criteo state of email marketing 2015

State of Email Marketing

Helping marketers get more personal with today’s digital shoppersQ4 2015

Email marketing has been instrumental in driving the growth of eCommerce over the last decade. Marketers are now seeing even better results with personalized email marketing as it addresses concerns about unsolicited emails – and allows them to be more engaging, personal and smarter at meeting consumer needs. • Email still boasts enviable performance metrics with conversion rates up to 5x higher than social and 1.5x

higher than non-personalized display ads.• With 2/3 of all emails now being opened on mobile, personalized email marketing is uniquely adapted to

engage with today’s device-hopping consumers. • Email is the philosopher’s stone to cross-device tracking. The email ID is a unique identifier, and email

marketing can help advertisers better understand their customers’ cross-device behavior as they move across devices, browsers and apps.

• Personalized email is the new frontier. By partnering with the right email service provider, advertisers can automate their email campaigns for greater efficiency while still delivering highly relevant and personalized messages to their customers.

Executive Summary

Copyright © 2015 Criteo

Marketers trust email to keep consumers engaged

#1

@

Email is a major channel for eCommerce marketing• 205 billion emails are

sent/received by 2.6 billion users every day. On average, a user receives 88 business emails in a day.

• One-third of the world population will be using email by 2019. This means 2.9 billion email users sending 246 billion emails every day in 2019.

Source: The Radicati Group, Email Statistics Report, 2015-19Copyright © 2015 Criteo

Global email users and daily email traffic, 2015-19

2015 2016 2017 2018 20190

100

200

300

2.4

2.6

2.8

3

113 116 120 125 129

205 215 225 235 246

Business emails sent/received per day Consumer emails sent/received per dayEmail Users

Billi

ons

2.62.8

2.9

Email marketing spend and revenue is second only to search

• Email marketing accounts for a significant portion of digital marketing spend, second only to search.

• Email marketing delivers better ROI than search, display and social ads. The 17% share of marketing spend on email translates to a higher 24% share of revenues.

Source: eTail and Criteo, Trends in Digital Retail Report, 2015Copyright © 2015 Criteo

Digital marketing spend vs. revenue generated for advertisers, 2014

Revenue contribution Marketing spend

Mobile8% Search

43%

Other11%

Social9%

Display

12%Email17%

Other10%

Mobile13%

Search38%

Social5%

Display

10%

Email24%

Marketers use email

for both acquisition and retention• Email marketing is a key driver for

acquisition, and marketers rate it most important for retention.

• In addition to sales, email marketing also generates other important actions from customers including registrations inquiries, and store visits.

• Marketers also consider “retargeting” an important channel for retention, not just for acquisition.

Source: eTail and Criteo, Trends in Digital Retail Report, 2015Copyright © 2015 Criteo

Digital acquisition drivers

81% Paid Search

72% Organic Search

66% Email Marketing

41% Affiliates

35% Social Media

33% Retargeting

14% Market Places

11% CSE

9%Mobile Marketing

7%In-Store Sales & Promotions6%Advertising

Digital retention drivers

82% Email Marketing

49% Customer

Service/Support33%Retargeting

29% Loyalty/Rewards

Programs26% Personalization

22% Social Media4% Other

Digital acquisition and retention drivers for marketers

Email marketing CTRs outperform other channels

• Click-through rates for promotional emails are higher than for display, social, and search ads.

• Email usage is second only to social networks in terms of time spent online by users*. On average, a user spends 48 minutes on social networks and 28 minutes on email every day.


Click-through rates by channel, global average

Display Social Search Email0.0%

2.0%

4.0%

6.0%

8.0%

0.3% 0.6%

2.3%

7.3%

Source: Marin Global Digital Advertising Index, 2014*GFK/IAB Original Digital Video Consumer Study, April 2015

Email marketing is highly effective at delivering revenue results

• For every US$1 spent on email marketing, the average return is US$40 i.e., 2x the ROI from Internet display advertising.

• Email marketing also results in incremental sales. Marketers generate incremental sales by sending personalized offers of related/companion products to clients based on their recent purchase.

Source: Direct Marketing Association, 2014Copyright © 2015 Criteo

ROI per US$1 spent by channel, 2014

Email SEO Internet Display

Keyword Ads

Catalogs

$40.0

$22.2 $19.7 $17.1

$7.3

US$

Personalized email can dramatically increase customer engagement

#2

Use consumers’ browsing data to deliver relevant and personalized content

Advantages of using personalized* email include: • Open rates of up to 4X and click-

through rates of up to 5X higher than non-personalized email.

• Access to real-time campaign statistics and reporting.

• Ensure full-user transparency.• Can help to identify users across

devices, browsers and apps.


How personalized* email works?

Note: Personalized Email denotes Criteo EmailSource: Criteo

1 2 3 4 5

Identification of an “opted-in” user via cookie.

Collection of user’s browsing data.

Matching of the user with the email partners’ databases.

Sending of the personalized email. Personal data is never stored.

Redirection of the user back to the website, driving conversions.

@

Personalized emails keep consumers interested in your message

• Click-through rates for personalized emails are considerably higher than for non-personalized emails.

• Highly personalized email marketing puts the consumer at the center and uses dynamic content to deliver tailored messages at the individual level. This leads to significantly higher clicks and conversions.


Click-through rates by channel, global average

Email (Non-Personalized) *Email (Personalized)0.0%

10.0%

20.0%

30.0%

40.0%

7.3%

31.0%

*Note: Personalized Email denotes Criteo EmailSource: Criteo, 1H 2015 and Marin Global Digital Advertising Index, 2014

Use responsive design to engage consumers across devices• 40% of eCommerce transactions

now involve the use of multiple devices*. 28% of the time, users make their decision on one device and then purchase via a second device.

• With the majority of emails now being opened on mobile, marketers must ensure that consumers don’t find it difficult to read and interact with the email message on their mobile phones.


2/3 of all emails are opened on mobile

DESKTOP 33.0%

TABLET 16.9%SMARTPHONE 50.1%

Smartphones + Tablets

67%

Source: Movable Ink, US Consumer Device Preference Report, Q1 2015*Criteo State of Mobile Commerce Report, Q2 2015

@@

Take benefits from high consumer reactivity to email

• The high consumer attention/response to email makes it a very effective channel for addressing the high shopping cart and checkout abandonment problem associated with eCommerce.

• The rate of cart abandonment was almost 76%, and checkout abandonment rate was over 46% on US eCommerce websites in Q2 2015*.

• Following up with a personalized email to website visitors that left after adding products to the cart can help advertisers to win back some of those lost sales.


Most emails are opened/responded within 24 hours

80%% of emails opened in 24 hrs

50%% of email sales in 24 hrs

Source: Criteo 1H 2015 *eMarketer (MarketLive Q2 2015, US)

What should you expect from your modern email marketing?

#3

@

Get strong results at every stage of the conversion funnel

• The average personalized email marketing campaign delivers 25-30% open rate.

• The click-through rates are also significantly higher than other channels – including search and non-personalized email marketing.

• Email marketing performance is measurable – open rates and click-through rates can be easily tracked. Email campaigns can also be A/B tested to determine their effectiveness.


Personalized email marketing KPIs, 1H 2015*

Open Rate29%

Click-Through Rate31%

Conversion Rate5.1%

*Note: Personalized Email denotes Criteo EmailSource: Criteo, 1H 2015, Direct marketing Association, 2014

Increase online sales by up to 30% with personalized emails

• Conversion rates from personalized email marketing are 5x higher than social media and 1.5x better than display ads.

• The conversion rates for advertisers improve significantly, particularly when they send personalized emails to existing customers who visited their website.


Conversion rates by channel, global average 1H 2015

0.0%

2.0%

4.0%

6.0%

8.0%

1.0%3.1%

7.5%

3.5%5.1%

*Note: Personalized Email denotes Criteo EmailSource: Criteo 1H 2015 and Marin Global Digital Advertising Index 2014

Achieve impressive KPIs across different industry verticals

• Regardless of the industry vertical or value of the product/service, majority of eCommerce transactions involve the use of email communication with the customers at some point in the buying process.

• A key advantage with emails is that, once downloaded, consumers can read them in the absence of Internet connectivity.


Personalized email marketing KPIs by industry vertical*

Average Open

Rate

Average Click-through

Rate

Average Conversion

Rate

Fashion 24% 31% 5.7%

Travel 36% 32% 3.8%

Beauty 26% 35% 3.4%

High-Tech 34% 30% 2.4%

Automobile 27% 37% 2.0%

Classified 38% 38% 4.2%

*Note: Personalized email denotes Criteo Email Source: Criteo, 1H 2015

Act now, don’t be left behind

#4

@

Consider email personalization as a top priority

• Improving the level of email personalization and marketing automation are now top priorities for many marketers.

• Replacing existing email service provider is also a high priority as marketers want partners that can analyze consumers’ browsing history to deliver highly personalized emails.


Top marketing technology priorities for marketers in 2015

20% Increasing level of personalization in email

16% Increasing use of marketing automation

13% Replacing email service provider

12% Deploying on-site personalization

9%CRM Systems/Customer Loyalty Programs

8%User Experience Testing & Analytics

6%SEM/SEO

5%Replatforming and New Websites

10% Other

Source: eTail and Criteo, Trends in Digital Retail Report, 2015

Improve customer segmentation and targeting capabilities• Email marketing usage is shifting

away from sending out email blasts to delivering dynamically created personalized messages.

• Improving customer segmentation and targeting, and using data/analytics has become extremely important to support the growing preference for marketing automation.


Email marketing priorities for US marketers in 2015

Source: The Relevancy Group, “The Relevancy Ring: ESP Buyer’s Guide 2015”

35%Improving segmentation and targeting

33%Increasing use of analytics

33%Utilizing real-time data

30%Improving email inbox delivery

29%Centralizing customer data and making it actionable

Be compliant with country specific email marketing regulations• Privacy standards and compliance

to anti-spam laws are necessary to ensure that users are in control of the emails they receive, and they can easily opt-out, should they prefer to do so.

• Marketers must get clear consent from users on the content they would like to receive, and how often.

• Despite the need to adapt to each country’s privacy standards, personalized email marketing delivers considerable uplift in performance compared to non-personalized email campaigns.


Email marketing privacy standards

User co

nsent

for

se

nding

marketi

ng

emails User

conse

nt for

co

okie

dropp

ing To sto

p

receiv

ing

em

ails Send

er na

me

di

splaye

d in

email User

infor

mation

in

email

head

ers

User gives permission for receiving marketing emails

Not required, users can opt-out

Opt-out for Advertisers

Advertiser Not required

User opt-in required for receiving marketing emails

Implicit user consent, opt-in is not required

Opt-out from Publisher

Advertiser or Advertiser by Publisher

Required

Double opt-in required for receiving marketing emails, and additional opt-in needed to receive personalized marketing content

Implicit user consent, opt-in is not required

Opt-out from Publisher

Publisher Required

US

UK, France

Germany

Source: Criteo

Conclusion and recommendations


Email continues to outperform most other marketing channels and is also helping marketers become smarter at meeting consumer needs. The following best practices will help marketers get better results from their email campaigns: • Consider email as a critical engagement service to deliver personalized messages to optimize customer lifetime value, and not

merely as a sales tool.

• Ensure your email looks great on all devices. Integrate responsive design in the email template to account for cross-device usage and the increasing shift to mobile.

• Use marketing automation to send timely and relevant emails based on consumers’ behavior, and use it beyond cart/checkout abandonment to all website traffic.

• Make sure your email service provider can enable you to comply with the diverse country/region specific anti-spam laws and privacy standards for consent, cookie dropping, list management, etc.

What does the future hold? Personalized email marketing requires data-driven insights on customers to be able to create tailored messages at the individual level. In the future, marketers therefore will have to increasingly invest and rely on marketing automation technologies, combined with best of breed data analysis capabilities to harvest actionable insights.

This and other Criteo reports can be found at:

www.criteo.com/resources

Criteo delivers personalized performance marketing at an extensive scale. Measuring return on post-click sales, Criteo makes ROI transparent and easy to measure. Criteo has over 1,700 employees in 27 offices across the Americas, Europe and Asia-Pacific, serving over 9,250 advertisers worldwide with direct relationships with over 11,000 publishers.

Criteo ads reach over 1 billion unique Internet users (comScore, March 2015).

About Criteo

http://www.criteo.com/resources/mobile-commerce-report/

criteo state of email marketing 2015

Technology