April 24, 2008

Email Donor Lists Growing, Open Rates Dropping

Open rates for email campaigns and fundraising messages have declined for the past three years, but those who have provided an email address are starting to churn out at a slower rate. And, those who give online are giving more than in previous years.

And, just because you send an email and it's opened, don't expect any action from about 60 percent of the recipients.

Those are a few of the findings of a study of online activities across a three-year period of 21 large organizations by the nonprofit technology organization NTEN in Portland, Ore., and consultants M+R Strategic Services, with offices in eight cities and based in Washington, D.C. The new report covers two years and is coupled with an earlier study.

Among the highlights of the report:

• Email open rates, click-through rates and response rates have fallen from 2006 to 2007. Open rates have fallen from 21.3 percent to 17.6 percent, and click-through rates have dropped from 4.9 percent to 3.8 percent. Email newsletters, with click-through rates averaging 3.6 percent, fell in the middle.
• The nonprofits studied sent an average of slightly more than four emails per subscriber per month during both 2006 and 2007.
• The annual churn rate, or the rate at which an email list "goes bad" in a year, dropped two percentage points (from 21 percent to 19 percent) between 2006 and 2007, a positive trend.
• The total amount raised online increased by 19 percent from 2006 to 2007.
• The average advocacy email response rate in 2007 was 7.5 percent. The average fundraising email response rate was 0.13 percent.
• While gifts of $1,000 or more made up just 1 percent of overall online donations in 2007, these gifts made up 20 percent of the amount raised online.
• A significant portion (almost 60 percent) of the participants' subscribers did not take any online advocacy actions during 2007.
• So-called "super activists," the subscribers taking six or more online actions in a year, made up just 5 percent of the total email list size but accounted for 42 percent of the organizations' total actions.

Organizations in the study were: American Rights at Work, Amnesty International, Autism Society of America, Campaign for Tobacco-Free Kids, CARE, EarthJustice, Easter Seals, Environmental Defense Fund, Habitat For Humanity, Human Rights Campaign, Human Rights First, Humane Society of the United States, IFAW, League of Conservative Voters, Oxfam American, pre[k]now, Save Darfur, and SaveOurEnvironment.org, Smithsonian Institution, Susan G. Komen For the Cure, and The Wilderness Society.

According to the report, one of the challenges inherent in measuring open rates accurately is that it is somewhat complicated to measure an "open," and might be affected by factors that don't have anything to do with whether or not someone is actually opening or reading email.

The report explains that an "open" is triggered when an email recipient first loads a tiny image (known as a "pixel" because it is just one pixel large) hidden in the email message. The pixel image is hosted on the sender's email server. When it loads in the recipient's email client, the sender's server records that it was loaded, thereby counting it as opened.

This is an imprecise way of tracking opens because this tiny pixel will
load when the email message shows up in the preview pane of Outlook, for example, regardless of whether or not the recipient actually looked at the message.

Another problem is that some email providers are blocking images by default due to concerns about spam, leaving even more messages out in the cold when it comes to tracking open rates, according to the report. Anyone whose email provider automatically blocks images can open, read and even respond to an email message without ever being tracked as having "opened" the message.

According to the report, for some M+R clients, up to 25 percent of the actions or clicks in response to a particular email come from people who have never officially "opened" the email.

On average, participants in the study sent 4.3 email messages per month per subscriber during 2007, up slightly from 4.1 in 2006. According to the report, the number is an average and many organizations heavily segment and target their lists. Some individuals might have received 10 messages in a month while others received only three. The average was obtained by dividing the total number of email messages successfully sent by the total number of deliverable email addresses on the file for a given month.

The annual churn rate, or the rate at which an email list goes bad in a year, dropped two percentage points (from 21 percent to 19 percent) between 2006 and 2007. The monthly unsubscribe rate averaged 0.59 percent in 2006 and increased to 0.64 percent during 2007. December marked the highest point for unsubscribes in both years.

Email lists are growing. The annual growth rate of the organizations studied increased from 24 percent in 2006 to 29 percent in 2007.

"One of the big factors in the decrease of list churn is that organizations have more mature lists now, and are much more savvy about how they use those lists," said Holly Ross, executive director of NTEN.

The M+R/NTEN reports tracks pretty well with a study released earlier this month by online fundraising service provider Convio. In the new report, the average open rate was 17.6 percent versus Convio's 15 percent. The new report's click-through rate was 3.6 percent versus the 4 percent found by Austin, Texas-based Convio.

The two diverged when it came to money. The average gift in the new study was $87 compared to $61 in the Convio study.

Both studies also found that email lists are growing, but open rates are dropping. According to Ross, "It's hard to tell why open rates are dropping, but a few tidbits from the reports provide some clues: Email fatigue. Clearly, more people are getting more email, and they are just not opening it all. List appends. Some (larger) organizations are growing their house files by matching their mailing lists with email addresses via a third-party service. Emails acquired in this way are assumed to perform less well than emails given directly to the organization."

To read the report, go to http://www.nptimes.com/pdf/benchmark.pdf

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This article is from NPT Instant Fundraising, a publication of The NonProfit Times.

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