• by daniel.c , Melinda Krueger , March 27, 2007

Dear Email Diva,

I need a reality check and basic education.

I have a very small business. I recently placed a copy ad with text link in a content publisher's email with a subscriber base of 16,000 -- and received 50 clicks. Yes, 50 clicks. The publisher can't even give me any other data on my ad except for # of clicks. They can't tell me how many people saw my ad. They wrote: "Open rates is not something we look at because that is a very inaccurate number (doesn't include pass along e-mails, or if someone opens the e-mail in their Outlook window)."

I wasted quite a bit of time and energy on this, for total disappointment. How do I evaluate what sorts of email ads to place? What metrics do I look for? What questions should I ask? And is this company giving me the runaround?

Frustrated

Dear Frustrated,

No, this company is not giving you the runaround. Opens are measured when a tiny image is called from a server; if the image is downloaded, it counts as an open. Since a huge and growing percentage of images are blocked by default, the open is not registered unless the user makes an effort to download them. Even in that case, you are not assured that a reader has seen your ad, any more than you would be if it were in print.

For your purposes, opens are irrelevant. (The newsletter publisher, however, should be watching them as a trend and trying to improve upon them by testing subject lines, timing, frequency, program value, etc.) You need to begin with the end in mind.

1. What is the value of a new customer? If you know lifetime value, great; if not, how much revenue is a new customer likely to generate in the short term?

2. What is your acquisition rate? Of those who take the action desired -- register, download, site visit of at least X pages, etc. -- how many become customers?

3. What is your conversion rate? Of those who clicked on your newsletter ad, how many took the action desired?

4. What are you willing to pay for each conversion? Do you want to acquire new customers at break-even (total cost to acquire = net purchase revenue), or are you willing to pay $10 per new subscriber?

Now you should know whether those 50 clicks were worth your investment. If

the clicks x conversion rate x acquisition rate x customer value is > zero

your efforts were likely worthwhile. This depends on many factors unique to your business, but that's the basic math.

When selecting new vendor partners, here are some questions to consider. Is the newsletter reaching the right customer group? How was the list built? What's on the editorial calendar? What demographic and recency selections are available? What can they tell you about their response trends, including open rates? What are they doing to optimize their marketing? What click-through rates are their best and worst advertisers realizing?

Look also to your side of the equation. Test copy, creative and offer until you have optimized your ad. Then test again. Another important consideration is the site experience. Test landing and registration/purchase pages to eliminate what Flint McGlaughlin calls "friction" for the customer. Make it as easy as possible for customers to move through your conversion process. To them, it shouldn't feel like a process; it should feel like the pursuit of a good value.

Hey, no one ever said it was going to be easy.

Good Luck!

The Email Diva

Send your questions or submit your email for critique to Melinda Krueger, the Email Diva, at emaildiva@kd-i.com. All submissions may be published; please indicate if you would like your name or company name withheld.