Email’s No. 1 Misunderstood Metric

So you’re sitting around a conference table discussing your company’s email marketing and someone starts talking about the program’s open rate. To the uninitiated, common sense says “open rate” refers to the average percentage of emails that get opened. … But that’s not what it means all.

So you’re sitting around a conference table discussing your company’s email marketing and someone starts talking about the program’s open rate. To the uninitiated, common sense says “open rate” refers to the average percentage of emails that get opened.

But that’s not what it means all.

An “open” is recorded when the receiving machine calls for graphics from the sender.

With most email inbox providers blocking images by default these days, a lot of email is getting opened and not registering as such.

At the same time, email landing in boxes using so-called preview panes—those small windows that allow users a glimpse into their email’s content—will register as having been opened whether the receiver read it or not.

So the open rate is useless, right?

Well, not really. While the open rate has been widely criticized—including, at some points, by me—it can be useful as long as it’s used correctly.

While it can’t be measured with even close to 100 percent accuracy, the open rate can serve as a barometric measure.

For example, it can indicate how engaged recipients are with a marketer’s brand. A high open rate means people are making the effort to turn on the graphics in the company’s messages, indicating they’re highly engaged.

Not surprisingly, though, open rates can be misleading. A newsletter I once edited, Magilla Marketing, had a low open rate, but at least one advertiser determined I had a highly engaged readership based on its ad activity.

The issue? Our designers had designed the newsletter so well it was highly readable without the graphics turned on.

In any case, what’s an average open rate? According to email service provider Epsilon, the average open rate across all the industries it tracks for the first quarter of 2011 was 23.3 percent.

However, open rates in the report varied widely from industry to industry, from a low of 14.1 percent for retail apparel to a high of 37.4 percent for financial services.

And like response rates in direct mail, open rates will vary widely from marketer to marketer even within the same industries based on many variables, such as how the list was built, how much email the firm sends, the types of messages it sends and the types of offers.

Nonetheless industry benchmarks can serve to manage expectations.

Where an email program’s open rate can really be useful, though, is when it changes.

If it’s going up, it means the sender is doing something right and recipients are getting more engaged with the brand.

If it’s plummeting, it means the marketer has probably begun doing something wrong. For example, maybe the marketer just added purchased names to the file-a big no-no-and email inbox providers have begun treating the marketer’s messages as spam.

Also, if opens begin plummeting in addresses managed by a specific ISP, say, Gmail, it means something has happened on Gmail’s end that needs to be investigated.

The open rate can be quite useful. But it needs to be understood, first.