Email List Size Best Predictor of Open and Click-Through Rates, According to New Study by Email Service Provider ExactTarget

Business Wire, March 8, 2006

INDIANAPOLIS -- B2B Companies and Small Email Lists Have Highest Open Rates and CTRs

List size is one of the strongest predictors of email response rates, including both open and click-through responses, according to a new study by on-demand email service provider ExactTarget. The most comprehensive study to date includes data collected during the 2005 calendar year from more than 4,000 organizations, 230,000 email campaigns and 2.7 billion email messages.

There appears to be an inverse relationship between list size and email responsiveness. According to the study, open and click-through rates both decrease steadily as list size increases.

"This phenomenon is one of the strongest cases for audience segmentation," according to Morgan Stewart, director of strategic services at ExactTarget and author of the study. "The smaller the targeted audience, the better organizations can aim their message directly to their subscribers in their email communications. This is a sure way to increase response to email communications."

The study also shows that organizations with a B2B focus experienced higher open and click-through rates than their B2C counterparts. This is partially explained by the average size of lists to which these organizations send email. Fifty-two percent of B2B email campaigns were sent to lists of less than 1,000 subscribers, and only 5.6 percent of B2B campaigns were sent to lists of more than 10,000 subscribers. Compare that with 41 percent of B2C campaigns sent to lists of more than 10,000 subscribers.

Study Details

The downward trend in open rates by list size stabilizes at between 15 to 20 percent average open rate when reaching 400,000 to 500,000 subscribers. At this point, the audience appears to be of significant size so that adding incremental names to the list does not have an increased negative affect on open rates.

The study shows that the downward trend in click-through rates is less predictable than open rates. While this trend still exists, there is more variability in average click-through rates at higher volumes. Estimation models based solely on email volume are not particularly accurate, indicating that email creative and content play a crucial role.

"The larger the list, the more important it is to have compelling creative and offers in order to generate click-through rates in your campaign," said Stewart. "With larger lists, it is much more difficult to drive significantly higher open rates than normal. This is due to both list fatigue inherent in larger lists and the reality that it is difficult to convey compelling and relevant messages to a large audience through the subject line."

The ExactTarget 2005 Response Rate Study summarizes overall open, click-through and unsubscribe rates and provides additional analyses based on day of week for sending email while examining list size and target audience. The study will be available by going to http://email.exacttarget.com/lp/2006_BestDay_Whitepaper.asp

The complete news release with graphics is available at http://email.exacttarget.com/newmarchrelease.pdf

About ExactTarget

ExactTarget is the market leader in on-demand email software solutions for permission-based email marketing. More than 4,000 organizations worldwide, including The Home Depot, Scotts and Encyclopedia Britannica, rely on ExactTarget email solutions to strengthen their customer relationships and to control email throughout the enterprise. ExactTarget is a recognized technology leader, ranked highest in business suitability by JupiterResearch in 2004 and 2005 based on the solution's usability, strong feature set and dynamic content tool. ExactTarget solutions meet the needs of all industry verticals and all size organizations, including SMB, corporate divisions, not-for-profits, large retail/direct marketers, agencies and enterprises. Privately owned and headquartered in Indianapolis, USA, the company has more than 30 offices spanning North America, Europe and Australia. To learn more, go to http://www.exacttarget.com