Do Opt-In Lists Perform Better Than Opt-Out?

Discussion in 'Mail Chat' started by roundabout, Nov 30, 2011.

  1. roundabout

    roundabout VIP

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    Do Opt-In Lists Really Perform Better Than Opt-Out?

    This is one of those questions that most email marketing experts agree on - but we've little recent data to prove
    the point. My theory is that it's such "conventional wisdom" that people have stopped testing it - the same way
    they don't do any more studies to see if smoking causes cancer. Those in the know are in agreement.

    But it was still exciting to be able to analyze data from one of my clients, a large household-name organization
    where some business units are using opt-in to build their email lists and others are relying on lists that have been
    purchased from a third party, making them opt-out.

    This organization relies on a single third-party organization for their list purchases. It's a legitimate list broker that
    is well-respected in its industry and provides business, not consumer, email addresses to my client - along with
    demographic and other information to allow for segmentation and targeting. This isn't some fly-by-night, $300 for
    1 million email addresses operation.

    For this analysis, I looked at email metrics from the beginning of 2010 through Q3 2011. I narrowed the field to
    eight business units that are strictly opt-in and seven that are strictly opt-out. All together they had over 330
    million email messages that were assumed delivered (did not bounce) in this period; 137 million were sent from the
    opt-in business units, with nearly 195 million being sent from the opt-out business units.

    So how do you think the opt-out lists performed compared to the opt-in lists?

    Open rates for the opt-in business units were, on average, 82 percent higher than the open rates garnered by
    the opt-out business units. To put that in perspective, let's look at Q3 2011. Here the opt-in business units had
    14.9 percent of their email messages opened, compared to just 8.5 percent of those sent by the opt-out
    business units.

    Over the course of these seven quarters, recipients opened over 21 million messages from the opt-in units; fewer
    than 17 million of the opt-out business units' messages were opened, even though they sent nearly 60 million
    more emails.

    [​IMG]

    The variance in click-through rates was even greater; on average the opt-in business units saw more than double
    the click-through rate garnered by the opt-out business units. For Q3 2011, that was the difference between an
    average click-through rate of 3.1 percent for the opt-in business units versus 1.7 percent for those that didn't have
    prior affirmative consent to send email messages.

    Over the period studied, the opt-in business units received nearly 1.5 million more unique clicks and nearly 2.5 million
    more total clicks than the opt-out business units. Even though the opt-out business units sent 43 percent more email
    messages.

    [​IMG]

    The last metric I analyzed was click-to-open rate. Here the results were surprising. While the opt-in business units
    clearly bested the opt-out units on opens and clicks, the 2011 click-to-open rate variance was much smaller.

    The opt-in lists still performed better in Q3 2011, but only by 6 percent. The average variance over the entire period
    was 17 percent. In 2010, the variance was much higher, ranging from 12 percent to 41 percent by quarter.

    [​IMG]

    So what does this mean? Based on this analysis, people that have actively opted in to receive email open and click-
    through at much higher rates than people that have been added to a list without their knowledge.

    But the trend in 2011 is showing that the percentage of those who click on an email once they have opened it is very
    similar. So the opt-in is getting more people to open the email, but it's not getting a significantly higher percentage of
    that group to then click on it.

    The data that wasn't included in this analysis is the most important: conversion rate and revenue generated. As with
    many large organizations, that information lives outside the email reporting platform and it's difficult to identify and
    tag revenue generated directly from an email message. It shouldn't be, because the technological capability is there,
    but it is.

    Still, let me leave you with one thought: if you're looking to build a successful email campaign that maximizes the raw
    number of people that open and/or click on your email messages, then this analysis suggests that opt-in is indeed the
    way to go.

    Source:
    http://www.clickz.com/clickz/column/2127066/opt-lists-perform-opt
     
    Last edited: Nov 30, 2011
  2. prontoam

    prontoam New Member

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    Great article. Thanks for sharing.
     
  3. DKPMO

    DKPMO VIP

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    Good to see someone has done this study. It would be also nice to see single- vs. double- opt in performance comparison.
     
  4. Pinnacle99

    Pinnacle99 VIP

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    Great info Roundy.

    Here is some food for thought... The cost to generate 1million opt-in emails(websites, signup forms, data mgmt., advertising to drive traffic to those signup sites, cost per lead, etc etc.) as opposed to paying 300$ for 1million "opt-out" records. My guess is that the money spent to create the opt-in list and the marginal revenue it produces greatly offsets the net profits earned. Ill bet if those factors were taken into consideration the guy who paid 300$ would probably earn a greater net profit after all is said and done. Any thoughts?
     
  5. roundabout

    roundabout VIP

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    If the guy was a highly seasoned mailer, had connections, knew the tricks, he could probably buy that $300 CD-ROM and make it work, given the "technology" of today. But he would be foolish to.

    Many mailers out there are optout mailers, they dont own an official website to collect, so they either buy optout/co-reg data or optin/co-reg data. I would bet you the people that collect their own optin data have the same issues with delivery and complaints though as many optout mailers do...
     

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