Quarterly Benchmark Study

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1 Quarterly Benchmark Study Q (April, May, June) An Experian Marketing Services benchmark study

2 Table of contents Q Executive summary...1 A spotlight on: /mobile interactions...2 The platforms...2 Unique opens...3 Unique clicks and transactions...3 Engagement...5 Mobile devices...6 Optimize across platforms...7 Mobile tablets on the rise...7 Q benchmarks...8 Year-over-year volume comparison...8 Volume variance YOY Q versus Q Volume variance quarter-to-quarter...9 Performance analysis...10 All...10 All quarter-to-quarter...10 Business Products and Services...11 Catalogers...11 Consumer Products and Services...12 Media and Entertainment...12 Multi-Channel Retailers...13 Publishers...14 Travel...15 Appendix I: Metrics definitions...16

3 Q Executive summary The following report details the overall marketing trends for the second quarter of 2013 as well as the key performance indicators (KPIs) that shaped the success of Experian Marketing Services clients programs over the past two years. volume rose by 17.9% in Q compared to Q Unique open rates were up year-over-year by 7.2% Unique click rates declined slightly from 2.5% to 2.3% year-over-year Revenue per was $0.11, just below the $0.12 seen last quarter and last year This month in the spotlight on section we look at /mobile interactions: It is important to optimize campaign design across multiple platforms and understand the viewing preferences of your subscribers to maximize response The /mobile relationship: Fifty percent (50%) of unique opens occur on a mobile device Transactions from are most likely to occur on webmail or desktop platforms The ipad is the most popular device used for mobile transactions from Page 1 An Experian Marketing Services Benchmark Study

4 A spotlight on: /mobile interactions For marketers, addressing the varying ways subscribers can receive and open s is crucial to overall campaign success. As smartphone and tablet usage continues to proliferate, we are now seeing many campaigns with the majority of opens occurring on mobile devices. Therefore, understanding the impact of mobile on your marketing campaigns is a necessity. To dig deeper into the relationship between mobile and , we analyzed campaigns that used a Litmus pixel code and the Litmus Analytics tool to identify the platforms on which s are opened, as well as unique click and transaction metrics from Experian Marketing Services. The study included results from five million openers in response to twenty-nine campaigns sent from seven brands in the past twelve months. The platforms opens, clicks and transactions vary depending on the platform or platforms on which the open occurred. For this study, we grouped subscribers into five platform categories: Desktop-only Subscribers who opened only on a desktop, typically through a client such as Outlook Webmail-only Subscribers who opened via a webmail service only, typically through a desktop with any free service, such as Gmail, AOL Mail or Yahoo! Mail Mobile-only Subscribers who only opened on a mobile device Mobile-combo = mobile + webmail or desktop Subscribers who opened two or more times, at least one of which was on a mobile device Other = webmail + desktop Subscribers who opened two or more times, at least one was on webmail and at least one was on desktop Page 2 Quarterly Benchmark Study: Q April, May, June

5 Unique opens Looking at the average percent of unique opens per platform, we found that fifty percent (50%) of unique opens occurred on a mobile device, while desktop-only and webmail-only each received twenty-three percent (23%). Half of all unique opens occured on a mobile device Other, 1% Desktop-only, 23% Webmail-only, 23% Mobile-combo, 3% Mobile-only, 50% Unique opens Source: Experian Marketing Services Unique clicks and transactions Mobile-only also received the highest percentage of unique clicks, but that percentage dropped to forty percent (40%), compared to the fifty percent (50%) we saw with unique opens. Mobile received the largest percentage of unique clicks, but webmail was a strong second Other, 2% Webmail-only, 35% Desktop-only, 19% Mobile-only, 40% Mobile-combo, 6% Unique clicks Source: Experian Marketing Services Page 3 An Experian Marketing Services Benchmark Study

6 It is important to remember that these are averages and platform preferences can vary within and across brands, segments, offers and products. While the average percentage of unique clicks received by webmail was less than that of mobile-only openers, webmail was the lead platform for clicks for half of the mailings in this study. The strength of the other platforms outside of mobile becomes most obvious when looking at transaction behavior. Webmail was first, with forty-eight percent (48%) of all transactions, while desktop received the second largest percentage (25%) of transactions. Webmail was the leading platform for transactions on over eighty percent (80%) of the campaigns. Customers appear to be opening on mobile, but are more comfortable making their transactions on the larger screens of other platforms. Almost half of transactions occurred on webmail, with another 25% on desktop Other, 3% Desktop-only, 25% Webmail-only, 48% Mobile-only, 13% Mobile-combo, 12% Transactions Source: Experian Marketing Services Page 4 Quarterly Benchmark Study: Q April, May, June

7 Engagement While only a small percentage of opens occurred in the mobile-combo and other categories, these two platform types had the most highly engaged and profitable subscribers, reflecting the higher interest of customers choosing to open the on more than one platform. 35% 30% 25% 20% Subscribers who opened on two platforms (mobile-combo or other) were the most engaged 23% 31% 26% 15% 10% 5% 13% 12% 0% Desktop-only Mobile-only Webmail-only Mobile-combo Other Click-to open rates Source: Experian Marketing Services In addition to having the highest click-to-open rates, the mobile-combo and other categories had higher revenues per opener than any of the single platform groups. It would definitely be worthwhile to identify these subscribers and target them for future offers. While mobile-only had the lowest click-to-open rates and revenue per Subscribers unique who opened on two pla opener of any of the single platform categories, it is important to (mobile-combo remember that or other) were the most this group had the highest number 35% of openers, and therefore, even at these lower percentages, contributed a sizeable amount of overall revenue. (Mobile-only 3 provided thirteen percent (13%) 30% of total revenue compared to just two percent (2%) from the other category.) 25% 23% 20% 15% 10% 5% 13% 12% 0% Page 5 An Experian Marketing Services Benchmark Study Desktop-only Mobile-only Webmail-only Mobil Click-to open rates

8 $1.50 $1.20 Subscribers who opened on two platforms (mobile-combo or other) generated higher revenue per opener than any single platform group $1.28 $0.97 $1.00 $0.60 $0.30 $0.34 $0.10 $0.57 $0.00 Desktop-only Mobile-only Webmail-only Mobile-combo Other Revenue per unique opener Source: Experian Marketing Services Mobile devices Taking a deeper look at mobile, we also identified how popular mobile devices performed for various metrics. The iphone was by far the most commonly used mobile device for opens and clicks, but the ipad was used more for transactions. The larger screen of the ipad may be driving this choice of device, much like the desktop and webmail preferences we saw for overall purchases. Android TM phones were third for opens and transactions, but second for clicks. The iphone was the most popular mobile device for opens and clicks, but the ipad was used more for transactions. Unique opens 13% 19% 68% Unique clicks 15% 20% 57% Transactions 12% 40% 48% 0% 20% 40% 60% 80% iphone ipad Android Source: Experian Marketing Services Page 6 Quarterly Benchmark Study: Q April, May, June

9 Optimize across platforms As we have seen, the impact of mobile on is complex and variable. Therefore, it is important to optimize your campaigns across multiple platforms. Analyze the platform and device preferences of your subscribers on a regular basis to identify trends and monitor changes. Leverage platform preferences and engagement metrics to identify key subscribers for future targeted offers. Make sure that your creative is designed for mobile. Experian Marketing Services can provide responsive design templates that automatically adjust layouts to deliver a consistent experience for customers across platforms. Case studies of brands testing responsive design have shown increases of up to sixty-three percent (63%) in click rates and eighteen percent (18%) in transaction rates when using responsive design. Mobile tablets on the rise Mobile tablet use is gaining in popularity each year. With the popularity of the ipad as the mobile device of choice for transactions, it is important to ensure that s render properly on tablets. It may also be worthwhile to consider developing a tablet specific app for your brand to further promote transaction. Page 7 An Experian Marketing Services Benchmark Study

10 Q benchmarks Year-over-year volume comparison The following benchmarks report on the year-over-year (YOY) trends for the second quarter of 2013 compared to the second quarter of This quarter, volume rose by 17.9% compared to Q Volume variance YOY Q versus Q Volume Variance by - Q2 to Q2 (2013 vs 2012) 35% 31.7% 30% 25% 20% 24.4% 22.8% 17.9% 15% 10% 9.5% 10.6% 5% 0% -5% -10% -15% -13.4% -20% -25% -20.9% Business Products and Services Catalogers Consumer Products Media and and Services Entertainment Multi-channel Retailers Publishers Travel All industry Catalogers had the highest gain in volume as ninety percent (90%) of brands 25% increased mailings in Q % 20.2% Two-thirds of Consumer Products and Services and three-quarters of Multi- 15% 13.6% Channel Retail brands also had year-over-year increases in volume. 11.6% 10% 5% 2.6% 3.8% 1.5% 0% -5% -10% -15% -7.8% -11.6% Page 8 Quarterly Benchmark Study: Q April, May, June

11 Volume variance quarter-to-quarter Volume Variance Q2 Compared to Q1 by and % 12% 10% 5% 7% 4% 6% 7% 7% 0% 2% 2% 1% 0% 2% -3% -3% -10% -8% Business Products and Services Catalogers Consumer Products Media and and Services Entertainment Multi-channel Retailers Publishers Travel All industry Q2 12 to Q1 12 Q2 13 to Q1 13 Led by Consumer Products and Services and Multi-Channel Retailers, Q had a seven percent increase in volume compared to Q1 2013, which is more than triple the two percent (2%) increase seen in Page 9 An Experian Marketing Services Benchmark Study

12 Performance analysis In order to enhance our understanding of what s happening by industry, we have created views that look at all metrics and compare Q2 year-over-year for 2013 versus The following is a legend for each of these views: YOY Variance Positive change Minimal change Negative change All Variables Q2: 2012 Q2: 2013 YOY Variance Alll Total open rate Q2 All 21.9% Positive 22.8% Year-Over-Year change Minimal Performance change Analysis Negative 4.1% change Unique open rate 15.2% 16.3% 7.2% Variables Click-to-openQ2: % Q2: % -10.7% Alll Total open Total rate click rate21.9% 3.8% 22.8% 3.2% -13.9% 4.1% Unique open Unique rate click rate 15.2% 2.5% 16.3% 2.3% 7.2% Transaction-to-click 5.1% 4.4% Click-to-open 15.4% 13.7% -13.5% -10.7% Transacation rate 0.10% 0.08% -21.6% Total click rate 3.8% 3.2% -13.9% Revenue per $0.12 $ % Unique click rate 2.5% 2.3% Average order $ $ % Transaction-to-click 5.1% 4.4% -13.5% Bounce rate 2.6% 2.0% -23.5% Transacation rate 0.10% 0.08% -21.6% Unsubscribe rate 0.15% 0.12% -23.5% Revenue per $0.12 $ % -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% Average order $ $ % Bounce rate 2.6% 2.0% -23.5% Year-over-year variance Unsubscribe rate 0.15% 0.12% -23.5% In Q total and unique open rates were above those seen in Q While click rates were lower year-over-year, the results are actually mixed, as only fifty percent (50%) of brands actually had a significant decrease in click rates in Q compared to Q Although overall transaction rates declined in Q2 2013, forty-eight percent (48%) of brands had statistically significant increases in transaction rates this quarter compared to Q Average order values rose both year-over-year and quarter-to-quarter for Q All quarter-to-quarter -6.1% -6.1% -25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% Year-over-year variance Q2 Compared to Q1 All Performance Analysis Alll Variables Q1: 2013 Q2: 2013 Total open rate 24.4% 22.8% Unique open rate 17.0% 16.3% Click-to-open 14.7% 13.7% Total click rate 3.9% 3.2% Unique click rate 2.7% 2.3% Transaction-to-click 4.5% 4.4% Transacation rate 0.09% 0.08% Revenue per $0.12 $0.11 Average order $ $ Bounce rate 1.9% 2.0% Unsubscribe rate 0.14% 0.12% -15.7% -17.7% -15.0% -16.1% -20% -15% -6.3% -4.1% -6.8% -4.3% -3.7% 4.7% 4.0% -10% -5% 0% 5% 10% Quarter-to-quarter Positive change Minimal change Negative change Page 10 Quarterly Benchmark Study: Q April, May, June

13 Business Products and Services Business Products and Services Q2 Business Products and Services Year-Over-Year Performance Analysis Variables Q2: 2012 Q2: 2013 Total open rate 22.6% 24.8% Unique open rate 13.9% 15.2% Click-to-open 12.6% 11.1% Total click rate 3.7% 2.9% Unique click rate 2.1% 1.8% Transaction-to-click 8.3% 5.4% Transacation rate 0.09% 0.09% Revenue per $0.20 $0.19 Average order $ $ Bounce rate 4.0% 3.0% Unsubscribe rate 0.24% 0.16% -20.7% -14.0% -11.6% 9.9% 9.4% -34.4% -2.0% -5.6% -28.9% -24.4% -31.7% -35% -30% -25% -20% -15% -10% -5% 0% 5% 10% 15% Year-over-year variance Open rates rose, while transaction rates and revenue per were close to last year s performance for Business Products and Services in Q Catalogers Variables Q2: 2012 Q2: 2013 Catalogers Total open rate 12.7% 13.9% Unique open rate 10.2% 11.2% Click-to-open 13.3% 11.4% Total click rate 2.0% 2.0% Unique click rate 1.5% 1.3% Transaction-to-click 7.6% 7.1% Transacation rate 0.09% 0.10% Revenue per $0.07 $0.08 Average order $ $ Bounce rate 1.4% 0.3% -78.1% Unsubscribe rate 0.10% 0.06% Positive change Minimal change Negative change Q2 Catalogers Year-Over-Year Performance Analysis -39.4% Year-over-year variance -14.4% -11.0% Open and transaction rates rose for Catalogers this quarter. Seventy-five percent Positive change Minimal change Negative change (75%) of brands saw statistically significant increases in unique opens. While unique click rates were down year-over-year, total click rates matched those seen in Q % 1.2% 9.5% 9.7% 8.7% 7.1% 7.3% -90% -80% -70% -60% -50% -40% -30% -20% -10% 0% 10% 20% Page 11 An Experian Marketing Services Benchmark Study

14 Alll Consumer Products and Services Q2 Consumer Products and Services Year-Over-Year Performance Analysis Variables Q2: 2012 Q2: 2013 Total open rate 20.2% 23.0% Unique open rate 14.4% 16.0% Click-to-open 14.8% 12.9% Total click rate 3.2% 3.0% Unique click rate 2.3% 2.2% Transaction-to-click 8.1% 8.3% Transacation rate 0.12% 0.12% Revenue per $0.09 $0.12 Average order $ $ Bounce rate 3.4% 3.3% Unsubscribe rate 0.19% 0.14% Consumer Products Positive and change Services Minimal matched changeq Negative in transaction change rates, but had higher revenue per and average order values in Q Fifty-five percent (55%) of Consumer Products and Services brands had statistically significant increases in unique clicks in Q2 2013, while fifty-seven percent (57%) had statistically significant increases in unique opens. Media and Entertainment -24.6% -12.5% -8.1% -4.4% -2.6% -3.3% 1.8% Year-over-year variance 14.2% 11.5% 14.5% 27.6% -25% -15% -5% 5% 15% 25% 30% Q2 Media and Entertainment Year-Over-Year Performance Analysis Variables Q2: 2012 Q2: 2013 Alll Total open rate 20.4% 22.6% Unique open rate 14.4% 16.3% Click-to-open 16.9% 12.5% Total click rate 3.7% 3.0% Unique click rate 2.4% 2.1% Bounce rate Unsubscribe rate 5.1% 3.8% 0.18% 0.1% -48.1% -26.0% -18.9% -24.9% -12.6% 10.7% 13.4% -50% -40% -30% -20% -10% 0% 10% Year-over-year variance While overall year-over-year click rates were lower, movie and music brands saw Positive change Minimal change Negative change increases in click rates in Q Page 12 Quarterly Benchmark Study: Q April, May, June

15 Alll Multi-Channel Retailers Q2 Multi-Channel Retail Year-Over-Year Performance Analysis Variables Q2: 2012 Q2: 2013 Total open rate 20.5% 20.8% Unique open rate 14.9% 16.0% Click-to-open 16.8% 14.8% Total click rate 4.0% 3.3% Unique click rate 2.8% 2.5% Transaction-to-click 3.0% 2.6% Transacation rate 0.08% 0.06% Revenue per $0.14 $0.10 Average order $ $ Bounce rate 1.2% 1.0% Unsubscribe rate 0.11% 0.11% -28.0% -26.2% -23.2% -18.0% -11.7% -10.7% -13.9% Year-over-year variance Even with an increase in volume, open rates rose year-over-year for Multi- Positive change Minimal change Negative change Channel Retailers. While transaction rates and revenue per decreased year-over-year, they were stable when compared to Q % 1.6% 5.4% 7.5% -30% -25% -20% -15% -10% -5% 0% 5% 10% Q2 Compared to Q1 Multi-Channel Retail Performance Analysis Alll Variables Q1: 2013 Q2: 2013 Total open rate 21.5% 20.8% Unique open rate 16.3% 16.0% Click-to-open 15.6% 14.8% Total click rate 3.8% 3.3% Unique click rate 2.8% 2.5% Transaction-to-click 2.5% 2.6% Transacation rate 0.06% 0.06% Revenue per $0.10 $0.10 Average order $ $ Bounce rate 0.9% 1.0% Unsubscribe rate 0.12% 0.11% -13.3% -11.7% -5.1% -2.9% -1.7% 1.2% -1.3% 0.1% -1.0% 10.8% -11.5% -15% -10% -5% 0% 5% 10% Quarter-to-quarter variance Positive change Minimal change Negative change Page 13 An Experian Marketing Services Benchmark Study

16 Trend to Watch: Gmail delivery Gmail has an optional new inbox with organizational categories. To maximize results from your Gmail subscribers we recommend the following: Dynamically populate a banner or pre-header text for Gmail subscribers asking them to click on the priority inbox icon or to star their s. Send a dedicated message to Gmail subscribers with instructions on how to continue to receive your s in their primary inbox. Monitor response rates and see if there are any downward trends with Gmail subscribers. We looked at a random selection of twelve (12) brands with mailings in May (before the Gmail changes) and July of 2013 (after the Gmail changes), and compared open and click rates for Gmail and all other domains. We did not see any systematic decline for Gmail rates. Eight (8) of the twelve (12) brands had higher open rates for Gmail subscribers in July than in May, and seven (7) had higher click rates in July as well. We will continue to monitor user behavior and keep watch for any longer term trends. Publishers Q2 Publisher Year-Over-Year Performance Analysis Variables Q2: 2012 Q2: 2013 Alll Total open rate 22.5% 25.9% Unique open rate 15.7% 17.9% Click-to-open 16.4% 16.2% Total click rate 3.7% 4.3% Unique click rate 2.5% 2.9% Bounce rate Unsubscribe rate 3.3% 1.4% 0.11% 0.1% -58.3% -50.3% -0.8% 15.5% 13.7% 17.2% 15.1% -65% -55% -45% -35% -25% -15% -5% 0% 15% 25% Year-over-year variance Open and click rates increased Q compared to Q for Publishers. Positive change Minimal change Negative change Page 14 Quarterly Benchmark Study: Q April, May, June

17 Travel Q2 Travel Year-Over-Year Performance Analysis Variables Q2: 2012 Q2: 2013 Alll Total open rate 30.5% 28.0% Unique open rate 19.6% 19.1% Click-to-open 12.8% 12.8% Total click rate 3.5% 3.5% Unique click rate 2.4% 2.4% Bounce rate Unsubscribe rate 2.3% 1.6% 0.16% 0.1% -32.9% -26.6% -8.1% -2.6% -0.2% 0.6% 3.0% -35% -30% -25% -20% -15% -10% -5% 0% 5% Year-over-year variance Positive change Minimal change Negative change Unique open and click rates were very similar in Q to those seen last year. Sixty-seven percent (67%) of Travel brands had statistically significant increases in unique open rates in Q Page 15 An Experian Marketing Services Benchmark Study

18 Appendix I: Metrics definitions Total opens: All opens recorded for the mailing including multiple opens by the same subscriber. Total open rates are (total opens/received) Unique opens: The number of unique subscribers that have opened an HTMLformatted message. Unique open rates are (unique opens/received) Total clicks: Every click on a tracked link, including multiple clicks by a given subscriber. Total click rates are (total clicks/received) Unique clicks: The number of unique subscribers who have clicked on any link. Unique click rates are (unique clicks/received) Click-to-open rates: Unique clicks as a percentage of unique opens (unique clicks/ unique opens) Transaction rates: Overall percentage of transactions as related to delivered messages [transactions/(sent - bounced)]. This metric only includes data for clients who have implemented Experian Marketing Services Track to Purchase functionality Transaction-to-click rates as: Percentage of transactions compared to the number of unique clicks (transactions/unique clicks). This metric only includes data for clients who have implemented Experian Marketing Services Track to Purchase functionality Average order value: Average total amount for each transaction. This metric only includes data for clients who have implemented Experian Marketing Services Track to Purchase functionality Revenue per delivered: Average amount earned for each delivered [total order/(sent - bounced)] Bounce rates: The percentage of subscribers that did not receive a mailing because their addresses hard bounced (bounce/sent) Unsubscribe rates: This reflects the total number of subscribers lost as a result of users unsubscribing from the mailing [unique unsubscribers/(sent - bounced)] Page 16 Quarterly Benchmark Study: Q April, May, June

19 Experian Marketing Services 955 American Lane Schaumburg, IL About Experian Marketing Services Experian Marketing Services is a global provider of integrated consumer insight and targeting, data quality and cross-channel marketing. We help organizations from around the world intelligently interact with today s dynamic, empowered and hyperconnected customers. By coordinating seamless interactions across all marketing channels, marketers are able to plan and execute superior brand experiences that deepen customer loyalty, strengthen brand advocacy and maximize profits. Intelligent interactions. Every time Experian Information Solutions, Inc. All rights reserved Experian and the Experian marks used herein are service marks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners. 08/13

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