DoubleClick: Revenue Per E-Mail Plummets, But Conversions Rise

Revenue per e-mail delivered dropped by 19.2 percent year-over-year in the third quarter, even as the proportion of customers who made purchases after clicking through to the sites included in messages grew to 4.2 percent from 3.4 percent, according to DoubleClick's most recent e-mail trend report, released Monday. The decrease in revenue per e-mail appears to stem from falls in both the percentage of consumers opening e-mail and those clicking on the links contained in messages, as well as from smaller median order sizes.

The average open rate declined from 37.1 percent in the third quarter of 2003 to 34.3 percent in this year's third quarter; average click-through rates fell off from 9.2 percent to 8.2 percent; and average order size decreased by 6.9 percent to $94, according to DoubleClick's report.

Retail and catalog e-mails had the lowest open rates--30.8 percent--of any category of marketers. Consumer products posted the largest decreases in open rates--to 33.9 percent, from 43.9 percent. Financial services also plummeted to 38.1 percent from 44.3, while business products and services fell to 41.5 percent from 46.3 percent.

But, balanced against the declining open and click-through rates, is the fact that marketers sent out more e-mails this year than last, said Kevin Mabley, the senior director of strategic services at DoubleClick. He declined to provide specific numbers of e-mails sent. Mabley also speculated that revenue per message delivered declined because marketers have fewer new names on their e-mail lists now--and the newest customers tend to be more responsive, he said.

He said that the rising conversion rate shows that e-mail is still a solid marketing strategy. "Broadly speaking, clients are sending more e-mail and generating more revenue from the channel," said Mabley. "Given the incremental cost to send e-mail, it remains a highly profitable medium for commerce."

While an almost 20 percent drop off in revenue sounds steep, it's not likely to lead any e-mail marketers to stem the tide of outgoing messages, said Jim Nail, an analyst with Forrester Research. E-mail can be sent so cheaply, said Nail, that "revenue would have to decline much more dramatically" before marketers cut back.

Nail also speculated that consumers, faced with a deluge of e-mails, might be less inclined to open all of them. "If marketers are reaching the point of diminishing returns, they need to look at their longer-term strategy. Instead of sending more and more, they need to send less--and of the right kind."

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