers and businesses  Primarily consumers  Only consumers  www.newsweaver.ie www.mii.ie PAGE 7 Introduction Q How many marketing personnel are there in your organisation? 3%  14%  4%  8%  25%  26%  19%  Don’t know  123 4566789: ;:o;6:  8712 4566789: ;:o;6:  57< 4566789: ;:o;6:  274 4566789: ;:o;6:  1 4566789: ;:=>on  1 ;?=t789: ;:=>on  www.newsweaver.ie www.mii.ie PAGE 8 Section 1 – Use of email by Irish marketers Importance of email in the marketing strategy Similar to the 2008 survey, a very large majority of respondents (79%) state that email as part of their overall marketing strategy is either “very important” (38%) or “important” (41%). This result is very significant in that it highlights the critical importance that marketing professionals give to communicating effectively with their core audiences. Q How important is email as part of your overall marketing strategy? 84% of B2B respondents give a high importance to email marketing versus 71% of B2C respondents. 5%  25%  46%  25%  4%  13%  43%  41%  Not important at all  Neither important or unimportant  Important  Very important  Business  Consumer  www.newsweaver.ie www.mii.ie PAGE 9 Section 1 – Use of email by Irish marketers What marketers use email for Respondents were asked what they use email marketing for most often in their organisation, and their answers are summarised below: Q Which of the following do you use email marketing for within your organisation? A large majority of respondents in the survey always use email for “maintaining customer relationships” (57%) and “internal communications” (63%). 63%  35%  19%  37%  24%  27%  57%  27%  45%  50%  45%  33%  56%  39%  10%  20%  31%  19%  44%  18%  5%  Internal co66unica9ons  Increasing website traffic  Driving offline sales  Building brand awareness  Driving direct online sales  Denera9ng new sales leads  Eaintaining custo6er rela9onsFiGs  Always  Jo6e96es  Never  www.newsweaver.ie www.mii.ie PAGE 10 Section 1 – Use of email by Irish marketers Compared to the 2008 survey, there was a noticeable increase in the use of email marketing to achieve the listed objectives. This highlights an increased importance of email in the marketing tool box of Irish marketers. Email systems marketers are using A large proportion of those surveyed (46%) do not use a dedicated email marketing software product and continue to rely on basic email facilities such as Outlook. This compares with 50% of respondents last year. Q What email marketing solution are you currently using? 4%  8%  12%  16%  14%  46%  Don’t know  Full service (outsourced to an email service provider)  >dvanced web@based soluAon  Bn@Couse sDstem (soEware on Dour own servers)  Fasic web@based soluAon  Gormal email sucC as Hutlook (no special soEware or  database)  0%  10%  20%  30%  40%  50%  60%  70%  +, ai nt ai ng in g   cu st o6 er  re la :o ns ;i <s   =e ne ra :n g  ne w  sa le s l ea ds   Dr iv in g  di re ct  o nl in e  sa le s  Bu ild in g  br an d  aw ar en es s  Dr iv in g  offl in e  sa le s  In cr ea sin g  w eb sit e  tr affi c  In te rn al  co 6 6 un ica :o ns   Percentage of respondents answering "always"  2008  2009  www.newsweaver.ie www.mii.ie PAGE 11 Section 1 – Use of email by Irish marketers It is also interesting to note that compared to 2008, there has been a significant increase (40%) in those using web-based or full service solutions. This is pointing to an increased sophistication of the email marketing tools used by Irish marketers. A closer analysis of the results showed that those working in B2B environments are more reliant on basic email systems such as Outlook than their counterparts in B2C.   7%  2%  14%  22%  11%  11%  32%  3%  5%  6%  10%  11%  15%  51%  Don't know  Other  Full service (outsourced to an email service provider)  CnDhouse sEstem (soFware on Eour own servers)  Gdvanced weHDHased soluIon  Basic weHDHased soluIon  Kormal email such as outlook (no special soFware or dataHase)  Business  Consumer  www.newsweaver.ie www.mii.ie PAGE 12 Section 1 – Use of email by Irish marketers Compared to 2008 results, the research shows that larger companies are quicker to move away from email software such as Outlook to deploy their campaigns (down from 44% in 2008 to 28% in 2009) 2%  3%  6%  9%  12%  16%  52%  3%  5%  6%  14%  14%  10%  48%  6%  5%  14%  24%  9%  15%  28%  Don't know  Other  Full service (outsourced to an email service provider)  DnEhouse sFstem (soGware on Four own servers)  Hdvanced weIEIased soluJon  Kasic weIEIased soluJon  Lormal email such as Outlook (no special soGware or dataIase)  Large  Medium  Small  www.newsweaver.ie www.mii.ie PAGE 13 Section 2 – Email targeting and volumes Frequency of email campaigns Respondents were asked how often they conduct email marketing campaigns. The results show that 44% of marketers send email campaigns at least once a month, while 25% of them send campaigns less than once a quarter. The 2009 results, compared to 2008, show a 16% increase in the number of respondents sending email campaigns at least once a month. Q On average, how often do you conduct email marketing campaigns? 5%  10%  25%  17%  23%  8%  11%  2%  0%  5%  10%  15%  20%  25%  30%  Don't know  We do not use email  Less than once a quarter  Less than once a month  At least once a month  At least once a fortnight  At least once a week  Daily  www.newsweaver.ie www.mii.ie PAGE 14 Section 2 – Email targeting and volumes Email database sizes A majority of respondents (62%) have email databases of less than 5000 addresses. As would be expected, B2B databases are smaller than B2C databases. 11%  3%  2%  6%  16%  62%  0%  10%  20%  30%  40%  50%  60%  70%  Don't know  250,000+ email addresses  100,000‐250,000 email addresses  25,000‐100,000 email addresses  5,000‐25,000 email addresses  <5,000 email addresses  8%  9%  4%  9%  23%  48%  8%  1%  0%  3%  15%  74%  don't know  250,000+ email addresses  100,000 ‐ 250,000 email addresses  25,000 ‐ 100,000 email addresses  5,000 ‐ 25,000 email addresses  <5,000 email addresses  Business  Consumer  www.newsweaver.ie www.mii.ie PAGE 15 Section 2 – Email targeting and volumes Use of personalisation in email marketing Personalisation and segmentation are key to getting the most out of email marketing. Anticipated, relevant and timely email campaigns are likely to yield the best return on investment. While a significant proportion of respondents (64%) do not personalise their email campaigns or only do so by name, there has been an 18% increase over the 2008 results in the number of respondents who personalise their email campaigns by more than name. Q On average, what level of personalisation do you use in your email marketing? Closer analysis of the results showed that marketers working in B2B tend to use more personalisation in their email marketing than those in B2C marketing. (This could reflect the fact that B2B marketers do more retention marketing, and have a better data profile on each address.) 5%  27%  11%  20%  37%  0%  5%  10%  15%  20%  25%  30%  35%  40%  Don't know  We do not personalise content  Use dynamic content (use data to drive targeted  content to specific users)  Personalise by more than name  Personalise by name only  www.newsweaver.ie www.mii.ie PAGE 16 Section 2 – Email targeting and volumes Q On average, what level of personalisation do you use in your email marketing? Small, medium and large companies all broadly use the same level of personalisation in this year’s survey. Compared to 2008, small and medium companies have improved on the level of personalisation beyond just using the recipient’s name. 1%  7%  32%  15%  13%  33%  2%  5%  24%  11%  25%  34%  Other  Don't know  We do not  personalise content  Use dynamic content (use data to drive targeted content  to specific users)  Personalise by more than name  Personalise by name only  Business  Consumer  2%  3%  27%  8%  24%  36%  1%  4%  28%  10%  21%  37%  1%  5%  28%  18%  13%  35%  Other  Don't know  We do not  personalise content  Use dynamic content (use data to drive targeted content to specific users)  Personalise by more than name  Personalise by name only  Large  Medium  Small  www.newsweaver.ie www.mii.ie PAGE 17 Section 2 – Email targeting and volumes Low levels of personalisation are often blamed on a lack of customer data. In this year’s survey, “lack of customer data” remains a challenge for marketers with 52% of respondents agreeing or strongly agreeing to the statement below. Q Thinking about the challenges facing email marketing, please indicate whether you agree or disagree with the following: “a lack of customer data is holding back email effectiveness” 14%  38%  30%  18%  0%  Strongly agree  Agree  Neither agree nor disagree  Disagree  Strongly disagree  www.newsweaver.ie www.mii.ie PAGE 18 Section 3 – Email benchmarks Email metrics being tracked Compared to 2008, we noted earlier an increased sophistication in the use of email marketing by Irish marketers. The answers to the questions below clearly confirm the trend observed - with a significant increase in the percentage of metrics being tracked by respondents. Q What email metrics do you regularly track? Compared to 2008, the percentage of metrics tracked in 2009 has increased in all categories: 30%  9%  16%  25%  30%  29%  25%  43%  40%  0%  5%  10%  15%  20%  25%  30%  35%  40%  45%  50%  Don't know  2esponse varia:ons by list seg?ents  Click to open ra:o  Unsubscribe rates  Bounce rates  Delivery rates  Conversion rates  Click‐through rates  Open rate  29%  35%  19%  23%  22%  21%  9%  7%  40%  43%  25%  30%  30%  25%  16%  9%  0%  5%  10%  15%  20%  25%  30%  35%  40%  45%  50%    Open rate  Click‐through rate  Conversion rate  Delivery rate  Bounce rate  Unsubscribe rate  Click‐to‐open rate  DEesponse variaFon by list segGents  2009  2008  www.newsweaver.ie www.mii.ie PAGE 19 Section 3 – Email benchmarks Further analysis found that those in B2C marketing tracked more metrics than those in B2B. This seems at odds with the fact that B2B respondents use more personalisation than their B2C counterparts. A lost opportunity? Average open rates Last year’s survey showed that 51% of respondents did not track the open rate. There has been a significant improvement this year with only 38% of respondents saying they do not know the open rate of their email campaigns. 5%  25%  10%  18%  25%  25%  35%  32%  50%  40%  8%  28%  8%  17%  25%  29%  27%  17%  34%  37%  Other  Don't know  7esponse varia=ons by list segments  Click to open ra=o  Unsubscribe rate  Bounce rate  Delivery rate  Conversion rate  Click‐through rate  Open rate  Business  Consumer  38%  17%  5%  11%  12%  9%  10%  0%  5%  10%  15%  20%  25%  30%  35%  40%  Don't know  51+%  41‐50%  31‐40%  21‐30%  11‐20%  0‐10%  www.newsweaver.ie www.mii.ie PAGE 20 Section 3 – Email benchmarks This year’s survey also shows a significant improvement in open rates compared to last year: Average click through rates Measurement of click-through rates shows an improvement in this year’s survey compared to last year with 49% of respondents not measuring click-through rates, compared to 58% last year. The overall click-through rate is also on the rise in this 2009 survey. Q On average what click through rates do you get from your mailings? 0%  2%  4%  6%  8%  10%  12%  14%  16%  18%  0 ‐ 10%  *11 ‐ 20%  *21 ‐ +0%  *+1 ‐ 40%  *41 ‐ 50%  51% +  Open rate %  Open rate comparison 08‐09  2008  2009  49%  11%  7%  10%  11%  7%  5%  0%  10%  20%  30%  40%  50%  60%  Don't know  21%+  16‐20%  11‐15%  6‐10%  3‐5%  0‐2%  www.newsweaver.ie www.mii.ie PAGE 21 Budgets allocated to email Respondents were asked to describe their email marketing spend. The majority of respondents (55%) spend less than 5% of their marketing budget on email marketing. Q. What percentage of your marketing budget do you allocate to email marketing? Compared to 2008 results, there is an overall increase in the marketing spend on email marketing. Against a backdrop of tough economic circumstances, this increase in email marketing spend suggests that marketers value the effectiveness of email in giving them a good return on investment. Section 4 – Email budgets 19%  4%  5%  7%  10%  21%  35%  0%  5%  10%  15%  20%  25%  30%  35%  40%  Don't know  21%+  16‐20%  11‐15%  6‐10%  3‐5%  0‐2%  0%  5%  10%  15%  20%  25%  30%  35%  40%  45%  0 ‐ 2%  3 ‐ 5%  6 ‐ 10%  +11 ‐ 15%  +16 ‐ 20%  21%+  ! #$ %&'()*+, -./,)0 &11#2&0)/ 0# )%&31 %&'()*+,  2008  2009  www.newsweaver.ie www.mii.ie PAGE 22 Section 4 – Email budgets Expected change in expenditure When asked how their email marketing expenditure would change over the next 12 months, a vast majority (85%) said their expenditure would either increase (44%) or stay the same (41%). Again, in the context of tough economic conditions, these results suggest marketers trust the return on investment potential of email marketing. Q How do you expect your organisation’s expenditure on email to change in the next 12 months? Don’t Know; 12%  Decrease; 3%  Stay the same; 41%  Increase; 44%  www.newsweaver.ie www.mii.ie PAGE 23 Section 4 – Email budgets Where email budgets will come from A large percentage of marketers (25%) expect their email marketing budget increase to come from new budget, followed by print/press advertising (22%) and direct mail (13%). Q Where do you expect this increase in budget to come from? 25%  13%  3%  1%  22%  1%  7%  0%  0%  0%  5%  23%  From new budget  From direct mail budget  From telemarke:ng budget  From mobile / SMS budget  %From >rint / >ress ad@er:sing budget  From inserts budget  AFrom BCD radioD cinema budget  From interac:@e BC budget  From outdoor budget  From door‐to‐door budget  From Feld marke:ng budget  Don't know / other  www.newsweaver.ie www.mii.ie PAGE 24 Future challenges facing email marketing Respondents are broadly holding the same opinions with regards to the challenges facing email marketing. “Inbox overload” and “spam” remain the strongest challenges for email marketing. However, we noted a slight reduction in “accountability/measurement”, “image blocking” and “customer data” as challenges for email marketers, compared to last year’s results. The challenges for email marketing were similarly perceived by the various industry sectors surveyed. Q Thinking about the challenges currently facing email marketing, please indicate whether you agree or disagree with the following statements. Section 5 - Challenges facing email marketing 14%  16%  13%  14%  15%  13%  40%  35%  38%  45%  37%  53%  48%  48%  47%  49%  30%  24%  21%  24%  27%  30%  8%  11%  18%  14%  24%  9%  10%  9%  6%  5%  1%  2%  5%  0%  1%  0%  1%  0%  0%  20%  40%  60%  80%  100%  120%  A lack of customer data is holding back email effecAveness  Ct is difficult to do effecAve email creaAve due to image blocking  There is a lack of accountability/measurement  Unwillingness of people to opt in to new email lists  Deliverability is becoming more difficult  Lmail doesnMt get the aNenAon/budget it deserves  Spam is eroding trust in email  Recipients' inboxes are swamped and all email suffers  Strongly agree  Agree  Neither agree or disagree  Disagree  Strongly disagree