Yesmail’s Email Marketing Compass: The Mobile Effect

pg. 2

Introduction Table of Contents

Executive Summary.......... pg. 3

Key Findings....................... pg. 3

Mobile Metrics.................... pg. 4 - 6

Database Metrics................ pg. 7 - 9

Standard Metrics................ pg. 9

Recommendations............ pg. 10 - 11

Glossary................................ pg. 12

pg. 3

Introduction

EXECUTIVE SUMMARY:In today’s quickly evolving email marketing field, not all email metrics are created equal. As consumer behavior and preferences change, so do the metrics that best track and report on them.

With the consumer in mind, Yesmail Interactive has produced this report aimed at directing marketers’ attention to the components of their email program that best reflect their customers’ preferences and shifting patterns of brand interaction.

This report was developed based on more than 5 billion emails sent by Yesmail Interactive in Q2 of 2013.

KEY FINDINGS:Mobile:Mobile is huge, no surprises here. In order to provide real context of its significance, this report will explore the extent to which mobile determines email behavior and defines conversion. 61% of consumers are now viewing email either exclusively on a mobile device or using BOTH mobile and desktop devices interchangeably. And that’s just scratching the surface.

Database:Consumers are communicating their satisfaction with a marketer’s messages by way of opening and clicking. This means attaining a growing percent of active subscribers* is a good indication of an effective email program. In the hospitality/travel industry an average of 23.4% of subscribers are active, while in B2B, this number is 1.5%. The gap between those industries is largely symptomatic of the different types of products/services they offer, their different target audiences, as well as different database composition. This report will dive deeper into how other top industries fare in terms of subscriber activity.*opened/clicked in the last 90 days

Standard:While standard email metrics such as delivery, open, click and unsubscribe rates continue to be very important to marketers, this report offers data that can be used to enhance them. By assessing customer engagement with the brand (through database metrics) and customer device preference (through mobile metrics), marketers can tailor and optimize their communications to achieve better open and click rates, while discouraging unsubscribes. As always, deliverability remains at the core of a successful email program. For the second quarter of 2013, the average delivery rate for Yesmail clients across all industries was above 97%. For standard metrics by industry and for insights into the way mobile and database metrics can improve your overall email performance, let’s jump right in.

Q1 Q3Q2 Q4

5 Billion Emailssent by Yesmail in Q2 2013

= 10m Emails

pg. 4

Mobile

MOBILE METRICS:Mobile, defined here as smartphone and tablet usage, has grown significantly in the last few years and is no longer a marketing phenomenon but a prominent fixture in the way consumers interact with brands. However, as mobile continues to grow and becomes the dominant mode of email viewership, it remains a puzzle for many marketers. The significant difference between mobile and desktop click-to-open rates suggests a disconnect between the way marketers cater to consumers who open on mobile vs. those who prefer desktop.

• 49% of all email opens happen on a mobile device

• The average click to-open rate across all industries is 100% higher for desktop than it is for mobile

Click-to-open rate refers to the number of people who clicked on an email after opening it

• 61% of active users view emails either exclusively on a mobile device or using both mobile and desktop interchangeably (referred to as ‘hybrid’ or ‘hybrid viewership’ in this report)

• 1/3 of consumers are device-agnostic: they view emails on both desktop and mobile interchangeably without a commitment to one over the other (hybrid users)

• 82% of mobile activity comes from Apple. This percentage is consistent with reports on device preference based on mobile traffic and mobile email opens. This percentage can also be attributed to Apple owning the lion share of the tablet market and to reporting variations between Apple and Android in images-off mode

48.64% 22.56% 11.07%

Percent of opens on mobile

Percent click-to-open desktop

Percent click-to-open mobile

Other – 0.38%

Microsoft – 0.32%

Blackberry – 0.17%

Android – 17%

Apple – 82%

pg. 5

Mobile

When drilling into industry metrics, consumer services pops up as an interesting category: it ranks 3rd in desktop click-to-open, but 1st in mobile click-to-open. Here are some possible explanations:

1. The majority of marketers in the consumer services industry are based online and that environment encourages consumers to complete transactions on-the-go. Since email is often a primary driver of traffic to the online-only storefronts of consumer services brands, their calls-to-action are likely easier to complete on a mobile device.

2. Marketers in the consumer services industry recognize their customers’ device usage patterns and optimize for their preference: 66% of their active subscribers open emails either exclusively on mobile or prefer hybrid viewership (refer to graph below).

The retail industry tells a different story. Whether customers are exclusively mobile readers or hybrid readers, almost two-thirds of them view retailers’ emails on a mobile device. However, the retail industry lands in the bottom half in terms of mobile click-to-open rate. This finding suggests a challenge for retailers when translating their email content from desktop to mobile environment. Due to the similar nature of the retail and consumer services industries, it seems the retail vertical has the same potential, but retailers need to harness the power of mobile-first email strategies to better engage their customers.

* This industry pertains to services or businesses (primarily online) that provideaspecificservice, but do not sell goods. e.g.OpenTable,Zagat, Groupon,Match.com

Mobile Findings:Mobile Click-to-OpenWhile 49% of emails are opened on a mobile device, the click-to-open rates on mobile are, on average, 50% lower in comparison to desktop. This means consumers open emails on their mobile device half the time, but don’t take any action. However, when the same emails are opened on a desktop, consumers interact with them at a considerably higher rate. This finding suggests marketers are missing an opportunity to effectively engage with customers who interact on a mobile device. Let’s take a look at some examples.

Email Click-to-Open by Industry

% Mobile CTO CTO Industry Opens Desktop Mobile

B2B 39.49% 20.88% 7%

Consumer Services * 50.20% 30.38% 19%

CPG 43.51% 28.79% 12%

Entertainment 40.69% 22.40% 13%

Financial Services 51.42% 10.78% 2%

Healthcare 33.03% 41.55% 18%

Hospitality/Travel 52.59% 20.37% 9%

Marketing/Advertising 31.81% 11.71% 3%

Publishing 34.37% 31.28% 16%

Retail/Wholesale 48.46% 21.05% 11%

Technology 45.80% 11.54% 4%

pg. 6

Mobile

Hybrid Viewership: The concept of hybrid viewership is defined as consumers’ casual transition between viewing email on a desktop and viewing email on a mobile device. In 2012, 49% of consumers were smartphone users. This number is expected to grow to 60% by the end of 2013*. As consumers integrate smartphones more and more into their lifestyle, they will move away from viewing email exclusively on desktop. The prominence of hybrid viewership indicates that subscribers are choosing to respond via the most convenient device at the time they receive the message, regardless of device preference. As a result, hybrid email viewership is a type of behavior marketers should strongly consider as part of the email experience.

* AlwaysConnected:HowSmartphonesandSocialKeepUsEngaged,AnIDCReseearchReport,Sponsored by Facebook

B2BUnlike B2C, the B2B industry’s desktop vs. mobile preference is split almost equally down the middle with hybrid viewership comprising a minor percentage. One likely explanation is, for the B2B industry, this metric reflects subscribers’ preferred mode of business. Whether they are on the road, or at a desk, the primary device a subscriber uses to conduct business remains more consistent than the one used by consumers on their personal time.

% Desktop % Mobile % Hybrid % Hybrid Industry Only Only and Mobile

B2B 49% 48% 3% 51%

Consumer Services 34% 29% 37% 66%

CPG 45% 30% 25% 55%

Entertainment 39% 28% 34% 62%

Financial Services 42% 50% 8% 58%

Healthcare 52% 26% 22% 48%

Hospitality/Travel 32% 30% 38% 68%

Marketing/Advertising 45% 30% 25% 55%

Publishing 45% 22% 34% 56%

Retail/Wholesale 36% 34% 30% 64%

Technology 43% 26% 31% 57%

Email Viewership Preference by Industry

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DATABASE METRICS:In the context of email, database activity is a reflection of how successful an email program is at engaging customers, i.e. the higher the proportion of active subscribers, the more engaged the database. Maintaining a strong percentage of database activity is a good indication of an effective email program in terms of email deliverability, cadence, frequency, and content.

• The average active subscriber rate across all industries was 7.4% Anactivesubscriberisdefinedashavingopenedan email in the last 90 days

• Over 1/3 of databases had a subscriber activity rate of 25% or higher

• Average number of opens per opener was 7, while average clicks per clicker was 3. On average, 43% of openers ended up clicking Opens per Opener = number of opens per active subscriber in the last 90 days

Clicks per Clicker = number of clicks per active subscriber in the last 90 days

• On average, the number of messages sent to an active subscriber during a 90 day period was 3.5 per week (or 43 for the quarter)

* Findings are based on more than 5 billion email messages sent by Yesmail Interactive in Q2 of 2012.

Avg. emails per opener: 43

Avg. opens per opener: 7

Avg. clicks per clicker: 3

* Based on a 90-day period

Database Findings:Mailing Frequency & Email EngagementThere has been much discussion over what’s the right number of emails marketers should send per week. And though it depends on a marketer’s industry, mailing program and customer base, what the data in the graph below demonstrates is that frequency is not an enemy provided marketers are meeting the demands of their customer.

Percent of Active Subscribers by Number of Emails They Receive Weekly*

* Active subscriber = someone who has opened an email in the last 90 days

Database

0% 5% 10% 15% 20% 25%

Less than one

Between one and two

Up to three

Between three and seven

Seven or more

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Avg. # Emails Avg. Opens Avg. Clicks Industry per Opener per Opener per Clicker

B2B 10 1 1

Consumer Services 114 15 6

CPG 22 3 2

Entertainment 44 6 3

Financial Services 13 3 1

Healthcare 16 3 2

Hospitality/Travel 37 6 2

Marketing/Advertising 74 6 2

Publishing 55 9 3

Retail/Wholesale 55 8 3

Technology 20 3 1

Marketers with the highest percentages of active subscribers email every other day. Many of the marketers in the top 1%, in terms of active subscribers, are in the consumer service or retail industries. Many of the top performers employ a daily deal model and rely on message relevance through the right personalization strategies. The graph below shows that, in addition to mailing nearly every day, brands in the consumer services industry seem to engage their active subscribers on the most frequent basis: the category has the highest average opens per opener and clicks per clicker with 15 opens and 6 clicks registered in the second quarter of 2013.

Who knew that sending almost daily could contribute to high customer engagement with a marketer’s email.

Active Subscriber Rate:Before we derive any conclusions from the data, it’s important to note that subscriber activity rates for industries as well as individual marketers vary greatly, based on database maturity, mailing frequency, and, especially, targeting strategies.

For instance, in some databases, the subscriber activity was lower than 5%. Upon a closer look, we discovered it was a result of companies intentionally mailing to a small segment of their mailable subscribers. For some brands, this may be an appropriate strategy, dictated by their business model and changing target audience. For many, however, it suggests that a majority of subscribers are sitting dormant with no proactive attempt to re-engage them through various strategies. This is a clear area of opportunity for marketers to engage a larger portion of their subscribers through strategic email programs such as re-activation, nurture, life-cycle and more. No matter what percent of a database is active, there is always room for improvement that typically leads to increase in revenue.

Database

Email and Engagement Count by Industry

* Based on a 90-day period

pg. 9

STANDARD METRICSWhile the email landscape has changed significantly over the last decade, delivery, open, click, click-to-open and unsubscribe rates remain relevant indicators of email performance. Our goal is to supply marketers with the knowledge and tools to enhance the performance of their email programs. Knowing what data to collect, as well as how to analyze it is half the battle to better understand subscribers and, subsequently, improve all KPIs.

Database Activity Rate by Industry

Standard

Database

Findings

• Overall deliverability is 97%

• Overall click-to- open rate is 12.8%

Delivery Bounce Open Unique Total Click-to- Unsub Industry Rate Rate Rate Click Rate Click Rate Open Rate Rate

B2B 87% 13.3% 17.3% 1.6% 2.6% 9.0% 0.45%

Consumer Services 98% 2.5% 13.2% 2.3% 3.2% 17.8% 0.02%

CPG 96% 4.4% 16.0% 2.2% 3.4% 13.8% 0.16%

Entertainment 97% 3.2% 15.3% 1.9% 2.8% 12.3% 0.04%

Financial Services 92% 7.6% 23.0% 0.7% 1.4% 3.2% 0.04%

Healthcare 88% 12.5% 19.5% 4.3% 6.4% 22.2% 0.12%

Hospitality/Travel 98% 1.7% 17.7% 1.9% 2.5% 10.5% 0.03%

Marketing/Advertising 90% 10.4% 9.0% 0.5% 0.8% 5.8% 0.08%

Publishing 96% 3.9% 16.3% 2.9% 4.4% 18.1% 0.03%

Retail/Wholesale 97% 2.7% 14.7% 1.8% 2.4% 11.9% 0.06%

Technology 97% 2.9% 17.9% 0.9% 1.4% 5.2% 0.11%

1.48%

B2B ConsumerServices

CPG Entertainment FinancialServices

Healthcare

6.20% 5.37% 7.13% 7.30% 17.68%

23.35%

Hospitality/Travel

Manufacturing Marketing/Advertising

Publishing Retail/Wholesale

Technology

9.69% 3.65% 15.19% 10.73% 6.81%

* Yesmail does not count multiple opens and/or clicks as part of an email’s open rate. Open rate is calculated solely based on unique opens.

pg. 10

Recommendations

RECOMMENDATIONS:Mobile: Make a point of optimizing for mobile by adopting the following key mobile-first principles:

• Tailor content to the mobile context: this tactic leads to higher click-through rates and engagement

• Implement mobile email design to promote email readability and interaction

• Leverage mobile functionality

Tolearnmoreaboutmobile-first,checkouttheWhyStopHere?sectiononthenextpage.

Database:Knowing your database means knowing your customers. It is imperative for marketers aiming to engage a larger segment of their subscribers to gain and maintain a comprehensive view of their database composition. It enables them to:

• Identify different segments by customer activity, behavior and purchase history

• Track subscribers through their entire lifecycle and instantly understand the engagement level of each subscriber

• Take proactive measures to limit churn and grow the active subscriber base

Moreover, knowing their database allows marketers to develop strategic programs tailored to each of their subscriber segments, such as:

• Welcome & activation programs

• Reactivation programs

• Upsell programs

• Loyalty programs

• Newsletter programs

Cleanliness is next to godlinessPerforming regular data hygiene is essential for maintaining a clean database and limiting deliverability risks such as bulking and blacklisting. Instead of suppressing large numbers of mailable users due to deliverability risks, marketers should proactively clean their databases frequently and integrate data hygiene practices in their sign-in process.

Tolearnallaboutdatahygiene,databasesegmentation,anddifferentemailprogramstoengagecustomers,check

outtheWhyStopHere?sectiononthenextpage.

pg. 11

WHY STOP HERE?Yesmail Interactive is dedicated to helping brands remain on top of the changing digital marketing landscape by providing proprietary research on industry-defining trends and actionable recommendations on how marketers can improve their programs and achieve higher ROI. But don’t believe what we have to say, check out these resources to learn how to get the most out of your marketing efforts.

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pg. 12

GLOSSARY:Mobile: % Mobile Opens = Mobile Opens/Total Opens

% CTO Desktop = Unique Clicked Desktop/Opened Desktop

% CTO Mobile = Unique Clicked Mobile/Opened Mobile

% Desktop Only = Proportion of email viewers who only used desktop to interact with email

% Mobile Only = Proportion of email viewers who only used mobile to interact with email

% Hybrid = Proportion of email viewers who switched between mobile and desktop to interact with email

Database: % Mailable Database = Total Mailable Users/Total Users

% Active Subscribers = Proportion of database subscribers with opens clicks in the last 90 days

Avg # Emails per Opener = Number of emails an active subscriber received in the last 90 days

Opens per Opener = Number of opens per active subscriber in the last 90 days

Clicks per Clicker = Number of clicks per active subscriber in the last 90 days

Standard: Open Rate = Opened/Delivered

Total Click Rate = Total Clicks/Delivered

Click-to-Open Rate = Unique Clicks/Opened

Unsubscribe Rate = Unsubscribe/Delivered

Glossary

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