Q2 2014 email trends and benchmarks

Q2 2014 email trends and benchmarks September 2014 Executive summary There is much to be said about the data deluge that marketers face today. However when it comes to the email channel, data provides an opportunity for marketers to create their ideal engagements with customers. By leveraging the right marketing data, brands can create meaningful connections with customers at the moments they re most likely to listen and respond. This in turn impacts other marketing channels, as email can serve as a bridge to connect other brand experiences, such as interactions on mobile, social and more. Epsilon compiles and analyzes aggregated data from billions of emails to provide brands with email benchmarks to evaluate their respective campaigns. We hope this data will allow you to assess your performance and help improve your email stgy moving forward. Please note that this benchmark data should only be used as a guideline. Specifics for each company will drive results. $ SAVE

Business as usual email trends The Q2 2014 Email Trends and Benchmarks analyzed performance trends by industry and message type. These metrics offer insight into how the average company performed across 13 industry categories. This study was compiled from 7.8 billion emails sent in Q2 (April-July) 2014 across more than 140 clients. Q2 2014 OVERALL PERFORMANCE s declined slightly since Q1 2014 (32.9%) to 30.8% in Q2. However, they are still up 8.0% over last year (Q2 2013). Click s declined modestly to 4.0% in Q2 from 4.3% in Q1. This is a standard seasonal decline, as by Q2 the holiday season has come to a full close. Non-bounce s remained the same in Q2 (96.4%). s continued to peform strongly 100% 90% 80% 95.9% 96.1% 96.0% 96.4% 96.1% 95.7% 96.1% 96.4% 96.4% 70% 60% 50% Non-bounce 40% 30% 27.4% 31.1% 28.5% 25.6% 27.2% 29.5% 30.9% 32.9% 30.8% Click-through 20% 10% 0% 4.4% 4.5% 4.5% 5.1% 4.3% 4.5% 4.4% 4.3% 4.0% Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 2

Industry performance Seven of the thirteen industries analyzed had an open increase of 5% or higher when compared to last year s metrics: Business Publishing/Media General, Consumer Publishing/Media General, Consumer Services General, Financial Services CC/Banks, Financial Services General, Retail Apparel and Retail General. Four of the industries analyzed had a click increase of 5% or higher: Business Products and Services General, Business Publishing/Media General, Consumer Publishing/Media General and Consumer Services Telecom. Three experienced a click-to-open increase that was 5% or higher: Business Products and Services General, Business Publishing/Media General and Consumer Services Telecom. In Q2 2014, the highest open s were in the Financial Services CC/Banks (44.1%), Retail General (43.2%) and Financial Services General (40.2%) categories. The highest click s were in Business Publishing/Media General (6.8%), Retail Apparel (4.6%), Business Products and Services General (4.4%), Financial Services General (4.4%) and Retail General (4.4%). The highest click-to-open s were in Business Publishing/Media General (29.1%), Consumer Products CPG (24.0%) and Consumer Publishing/Media General (20.2%). INDUSTRIES ANALYZED Epsilon Q2 2014 North American Industry Non-bounce Click Click-toopen Business Products and Services General 95.3% 26.2% 4.4% 16.8% Business Publishing/Media General 97.8% 23.2% 6.8% 29.1% Consumer Products CPG 94.3% 17.4% 4.2% 24.0% Consumer Products Pharmaceutical 94.3% 30.8% 4.1% 13.5% Consumer Publishing/Media General 98.9% 21.5% 4.3% 20.2% Consumer Services General 93.8% 28.1% 3.8% 13.7% Consumer Services Telecom 99.5% 18.9% 3.6% 19.2% Financial Services CC/Banks 96.3% 44.1% 4.0% 9.0% Financial Services General 96.2% 40.2% 4.4% 11.1% Retail Apparel 94.9% 29.2% 4.6% 15.8% Retail General 97.8% 43.2% 4.4% 10.3% Retail Specialty 96.3% 22.9% 2.9% 12.9% Travel/Hospitality Travel Services 96.9% 31.3% 3.5% 11.3% *Green or yellow text indicates an increase (green) or decrease (yellow) over last year s metrics that was over 5 %. 3

Research/Surveys 0.0% Newsletter 0.0% Acquisition 0.1% Editorial 2.1% Service 6.5% Other 32.0% Q2 2014: % DELIVERED Marketing 59.3% Campaign performance The Q2 2014 Email Trends and Benchmarks also analyzed the types of messages sent along with performance metrics. Up from Q1 2014 (53%), 59.3% of emails delivered by Epsilon were categorized as marketing messages in Q2 2014. Message type* Click CTOR % delivered in Q2 2014 Acquisition 22.0% 0.8% 3.7% 0.07% Editorial 25.1% 5.1% 20.4% 21.0% Marketing 26.0% 3.2% 12.4% 59.3% Newsletter 36.7% 4.8% 13.0% 0.0% Other 20.3% 2.5% 12.2% 32.0% Research/Surveys 26.2% 2.8% 10.9% 0.05% Service 58.6% 7.5% 12.9% 6.5% *Message types are based on emails deployed out of Epsilon s DREAM or Harmony platform and are defined by the person(s) creating the campaigns, which may not reflect the same definitions as your company. KEY METRICS ANALYZED BY MESSAGE TYPE ACROSS INDUSTRIES Industry Business Products and Services Business Publishing/ Media Industry category Message type* Click Click-toopen % of total delivered in industry General Marketing 17.8% 1.5% 8.6% 72.0% Other 22.7% 3.5% 15.2% 27.9% Research/Surveys 5.1% 0.8% 16.5% 0.1% General Marketing 26.9% 7.4% 27.5% 100.0% Consumer Products CPG Acquisition 78.5% 13.9% 17.7% 0.0% Consumer Publishing/ Media Marketing 16.2% 2.4% 15.0% 99.9% Other 42.1% 9.1% 21.5% 0.1% Pharmaceutical Marketing 15.5% 2.1% 13.8% 97.7% Other 13.5% 3.1% 22.9% 2.3% Service 44.9% 5.8% 13.0% 0.0% General Acquisition 24.7% 1.7% 6.8% 0.1% Editorial 21.5% 5.4% 25.1% 14.1% Marketing 19.2% 2.4% 12.3% 84.1% Other 20.6% 3.2% 15.8% 1.7% Research/Surveys 22.4% 0.0% 0.1% 0.0% Service 76.1% 4.2% 5.6% 0.0% 4

KEY METRICS ANALYZED BY MESSAGE TYPE ACROSS INDUSTRIES (CONT.) Industry Industry category Message type* Click Clickto- open % of total delivered in industry Consumer Services General Marketing 21.3% 2.4% 11.2% 99.8% Other 20.1% 4.6% 22.9% 0.0% Service 81.5% 23.2% 28.5% 0.1% Telecom Marketing 27.7% 2.6% 9.4% 90.6% Service 57.2% 8.5% 14.9% 9.4% Financial Services CC/Banks Acquisition 30.6% 1.0% 3.4% 0.1% Marketing 50.3% 4.2% 8.4% 47.1% Other 71.1% 8.1% 11.4% 17.9% Research/Surveys 51.2% 6.1% 11.9% 0.0% Service 59.3% 7.6% 12.7% 35.0% General Acquisition 18.3% 0.5% 2.5% 1.3% Marketing 25.5% 1.0% 3.9% 93.6% Other 38.2% 5.3% 13.9% 0.4% Service 78.7% 13.0% 16.5% 4.7% Retail Apparel Other 34.1% 8.0% 23.4% 8.4% Service 47.1% 5.8% 12.4% 91.6% General Acquisition 63.4% 2.7% 4.2% 0.0% Marketing 28.9% 6.6% 22.9% 24.4% Other 15.0% 1.9% 12.3% 75.6% Research/Surveys 44.3% 5.2% 11.7% 0.0% Service 69.2% 7.8% 11.3% 0.0% Specialty Acquisition 33.4% 4.7% 14.0% 0.0% Editorial 31.9% 5.7% 18.0% 06% Marketing 20.9% 2.0% 9.4% 97.4% Newsletter 36.7% 4.8% 13.0% 0.0% Other 27.8% 3.6% 12.9% 1.5% Research/Surveys 24.4% 2.6% 10.8% 0.4% Travel/Hospitality Travel Services Marketing 23.2% 2.8% 11.9% 100.0% Service 90.2% 7.6% 8.4% 0.0% *Message types are pulled from Epsilon s DREAM and Harmony UI only and are defined by the person(s) creating the campaigns, which may not reflect the same definitions as your company. 5

Triggered email trends Epsilon s triggered email metrics are compiled from nearly 300 million triggered emails sent from April 2014 to June 2014 across multiple industries. These messages were sent as the result of a consumer action, such as Welcome, Thank You, Abandon Shopping Cart or Confirmation. These metrics also highlight significant differences between triggered email performance and Business as Usual (BAU) email performance. OVERALL PERFORMANCE + Triggered messages accounted for 3.8% of total email volume in Q2 2014, 9.2% higher than Q2 of last year (3.5%). + just + an Non-bounce s continued to drive strong results in Q2, 1.9% lower than BAU. Triggered open s were 74.9% higher than BAU open s, increase over the 72.6% lift over BAU noted in Q2 2013. Triggered click s also continue to perform well, reporting 161.9% higher than BAU. This is higher than the lift noted in + Q2 2013 of 152.3%. Overall triggered message performance 100% 90% 80% 95.2% 94.7% 95.6% 95.6% 95.0% 94.2% 94.5% 95.7% 94.5% 6.0% 5.0% Q214 BAU Difference -1.9% % Total delivered 70% 60% 50% 49.8% 50.0% 47.7% 46.7% 49.2% 49.8% 49.0% 54.1% 53.9% 4.0% 3.0% +74.9% Non-bounce 40% 30% 2.0% 20% 10% 9.8% 9.7% 9.0% 11.2% 10.7% 11.5% 10.0% 11.1% 10.5% 1.0% +161.9% Click-through 0% Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 0.0% 6

Triggered email by industry The highest open s for triggered messages were in the Financial Services/ CC Banks (66.8%), Travel/Hospitality Travel Services (66.6%) and Financial Services General (60.1%) categories. The highest triggered email click s were reported in Consumer Products Pharmaceutical (18.0%), Retail Apparel (16.4%) and Consumer Publishing/ Media General (14.3%). Triggered emails tend to have higher open and click s as they are deployed based on a consumer action. The categories with the most notable difference in triggered open s compared to BAU open s were in Consumer Products CPG (+222.4%), Consumer Services Telecom (+175.7%) and Consumer Publishing/Media General (+139.0%). The most notable click difference between triggered and BAU messages were reported in Consumer Products Pharmaceutical (+332.9), Retail Specialty (289.1%) and Retail Apparel (256.2%). Q2 2014 North American Industry Nonbounce BAU nonbounce difference BAU open difference Click BAU click difference Business Products and Services General 97.5% +2.3% 49.3% +88.3% 4.4% +1.4% Business Publishing/Media General -100.0% -100.0% -100.0% Consumer Products CPG 97.3% -0.5% 56.2% +222.4% 14.0% +234.8% Consumer Products Pharmaceutical 91.5% -3.0% 55.6% +80.1% 18.0% +332.9% Consumer Publishing/Media General 97.7% -1.2% 51.3% +139.0% 14.3% +228.6% Consumer Services General 95.9% +2.2% 36.2% +29.0% 6.2% +61.9% Consumer Services Telecom 96.3% -3.2% 52.0% +175.7% 5.1% +40.2% Financial Services CC/Banks 95.2% -1.2% 66.8% +51.3% 8.8% +121.7% Financial Services General 97.4% +1.2% 60.1% +49.6% 7.1% +60.6% Retail Apparel 92.9% -2.1% 46.6% +59.6% 16.4% +256.2% Retail General 96.1% -1.7% 55.9% +29.4% 8.9% +100.6% Retail Specialty 86.9% -9.7% 49.7% +117.3% 11.5% +289.1% Travel/Hospitality Travel Services 89.9% -7.2% 66.6% +113.1% 11.7% +232.1% Yellow text indicates a 50% or higher lift over BAU. 7

Conclusion Brands today have a tremendous opportunity to create positive experiences with their customers via email. This opportunity stems from rich data about customers. Leverage marketing data and use it as the foundation of your email stgy. Let the data tell you how, when, what and who to communicate with to ignite customer connections and deliver exceptional brand experiences. Methodology The performance metrics examined averages across all companies within the stated categories. The averages listed are unweighted and do not reflect mail volumes by any one company. This is done to provide a measure of average company performance in the category, removing the effect that large mailers can have on category averages. Unless otherwise stated, all results are aggregated. Metrics used in this report are defined as follows: Rate: Total opens/emails delivered Click-through Rate: Total clicks/emails delivered CTOR (Click to Rate): Total clicks/total opens Bounce Rate: (Bounce and/or Undelivered)/Emails sent Non-Bounce Rate: 1 bounce back. Calculation does not include ISP or inbox filtering Industry categories used in the report are defined as follows: Editorial: Content consists primarily of articles, critiques, commentary, news, or opinions Legal: Content contains legal information or notification for clients, e.g. product recall notice Marketing: Content contains merchandise information and incentives for purchasing Other: Contains content that does not fit other categories Research/Surveys: Research Functions to conduct research on subscribers, e.g. the template contains a survey Service: Provide subscriber-requested information, such as banking statements Connect with Epsilon to receive the latest thought leadership and to discuss marketing trends and challenges. Twitter: EpsilonMktg Facebook: www.facebook.com/epsilonmarketing Linkedin: www.linkedin.com/companies/epsilon Blog: www.abrandnewview.com 8

About Epsilon Epsilon is the global leader in helping clients create customer connections that build brand and business equity. A new breed of agency for a consumer-empowered world, our unique approach harnesses the power of rich data, world-leading technologies, engaging creativity and transformative ideas to ignite connections between brands and customers, delivering dramatic results. Recognized by Ad Age as the #1 U.S. Agency from All Disciplines, #1 World Largest CRM/Direct Marketing Network and #3 Largest U.S. Digital-Agency Network, we employ over 5000 associates in 60 offices worldwide. Epsilon is an Alliance Data company. For more information, visit www., follow us on Twitter EpsilonMktg or call 1.800.309.0505. About Email Institute Email Institute, powered by Epsilon, was founded with the purpose of educating marketers on email marketing best practices and how it intersects with other channels (Mobile, Social Media, Brick and-mortar, Catalog, etc). The best practices site features articles from around the industry that focus on improving email marketing by pointing out how-to information on a specific subject and showcasing other company s email marketing efforts. Email Institute also showcases premium webinars, events, white papers and Epsilon primary research and benchmarks to provide in-depth information stgically targeted to increase your email marketing acumen. 9