eMedia Strategist: An Open and Closed Case Against Open Rates
Several publishers have recently told me about advertisers of theirs who do not believe they should pay for sponsorship of an e-mail newsletter based on the circulation of that newsletter. Instead, they feel they should only pay for people who actually open the newsletter and see their creative. They only want to pay for their ad based on the newsletter’s “opens.”
While some publishers charge on a cost-per-thousand (CPM) basis, most publishers charge a flat rate for e-mail sponsorship, with a guarantee that they will deliver the message to a minimum number of readers. For example, a publisher may charge $2,000 and guarantee a minimum delivery circulation of 100,000. Let’s also assume this publisher has an average open rate of 30 percent.
Advertisers might argue that if only 30 percent of the people who get your newsletter actually open and read it, then the rate they pay ought to be based on that many people (e.g., 30,000 instead of 100,000). After all, when advertising on a Web site they typically only pay when an ad is actually delivered to a person looking at a page. Why should e-mail be any different than the Web? We know how many people open our e-mail newsletters, and we know how many people see their creative, right?
Not so fast …
It is true that any decent e-mail system can report how many people actually open an e-mail newsletter. These systems provide both the number of opens and the open rate expressed as a percentage (usually opens divided by delivered). But open rates have long been known to be unreliable. It’s one of those oddities of the Web where things seem very concrete and quantifiable because it’s expressed as a hard number. But take a look under the hood and you’ll see there are a lot of unknowns and unreliable data behind that number.
Eric Shanfelt is the founding partner of Nearview Media, a consulting firm that helps publishers with their digital revenue, audience and platform development. Eric is a 25-year digital media veteran and has been the Chief Digital Officer for several large publishing companies. You can reach Eric at email@example.com.