This is the third in a series in our series on Increasing Revenue from your email inventory. See the first and second post here.
In our last post on Revenue Per Open (RPO), we looked at how to get started with monetizing your email inventory. In this third blog post, we’ll dig into increasing activity related to email engagement, newsletter sends and opens.
The more people that receive and open the emails, the higher the RPO.
The formula is a pretty simple one. The more emails you send, the more opens you get. The more opens you get, the higher your revenue. With that said there are a few considerations that need to be made here.
Subject Lines. One of the most important factors in revenue per open, is the open. Heck, it’s right there in the name. For example let’s say you’re a publisher with the following stats:
– Send Frequency: Once per week
– Subscribers: 10 million
– Open Rate: 15%
– Tags per template: 2
– Average CPM: $1.25
Based on these stats:
RPO is $2.50 which equates to $3,750 in revenue per week.
– $1.25 (CPM) x 2 (LPO) = $2.50 (RPO)
– $2.50 (RPO) X 1,500,000 (10M subscribers X 15% open rate with 2 Ad Tags) / 1,000 = $3,750
With a 5% increase in open rate, a publisher could increase their weekly revenue 33%, totaling $5,000.
– $2.50 (RPO) X 2,000,000 (10M subscribers X 20% open rate with 2 Ad Tags) / 1,000 = $5,000
But increasing open rate by 5% is easier said than done. While the inbox is the most intimate digital environment, it is also a highly competitive one. According to the Radicati Group, a person sends/receives an average of 204 emails per day. Standing out and increasing opens starts with the subject line.
One of the best ways to optimize subject lines is through A/B testing. Here are a couple of tips on A/B testing from a recent LiveIntent Webinar featuring Dela Quist (CEO, Alchemy Worx), Parry Malm (CEO, Phrasee) and Dave Hendricks (President, LiveIntent) on optimizing subject lines to get more opens:
Know What the Right Sample Size Is: You need to make sure whatever your findings are are a statistically significant representation of your audience. There’s nothing worse than making decisions based on bad data. To get an idea of how big an audience sample you need, check out evanmiller.org.
Keep Track of What You’re Testing: Tests should be well thought-out and tracked. Make sure in the A/B test, track and analyze results., you keep track of every test and the results in a spreadsheet. This data will help you learn more about your audience, so you can continue to optimize as you go along. There are also some tools that will help you automate and test your subject lines more efficiently and more effectively called Phrasee and Touchstone.
Know Your Audience: “Personalization” means more than just putting someone’s name in the subject line. It means knowing what resonates with your audience, segmenting content accordingly, and reflecting that content in the subject line. You want to make sure there is enough information in the subject line that your subscribers know that you’re sending them something they care about, while holding just enough back that they feel the need to open.
There are also plenty of other examples out there of companies that have had success with great email subject lines.
Frequency. Once you’ve mastered subject line optimization, increasing the frequency in which you send email to you subscribers is another way to help boost RPO.
Let’s say these are now your stats:
– Send Frequency: Once per week
– Subscribers: 10 million
– Open Rate: 20%
– Tags per template: 2
– Average CPM: $1.25
Based on these stats:
RPO is $2.50, which equates to $5,000 in revenue per week.
– $1.25 (CPM) x 2 (LPO) = $2.50 (RPO)
– $2.50 (RPO) X 2,000,000 (10 mil subscribers X 20% open rate with 2 Tags) / 1,000 = $5,000
Now if you take the same stats and math above but instead of sending email once per week, we up that to twice per week the revenue would increase to $10,000
– $2.50 (RPO) X 2,000,000 (10M subscribers X 20% open rate with 2 Tags) / 1,000 = $5,000 X 2 (sends per week) = $10,000.
Seems like a no brainer, right? Kind of, but it’s not quite that simple. Keep in mind that the higher the frequency of emails sent, the greater the chance your open rate will drop. The trick is to find the balance of send frequency and open rate that will drive the most revenue.
For instance, let’s say sending twice per week dropped your open rate 5%, back down to 15% per send. Your weekly revenue would be $7,500 – still more than when you were sending once per week.
– $2.50 (RPO) X 1,500,000 (10M subscribers X 15% open rate with 2 Tags) / 1000 = $3,750 X 2 (sends per week) = $7,500.
But if you increased frequency to 3 times per week, and your open rate dropped another 5%, to 10% per send, you wouldn’t have made any gains in revenue:
– $2.50 (RPO) X 1,000,000 (10M subscribers X 10% open rate with 2 Tags) / 1,000 = $2,500 X 3 (sends per week) = $7,500.
See? It can be a bit tricky. But you can increase frequency while mitigating the effect it has on your open rates using some of the following tactics:
Segment by Device: As of Q3 2015, more email opens occurred on smartphones than desktops.
Considering the environment in which users are opening emails plays a significant role in the RPO conversation. Take a look at when and where your audience tend to open your emails the most, then segment them accordingly and send more often to those people during those times.
Just make sure that the user experience across devices is seamless and efficient. 71.2% of people will delete an email if it does not display correctly on mobile. 16.3% said they would unsubscribe (BlueHornet). Also, to be clear, when we talk about a mobile friendly template this includes the layout of the content as well as the ad units. LiveIntent has a number of ad units that fit very well into responsive design templates. These ad units include the 300×250 and Marquee.
You can find more information on mobile audience behaviors in email in our most recent report, The People Behind the Screens.
Segment by Engagement: If you have a segment of people that consistently open your email, these can be considered the cream of the crop as far as subscriber engagement goes. By creating a separate segment of these individuals and sending them more content, you can increase RPO without risking lower open rates or deliverability issues.
Segment by Content: Same as with subject lines, different content is going to resonate with different audiences. People don’t mind receiving more of what they love. Where you run into issues is when your content is irrelevant. Just make sure you have a subscription center set up so that if certain segments of your audience can manage their own frequency without having to unsubscribe from all communications.
For a free evaluation of your inventory and strategy session with one of our RPO experts here at LiveIntent, fill out the form on our Contact Us page.
