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DoubleClick's Q3 2004 Email Trend Report Shows Email Continuing to Drive Online Sales
Continuing Email Productivity Shows Positive Signs for Holiday Shopping Season

DoubleClick's Q3 2004 Email Trend Report reveals a significant increase in the productivity of email for online merchants, with conversion rates and number of orders per emails delivered both rising over the previous year’s rates. For all mailers, the latest trend report shows continued stability in overall email performance over the past two years, while year-on-year figures show an increase in delivery rates and a decline in open rates and click-through rates.

Email Continues to Drive Sales, Although Revenue per Email Has Declined The Q3 Email trend report shows an increase in email click-to-purchase conversion rates and number of orders per email delivered for Retail and Catalog customers that track purchase activity through DARTmail. The click-to-purchase conversion rate grew 23.5 percent or 0.8 points year-over-year, from 3.4 percent in Q3 2003 to 4.2 percent in Q3 2004. The average number of orders per email delivered also rose significantly (17 percent or 0.04 points) year-over-year to 0.28 percent in Q3 ‘04 from 0.24 percent in Q3 ‘03. Despite these increases, two other measures of email productivity showed declines. Revenue per email delivered declined year-over-year to $0.21, a 19.2 percent drop, while the median order size, declined 6.9 percent year-over-year to $94 in Q3 2004.

These figures, combined with a decline in click rates for Retail and Catalog mailers (discussed below), suggest that email recipient behavior is evolving with regards to promotional email from retailers. As the email medium matures, recipients seem less likely to always click on a promotional email, but when they do click, they are demonstrating that they are more likely to be “in market” for products and services and have a higher propensity to convert.

Overall Performance Remains Steady Despite year-over-year fluctuations, overall email performance over the past two years remains stable with regards to bounce rates, open rates and click-through rates. The average delivery rate (emails sent minus the combined hard and soft bounce-back rate) grew slightly year-over-year to 89.3 percent, an increase of 1.2 percent or 1.1 points from Q3 2003 (88.2%).

The average open rate (average of 34.3%) declined 7.5 percent from Q3 2003 (37.1%), while the average click-through rate (8.2%) decreased 10.9 percent during the same period (9.2%). Despite the year-on-year decline, click-through rates have remained relatively stable over a period of two years, down only 3.5 percent or 0.2 points in that time, from 8.5 percent in Q3 2002 to 8.3 percent in Q3 2004.

Email Performance by Category Delivery rates increased from the previous year in almost every category, especially Travel, which rose 9 percent or 7.8 points from 14.3 percent to 6.5 percent. Open rates (37.1% in the Travel category) also dropped in almost every category, while click-through rates (8.7%) rose marginally in Travel over the previous year (from 8.5% to 8.7%)

Business Publisher was the only category that saw an increase, albeit marginal, in open rates (from 38.2% to 38.3%). Business Products and Services had the highest open rates at 41.5%, while Retail and Catalog had the lowest open rates of any of the categories at 30.8%. The biggest declines in open rates were in Consumer Products, which fell 22.8% from 43.9% to 33.9%, followed by Financial Services, down 14% from 44.3% to 38.1%, and Business Products and Services, down 10.4% from 46.3% to 41.5%.

Consumer Publisher (up 24.3%, from 9.3%) and Travel were the only categories to record an increase in click-through rates. The biggest declines in click rates were in Retail and Catalog (down 36.4%, from 8.8% to 5.6%), Financial Services (down 27.9%, from 10.6% to 7.6%) and Consumer Products (down 22.6%, from 11.5% to 8.9%). The highest click rate was for the Consumer Publisher category, at 11.6 percent, and the lowest was Retail and Catalog at 5.6 percent.

“Once again, this Quarter’s data reveal the incredible effectiveness of email as a marketing tool for online merchants and underscores the maturity and stability of email as a communications vehicle,” said Kevin Mabley, Director of Strategic Services at DoubleClick. “As more and more marketers adopt and abide by best practices in list hygiene and continue to pay attention to customer preferences, we predict response rates and conversion trends will continue to hold strong – a great message for merchants this holiday season.”

Methodology The DoubleClick Email Trend Report contains aggregate data from DoubleClick’s DARTmail email delivery technology. The Q3 data are based on billions of permission-based emails from hundreds of clients. The full results are available to DoubleClick customers and an executive summary is available at: www.doubleclick.net/us/knowledge

Performance metrics in this release relate to un-weighted averages across all companies. This is done to provide a measure of average company performance, due to the fact that very large mailers can bias the overall and category results.

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