• by Jack Loechner , Staff Writer @mp_research, October 2, 2006

WebSurveyor Corp., partnering with Internet Retailer released an August survey of IR e-newsletter readers revealing that web merchants have very ambitious plans to increase both the size and scope of their e-mail marketing efforts. 18.4% expect to grow their opt-in lists by more than 50% within the next year, while another 25.1% will increase their lists by 16% to 50%.

Reported by Mark Brohan in a recent article, he says that 73% of chain retailers, catalogers, virtual merchants and consumer brand manufacturers taking part in the monthly survey on e-mail marketing, spend 5% of their marketing budget or less on e-mail marketing, yet just over half of respondents, 50.6%, report that 6% or more of their sales come from e-mail marketing, with 25% saying the proportion is over 11%.

The report found that

• 57% of the respondents have opt-in lists of fewer than 50,000 names
• 24.3% have 51,000 to 400,000 names
• 9.1% have 401,000 to 1 million names
• 10% have more than 1 million

63.8% of retailers conduct up to three e-mail campaigns each month and another 25.2% conduct between four and eight campaigns, says the report. 62.8% also indicate that they've increased the frequency of e-mail campaigns in the past year.

E-mail marketing consultants consider an open rate of about 20% and a click-through rate of 4% to 5% to be a highly effective e-mail campaign.

• 26.5% of participants in the survey report open rates of 20% or more (11.2% reported 20% to 25% while 15.3% said more than 25%)
• 11.8% report open rates of 16% to 19%
• 14.6% report e-mail open rates of less than 5%
• 6.2% say open rates of 1% or less.

Click-through and Conversion averages are growing:

• 17% report e-mail click-through rates of 16% or more
• 28.9% report click-through rates of 6% to 15%.
• 20.2% of respondents report e-mail sales conversion rates of 1% to 2%
• 26.5% with conversion averages of between 2.1% and 4%
• 14% with conversion rates of between 4.1%
• 10%, and 3.2% with sales conversion averages greater than 10%

Brohan concludes that by working smarter with existing resources while controlling costs, web retailers expect a sizeable return on their investment in e-mail marketing. Compared to the rising cost of paid search, he says, which can absorb up to 50% of a big retailer's total annual online marketing budget, e-mail marketing remains relatively inexpensive.

• 41.6% of all retailers taking part in the research spend less than 1% of their total annual marketing budgets on e-mail. That compares with
• 31.3 % spend between 1% and 5%
• 13.8% commit 6% to 10%
• 5.6% spend from 11% to 15%
• 3.8% from 16% to 25%
• 4.1% with e-mail budgets that account for 25% of their overall marketing budgets

You can read the complete article here.