Measuring open rate

In this part of my series on Campaign Stats and Measurements I will be examining open rates, how they are used, where they fail and how the can be effectively used.
There has been an lot written about open rates recently, but there are two posts that stand out to me. One was the EEC’s post on renaming open rate to render rate and Mark Brownlow’s excellent post on what open rate does and does not measure. I’ve also weighed in on the subject.
Overall, I find open rates to be a very frustrating metric. Some senders, particularly those relatively new to email marketing, are so sure they know what open rate is and what it means, that they don’t take any time to actually understand the number. While the name “open rate” seems self explanatory, it’s actually not. Open rate is actually not a measure of how many recipients open an email. However, there are times where open rate is a useful metric for measuring a marketing program over time.
What is an open?
If asked, most people will tell you that open rate is the number of emails that were opened by the recipients. The problem is that this isn’t actually true. An open is counted when a tagged image in an email is rendered by the recipient’s email client. Not all mail clients render images by default, but the emails are still available for the recipient to read. If a user clicks on a link in an email that has not had an image rendered, some ESPs count that as an open as well as a click. In other cases, visiting a link in an email with no image rendered is just a click, no open is recorded.
What is the open rate?
Open rate is generally the percentage of email opens divided by some number representing the number of emails sent. Many senders use the number of emails sent minus the number of bounced emails, others use just the number of emails sent without factoring in the number of emails bounced.
Open rate is a secondary metric. While it does not measure the success, or failure, of a campaign directly, it can be used as a indicator for campaigns. Many people use open rate as a metric because it’s easy to measure. Direct metrics, such as clicks or average purchase or total purchase, may take days or even weeks to collect and analyze. Open rates can be calculated quickly and easily.
What the open rate isn’t
Open rate is not a measure of how many people opened a mail. It is not a measure of how many people read a mail. It really only records that an image in a particular email is loaded and, sometimes, that a link was clicked on. Open rates can be wildly different depending on how the sender measures opens and how the sender measures sends.
What senders use open rates for
To compare their open rates with industry averages
As I talked about above, this use of open rates is problematic at best. You cannot compare numbers, even when they have the same name, if the numbers were arrived at using different calculations. Open rate is not open rate and unless you know the underlying algorithm used you cannot compare two open rates. This is a poor use of open rate.
As a metric for advertising rates
Since a sender can manipulate the open rate by using different calculation methods, this is a good metric for the advertiser to use. It is not so great for the purchaser though, who is at the mercy of the sender’s metrics. There are contractual ways a purchaser can protect herself from an unscrupulous marketer, but only if she understands how open rate can be manipulated and takes steps to define what open rate is in use.
To judge the success of campaigns over time
A single open data point doesn’t mean very much, however, using consistently measured open rates a sender can measure trends. Open trends over time are one area that open rates can help senders judge the success, or failure, of a marketing campaign.
As one metric in A/B testing
Comparing open rates in A/B testing gives some indication of which campaigns recipients may be more interested in. As with trends over time, the lone measurement isn’t useful, but as a comparative metric, it may provide senders with insight into a particular mailing.
To judge the engagement of recipients
Over the long term, recipients who do not interact with a mailing become dead weight on the list. Too many non responders can hurt a sender’s reputation at an ISP. List hygiene, in the form of removing people who never open or click on an email, is an important part of reputation management.
As metrics for email campaigns go, open rate is limited in what it measures about an email campaign. However, as a quick way to measure trending or do head to head comparisons it is a useful metric.

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Asking the right question

My job as a consultant does involve answering questions and solving problems. Often the most important, and most overlooked, thing that I do is change the question that clients are asking. It is not that this changes the problem or even, really, changes the solution. It does change how people think of the problem, and changing how they think of the problem drives better solutions.
This can be applied to the current Email Experience Council (EEC) discussion on metrics and defining what a render rate was. Loren has a post up today detailing a number of common email situations and explaining in which cases an email is counted as open and in which cases an email is counted as unopened.
Right now an open in email terms is actually quite simple: a tagged image on a remote webserver was loaded. That’s all an open is. It used to be that no one was blocking images by default, so this was actually quite an accurate way to measure how many people were opening and presumably reading an email (at least for people using mail clients that display HTML and images).
But, as spammers started including more and more explicit images in email, recipients started asking for images to be blocked. In response to recipient requests, ISPs started blocking images by default. No longer was open rate a measure of which recipients opened and read an email, it became a measure of something completely different.
The EEC has recognized this is a problem and have decided that standardization would be a solution. As the first step to standardization they have identified two problems: open rate isn’t calculated in any standard way and the resulting ratio doesn’t describe what most people think it describes. Their recent publication The Email Render Rate defines standard calculations for render rates. This way render rates as reported by different ESPs can be directly compared. Changing the name from open rate to render rate changes what most people expect that the term means. No longer is this a measure of how many recipients opened the mail, but rather it is a measure of how many email clients rendered the images in the mail.
Maybe a better solution could be arrived at by changing the question? Instead of “how can we standardize render rate?” perhaps they should ask the question: “What do people think they’re measuring when they talk about open rates?”
Once the “what?” question is answered, perhaps a good solution to the “how?” question will become more obvious.

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Open Rate? Render Rate?

The EEC is pushing the term render rate to replace the term open rate. In addition to changing the name the EEC is attempting to standardize how the render rate is calculated. Loren McDonald, co-chair of the EEC Measurement Accuracy Roundtable posted his views on the discussion today. He presents 3 reasons why we should care about using render rate.

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Open rates climbing, click rates dropping

Ken Magill reported on a study published by Epsilon (pdf link) on Tuesday. This report shows open rates are climbing but click-through rates are falling.

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