In Defense Of 'Low' Open Rates

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No one wrings their hands over email marketing’s stellar ROI, but I’m surprised by how often a big deal is made out of “low” open, click and conversion rates. Everything is about perspective. And that’s absolutely the case when looking at open rates, which can be highly misleading, especially when compared over long periods of time or between different companies.

But even when you add in opens when images are blocked and plain text email opens, the resulting “read rate” can still be quite misleading. For example, Return Path recently released fourth quarter 2012 data showing that the percentage of emails from retailers that were read fell to 15.2% from 17%.

On the surface that doesn’t look so great, but if you look deeper there’s much less cause for concern, if indeed any is warranted at all.

First, let’s look at the numbers in context. During the fourth quarter, major online retailers sent each of their subscribers nearly 18% more email on average year over year, according to Retail Email Blog research. That gain more than compensated for the lower than 11% drop in read rate.

On an absolute basis, subscribers actually read more of the emails that retailers sent them, reading more than 10 retail emails on average during the fourth quarter of 2012 versus less than 10 during the fourth quarter of 2011. That comes out to reading one retail email every 9 days or so.

Second, let’s interpret what the numbers really mean. Let’s be honest: A good chunk of the subscribers we send email to are never going to open it. These are our inactive subscribers, the ones that haven’t opened or clicked in a long, long time -- in many cases more than a year or two.

A decent estimate is that about one-third of retailers’ subscribers are inactive (and for some brands, it’s unfortunately much more). These subscribers cloud what’s really happening by depressing the engagement rates of active subscribers.

Factoring out inactives reveals that engaged subscribers are reading nearly 23% of the emails that retailers send them, which comes out to an average of roughly an email every 6 days. That’s not too shabby at all, especially compared to the number of touches you might get in other channels.

And that doesn’t include the brand impressions and calls-to-actions delivered by the “from” lines and subject lines of unread emails. During the holiday season, the effect of these is heightened because subject lines get much more tactical, relying on clearly stated sales and discount offers rather than intrigue or lifestyle appeals.

And third, let’s compare this to other channels. Of course, the real test isn’t open or read rates, but revenue. And email and search are the power channels for generating sales. Search is the king of acquisition, and email is the king of retention. While I’m a huge fan of social media, its ecommerce chops are pretty anemic, and get even weaker during the holiday season.

For instance, on Black Friday, only 0.68% of online sales came from Facebook referrals, according to IBM. That was a slight decline from the year before. Twitter performed even worse, accounting for 0.0% of Black Friday traffic, which was down from 0.02% in 2011.

When all of these factors are considered, the industry trend on read rates looks fine to me. Don’t get me wrong: There’s certainly room to improve, but let’s keep things in perspective.

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1 comment on "In Defense Of 'Low' Open Rates".

1. Pete Austin from Triggered Messaging
   

   commented on: February 27, 2013 at 9:57 a.m.
   There are technological reasons for this change. For example, in the old days, it was routine for emails clients like Outlook to show the whole email as you browsed your inbox, and these could register as unintended opens. Modern email clients such as GMail don't do this.

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