Bigger isn’t always better in e-mail marketing
The bigger the e-mail list, the lower the open and click-through rates, says a new study from e-mail service provider ExactTarget.
The 2005 study of more than 4,000 organizations’ 230,000 e-mail campaigns and 2.7 billion e-mail messages reports that lists with 100,000 or more names experienced an average open rate of 18.2% and click-though of 3.6%, while those of 101-1000 names had an open rate of 42.1% and click-through rate of 6.8%. For lists of 1,001 to 10,000, the rates were 33.2% and 5.1%; for 10,001 to 100,000, the rates were 25.8% and 4.5%.
"This phenomenon is one of the strongest cases for audience segmentation," says 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 e-mail communications."
ExactTarget reports that the downward trend in open rates by list size stabilizes at a 15% to 20% 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 effect on open rates,” ExactTarget concludes.
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,” ExactTarget says. “Estimation models based solely on e-mail volume are not particularly accurate, indicating that e-mail 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."
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