Chart of the Week: 43% of organizations are "holding steady" when it comes to the effectiveness of their email marketing
Email remains to be one of the most popular marketing channels, helping marketers to reach a wide audience, convert leads and re-engage existing customers. However, the fact that it is so heavily used by marketers means that it comes with a number of challenges, which are resulting in variations in terms of the results that marketers get.
When it comes to marketers’ email marketing effectiveness, 43% reported that their effectiveness is holding steady. Demand Metric and Validity’s the State of Email Marketing 2019 report revealed that more marketers are “holding steady” compared to 2018’s 37%, however, this seems to be because fewer respondents are reporting an increase in the effectiveness of their email marketing.
[Email marketing effectiveness]
Last year saw 36% of respondents say they had experienced a slight increase in their email marketing effectiveness, but this dropped to just 28% in 2019. While there was a 1% increase in those seeing a significant increase, it seems as though marketers are seeing their results backslide slightly.
But where are marketers struggling when it comes to email marketing?
Objectives and email effectiveness
The vast majority of marketers across different industries are using email marketing primarily to communicate with customers, with B2B (74%), mixed B2B/B2C (71%) and non-profit (81%) marketers citing this as their primary objective.
Although 78% of B2C marketers say communicating with customers is a key objective, 80% use email marketing as a method of revenue generation, making this the biggest goal for this industry type.
[Email marketing objective by organization type]
These objectives give a focus for email marketing activities, which appears to pay off. According to the report, a higher percentage of organizations that report an increase in the effectiveness of their email campaigns have all of the objectives listed above. This suggests that defining goals and objectiveness can help with overall effectiveness.
On average, for these objectives, the difference between effectiveness segments was 18%, compared to 2018’s average of 10%. The biggest difference was seen for the “generate revenue” objective, with 72% of those who have seen increased effectiveness having this goal compared to 48% of those seeing a decline in effectiveness.
[Email marketing objectives and effectiveness]
This difference is likely due to the companies that are seeing improvements in effectiveness investing both time and money into achieving each of their objectives for email marketing. Understanding what you want to achieve allows you to see where tools, skills and time are required.
Revenue growth and email marketing effectiveness
When looking at revenue growth in relation to email marketing, the figures suggest that those who have seen an increase in their revenue are performing better at email marketing.
[Email marketing effectiveness and revenue growth]
Of those organizations that have seen an increase in revenue, 11% have seen a significant increase in email marketing effectiveness, 31% have seen a slight increase and 45% have held steady.
In comparison, of those who have seen revenue decrease, just 3% reported a significant increase in email effectiveness. These organizations were much more likely to report a fall in the effectiveness of their email marketing efforts, with 34% reporting a slight decline and 17% saying they’ve seen a significant decline.
Of course, that isn’t to say that email marketing effectiveness is the only contributing factor to revenue increase and it is unlikely that emails alone are responsible for improved revenue performance. However, it is fair to say that improving your email marketing could very well have an impact on revenue, especially when other aspects of marketing are also being improved on.
Email marketing challenges
So, what are the current challenges faced by marketers that could be seeing fewer organizations report increased email success?
The biggest challenge overall is competition for attention in crowded inboxes, which was also the biggest challenge reported in 2018. However, overall, fewer marketers are seeing this as a challenge with just 45% selecting it compared to well over half (54%) last year.
The second most popular challenge – staffing/resource constraints – also saw a decrease compared to 2018’s results (40% versus 41%), although this decrease was much smaller suggesting that it is still a very real issue for organizations.
In terms of the challenge that is affecting more marketers in 2019 compared to 2018, email deliverability takes the top spot. Last year saw a quarter (25%) of marketers report that they were struggling with email deliverability, however, this has risen to 37% in 2019.
[Email marketing challenges]
Although new research from the Direct Marketing Association (DMA) shows that the average email delivery rate has improved
, it is obvious that more organizations are struggling with this aspect of email marketing. Ultimately, this means that fewer people receive emails, which impacts open rates, click-through rates, and conversions.
The report also shows a slight increase in the number of marketers struggling with email service provider limitations compared to 2018 (23% versus 21%). This could well be linked to the 31% of marketers reporting that a lack of tools to optimize or personalize emails is a challenge.
As more consumers are now only engaging with personalized marketing messages, the inability to personalize or optimize emails using tools provided by email service providers is likely to become a growing challenge in the future.
Email open rates
As well as seeming to be having an impact on overall effectiveness, the email marketing challenges faced by organizations also seem to be affecting average open rates for bulk sends.
Although the same percentage of marketers (12%) report open rates of more than 25%, fewer are now reporting strong open rates of 21-25% compared to 2018 (12% versus 15%). This suggests that many marketers are struggling to achieve higher open rates for bulk sends.
[Average email open rates for bulk sends]
However, positively, fewer marketers are seeing low open rates of 5% or less compared to last year (8% versus 16%), with more respondents overall reporting open rates of between 6 and 20%. This shows that while some organizations have seen a decrease in open rates, overall, there are improvements and, on average, marketers are seeing more bulk send emails get opened, despite deliverability issues.
When looking at open rates and email effectiveness, there is a clear correlation that shows that organizations that have seen an increase in email effectiveness. Of those reporting an increase in effectiveness, 12% achieve open rates of over 25% compared to just 10% of those seeing a decline in effectiveness.
On top of this, just 5% of organizations experiencing greater email effectiveness see open rates of 5% or less, compared to 14% of those seeing effectiveness decrease.
Making changes to meet challenges
[Average open rates and email effectiveness]
When looking at the email rates achieved by the highest percentage of marketers, 33% of those with improved email marketing effectiveness see average open rates of 11-15%, with a further 25% achieving 16-20%. Comparatively, the highest proportion of organizations with decreasing effectiveness (35%) see open rates of just 6-10%, showing a much lower average.
Email marketing tactics
When it comes to tactics being adopted by organizations to improve their email marketing, personalization is the big trend. A total of 72% of respondents are now using email personalization, compared to 68% in 2018, showing that marketers are responding to customer expectations.
In fact, the top three most popular tactics have remained the same compared to 2018, although the figures for them have changed. Although email list management is still the second most popular tactic, just 63% are using it compared to 2018’s 67%.
There has been a small increase in the number of people using subject line optimization (52% versus 50%), but this tactic has remained in third place.
[Email marketing tactics]
All other tactics included in the report have seen an increase in adoption, with fairly big rises in the number of respondents using email deliverability optimization (51% versus 36%), A/B testing (50% versus 36% and reactivation campaigns (36% versus 25%), showing that marketers are also seeking to address their biggest challenges.
When looking at the tactics that are used by those organizations with the highest open rates (16% or above), there is a higher adoption of all tactics apart from artificial intelligence compared to the overall figures.
[Tactics in use with highest average open rates]
This could suggest that making use of all available tactics to improve email marketing effectiveness could see open rates improve. However, this isn’t always feasible due to budget and time resources, so concentrating on email personalization, deliverability optimization, A/B testing and email list management could be beneficial.
Email list maintenance
As well as tactics for optimizing emails, it is also important to manage your email lists. This ensures that you are sending emails to those who can receive them in order to be able to more accurately report on your campaign success.
Most respondents are following the same courses of action when it comes to email list maintenance, with no change in the most popular action (honouring “opt-out” requests 82%) and very little change being seen in the second (removing “bounced email addresses 68%) and third (adding new email addresses organically 67%) activities.
[Email list maintenance actions]
There has, however, been a small increase in the number of marketers making use of technology to manage their email lists. 31% of respondents are now using technology to remove invalid email addresses rather than doing so manually, compared to 27% in 2018. On top of this, 31% are also using software or technology to validate email addresses compared to 29% last year.
Using technology to manage these activities can free up resources that can better be used in other areas in order to improve email marketing effectiveness.
Another positive is that there has been a decline in email list maintenance bad practices. Fewer organizations are now buying email addresses (9% versus 19%) and only 3% admit to not maintaining their email list compared to 6% last year.
Overall, email marketing in 2019 is a bit of a mixed bag. Although many marketers are reporting good results, the majority of the industry seems to be struggling to do more than hold their current position.
This is likely due to an increase in the number of challenges being faced, not least is the fact that people’s inboxes are now more crowded than ever. However, assessing your current performance, comparing it against industry benchmarks and looking at what solutions are available could all see your email campaigns become more successful.
To see the full range of insights from Demand Metric and Validity and assess how the findings could impact your email marketing strategy, take a look at the full State of Email Marketing 2019 report.