Introduction to Acquisition Email Marketing

1. Introduction to AcquisitionEmail Marketing Corporate Overview and Statistics

2. Agenda • Market Opportunity for Email Marketing • Budget Related • ROI • Top Objectives/Challenges for Email Marketing in 2014 • Mobile Email • Performance Metrics: setting the right expectation • Critical Success Factors • Targeting – pinpoint your audience • Deliverability – know the hurdles • Effective Creative – use best practices methodology • Email Campaign Integration

3. Changes to Email Marketing Budgets MarketingSherpa study found 94% of CMO’s responded that they will hold constant or increase email marketing budgets in 2013. Source: 2013 MarketingSherpa Email Marketing Benchmark Survey

4. Email Marketing Growth The DMA reports that email marketing expenditures will continue to out-pace traditional marketing channels, with a nearly 9% CAGR through 2016. Source: DMA, The Power of Direct Marketing, 2011–2012 Edition.

5. 2014 Budget Changes by Channel StrongMail’s2014 Email Marketing Trend Survey on budget allocation found CMO’s allocating more budget to email marketing than any other channel. Source: StrongMail 2013 Email Marketing Trends Survey

6. Perception of ROI Drives Investment MarketingSherpa survey found 92% of the marketing leaders they surveyed felt email either produces, or will produce, positive ROI. Source: 2013 MarketingSherpa Email Marketing Benchmark Survey

7. Top Goals for Email Marketing: 2014 Top three organizational goals for email in 2014 are delivering highly relevant content, increasing website traffic and increasing sales conversion, which are all acquisition oriented. Source: 2013 MarketingSherpa Email Marketing Benchmark Survey

8. Current Email Marketing Assessment Companies that have a formal process in place for email marketing see a 56% greater ROI on their email efforts than companies that do not. Source: 2012 MarketingSherpa Email Marketing Benchmark Survey

9. Top Email Marketing Challenges: 2014 • Delivering highly relevant content • Driving additional traffic to website • Increasing sales conversion and/or revenue • Increasing engagement metrics • Maintain subscribers and driving opt-ins • Integrating email with other marketing tactics • Increasing lead generation • Build brand awareness/reputation • Segmenting the email database • Measuring ROI • Improving delivery • Expanding testing and optimization Source: 2013 Marketingsherpa’s Email Marketing Benchmark Report

10. Outsource to Optimize CMO Perspective: Few can execute the entire campaign internally. Outsourcing is a requirement to obtain the best results. Note: V12 Group provides each of the outsourced email services listed above. Source: 2012 MarketingSherpa Email Marketing Benchmark Survey

11. Benefits of Email Marketing Return on investment averages $39.40 for commercial email and is projected to bring in $35.02 for every dollar spent in 2016… outperforming all direct marketing channels. Other benefits include: • Ability to segment and target specific audiences to improve relevancy • More frequent communication at substantially lower cost • Speed of Execution – campaigns can be executed in days instead of weeks or months • Real-time marketing and engagement tracking • Faster test cycles lead to quicker campaign optimization Source: Direct Marketing Association

12. Growing Usage of Email for Mobile More email is read Mobile than on a desktop email client or via webmail. Stats show that 42% of email is now opened on a mobile device. Litmus –”Email Analytics” (March 2013) Mobile purchasing decisions are most influenced by emails from companies (71%) only surpassed by the influence of Friends (87%) Adobe - “2013 Digital Publishing Report: Retail Apps & Buying Habits”

13. Mobile Email Opens by Industry Hospitality and consumer services see the highest mobile engagement

14. Key Mobile Considerations Marketers need to embrace the mobile-majority audience or risk a decline in performance of clicks and conversion. Better adapt email design principles to cater to mobile user: • Shorter copy • Larger fonts • Smaller image sizes • Clear call to action • Finger padding Consider post-click activity for mobile friendliness: • Apply similar email design basics • Allow buying in as few clicks as possible (ie. One-click Checkouts) TEST, TEST, TEST • Don’t spend time behind laptop/desktop to set-up email, start testing on mobile devices to get in the mindset of the user and evaluate campaign click activity

15. Mobile Device Design Tips Mobile Email Design Limitations - no set guidelines to satisfy all users/devices • Email needs to render on desktop, laptop AND multiple mobile devices • Reduce scroll time to limit user frustration • Pixel width: aim for 450-500 pixels wide and 480 pixels high • Add a link for a mobile-friendly online version ie. View as mobile link • Effectively use the pre-header area (top 150 pixels on a Smartphone) • Simplify your message and make it easy to process and understand • Use a single-column ladder design instead of multiple columns • Use a minimum 12pt font size and add “pixel padding” for clumsy fingers • Keep text flush left where it’s easiest to read • Always consider image sizes/load time (data plan usage) • Use a bigger call to action icon Visit emailresources.v12groupinc.com for more mobile tips

16. Mobile Engagement Mobile users less likely to click to convert so consider these factors: • Is your website/landing page mobile friendly? • Is your design too small for a mobile device? • Are there too many fields to complete? Source: 2012 MarketingSherpa’s Email Marketing Benchmark Report

17. Various List Types for Email Marketing Know your list types to set expectations: • CRM: Current customer database or house file • Third Party: Homogenous group of people such as readers of a specific magazine like Tennis Magazine or Golf Magazine • Compiled Data: This is aggregated data brought together to build a database from a variety of opt-in sources. Typically this will include publishers, sweepstakes, consumer survey data, retailers, etc…

18. Know What to Expect for Results • Most published email campaign performance is for CRM • Be careful not to set false exceptions when asked; “What performance metrics can we expect?” • See following two slides for actual campaign averages by database type and industry • Understand critical success factors that impact campaign performance and be able to spot them: • Effective targeting • Compelling calls to action • Creative that gets to the Inbox

19. Key Metrics – CRM Email Marketing

20. Key Metrics – Acquisition Email Marketing Source: V12 Group 2012 Performance by Industry

21. Understanding Report Terminology • Quantity Ordered: quantity of original order • Quantity Delivered: quantity delivered after hard and soft bounces • Opens: # of recipients that opened the HTML version with images enabled • Click-through (CTR): occur when a recipient clicks on the link. The # of CTR’s is the total of all links that were clicked on within the text and HTML creative • Open and Click to Ordered: percentage of opens and clicks that were tracked in comparison to the quantity ordered. Used for reporting purposes only as quantity delivered is the relevant measurement • Click to Delivered: # of times all links in an email were clicked compared to the quantity delivered

22. Understanding Reporting (cont.) • Click to Open: number of times all links in email were clicked compared to the number of people who opened the email. Click to Open rates provide valuable information on the performance of the campaign as it shows out of the recipients that were intrigued enough to open your message, how many were still intrigued enough to click through and visit your website for more information. Can profile openers/clickers to identify most responsive audience for better targeting on future campaigns. • Soft bounce: Email message that gets as far as the recipient’s mail server (it recognizes the address) but is bounced back undelivered before it gets to the intended recipient. Might occur because the recipient’s mailbox is full, the server is down or swamped with messages or the message is too large. Soft bounces can also include thinks like auto-replies to your email. Once an email has soft bounced 3 times without any traceable activity it will automatically be converted to a hard bounce and removed from your list. • Hard bounce: Email message that has been returned to the sender is permanently undeliverable. Causes include invalid email address (domain name doesn‘t exist, typos, changed address, etc.) or the email recipient’s mail server has blocked your server.

23. How to Measure Success • Typical email campaign reports include what is helpful but not sufficient to determine the real success of the campaign. • Number of emails delivered • Number of email opened • Number of emails clicked • Opt-outs • To truly measure the performance of an email campaign it is important to track behavior once the consumer clicks onto the brands website pages. This helps estimate actual value of the email campaign beyond and helps develop future campaigns. • Page views • Opt-ins • Purchases • Most website analytical tools provide a simple tag/code that is tied to each link included in the email creative. Typically this is Omniture or Google Analytics. • Key take away: Determine during the planning stage what is going to be measured and how.

24. Benefits of Email Targeting • Your message is delivered to the right person and the right time which can improve engagement • Your promotion material is highly relevant to your targets’ needs, and is less likely to be marked as spam or deleted • Your attention is focused on one specific market area or target audience, which is likely to result in your campaigns being far more cost and time efficient • By differentiating yourself from your competitors, prospective customers are less likely to focus on price as the key issue, thus enhancing your profit margins

25. Selecting the Target Audience • Current customers • Capture email addresses at checkout • Append email addresses to customer database • Prospective customers • Profile and focus on people that look like your best customers • Geo-target prospects that live within your primary trade area

26. Customer Profiling • Profiles help create a general stereotype that defines an audience so that marketing communications can become more tailored and relevant • Customer Profiles report key traits such as income, age, home ownership, presence of children, marital status, household composition, lifestyle interests. • Customer Profiles can identify the following: • “Who” are your customers? • How are they alike/differ? • Were do they live? • What are their traits/behaviors • Primary vs. Secondary Customers: not all customers are created equal • Primary Customers make up 65% or more of your customer base or generate 65% or more of your revenue • Secondary Customers are mostly transients who buy from you infrequently or spend very little when they do purchase

27. Using Profiles to Prospect • Not everyone is a prospect so be sure to target the right ones by profiling existing customers • Use the Profile to identify and locate the most productive consumer segments • Acquire prospect counts by segments • Create the most relevant communications and promotions for each consumer segment • Deliver the communications/promotions via email marketing as often as possible • Generate response measures to ensure continuous improvement

28. Prospect Analysis • Successful prospecting requires a good testing plan so every campaign can be analyzed and adjustments can be made to better performance • Create subject lines and offers that are compelling and tailored to your specific segments • Test different subject lines, offers, and incentives • Identify how you will follow-up with responders • Email will give you almost immediate metrics for Opens and Clicks but you will also want to develop a reasonable results schedule that you can make a 30-day commitment to monitor • Track the results and answer these questions: • How many leads, phone calls, sales, etc. • Did your prospecting generate leads within the 30 days? • Did you get additional referrals from your prospecting activities? • Are there enough openers, clickers or responders to retarget?

29. Current Situation • Marketing Sherpa’s 2013 Email Marketing Benchmark Report found the following delivery related challenges for this year • Delivering relevant content: 1st • Increasing email engagement metrics: 4th • Deliverability: 12th • Cost of challenges in email deliverability • Twenty (20%) percent of legitimate email never reaches the inbox due to blocking by ISP’s • $1 in every $9 dollars spent on email marketing is wasted due to blocked delivery • What drives the issue with email deliverability? • Yahoo, AOL and other email providers make reporting unwanted emails as spam easy so recipient mark as spam/junk instead of opening to unsubscribe • Forrester predicts by 2014, the average consumer will receive 9,000 email marketing messages a year • Contrary to what you may have been told there is no day of the week better than any other • Recipient engagement is sole determinant of continued deliverability

30. What is Recipient Engagement • What is an “engaged recipient”? An engaged recipient is someone who is actively reacting to an email by opening and/or clicking on the URLs in the message • Why is it so important that they are engaged? You can have stellar delivery, but that does not matter is the recipients are not responding. Over time, if the recipients are not responding to your messages by way of at least an open, the ISPs will route to junk/spam folder. • Are ISPs monitoring engagement? YES. ISPs are monitoring the same metrics we are. Open, click, report spam, forward to a friend, etc. are on their radar. If campaigns produce low open or click with high spam complaints, you are not sending relevant messages. The ISPs are monitoring this and will deliver your mail based on the “engagement score” that’s been assigned. The score is based on the behavior of the recipients of messages previously sent by you.

31. Delivery Best Practices • Maintain constant working relationships with email deliverability experts such as ReturnPath Internet Service Providers (ISPs) to ensure we receive immediate notification is any deliverability issues arise • Set up feedback loops (FBLs) and Whitelists with ISPs that offer such services. • Spam complaints are part of sending prospecting email • Any company that send acquisition emails will receive spam complaints at times • Yahoo, America Online (AOL), and other email providers make it easy for users to report unwanted email message as spam just clicking a quick • Reporting email as spam has become known as the lazy person’s opt-out Note: V12 Group adheres to all of these practices

32. Delivery Best Practices (cont.) • Authenticate using SPF (Sender Policy Framework) and DomainKeys • SPF prevents spoofing of the email address we send from. ISPs check a line in our header information to determine authenticate sender • DomainKeysinclude encoded digital signature in the e-mail message. The receiving ISP can verify whether or not the email originated from the alleged domain • Constantly monitor email delivery • When a problem is noticed with a particular ISP it is important to quickly react to ensure the lines of delivery stay open • This includes managing feedback loops, opening tickets with ISPs and addressing complaints in a timely fashion

33. Delivery Best Practices (cont.) • Use separate IP addresses for different types of messages • Enables better management of issues that arise • Dedicated domains and IP addresses for brands that mail consistently is much better than the use of shared domains or IP addresses • When sending large volume campaigns • Suggest clients use multiple creative for every 1mm records • This modifies creative “footprint” of the message and prevents ISP filtering which results in improved delivery rate • Protect sending reputation and system infrastructure through full compliance with legally required email practices • We remedy complaints as quickly as possible • Meet or exceed all aspects of CAN-SPAM compliance • Cleanse lists of opt-outs and hard bounces immediately and provide information back to clients to do the same • Only send legitimate offers

34. Ways to Control Spam Complaints • Relevance in acquisition email marketing is imperative • Recipient engagement plays a bigger role in determining inbox delivery • The message should be relevant if you want to generate a response and not a spam complaint • Email sending best practices are operating imperatives • Compliance with legally required e-mail practices • CAN-SPAM compliance • Quick processing of opt-out requests • Remediation of complaints • List hygiene to remove opt-outs and hard bounces • Accept that spam complaints are part of acquisition email

35. The ‘Creative’ Impact on Delivery • Subject Lines: heavily weighted in spam scores • Trigger words and phrases ($$, free quote, debt, rates, cash, investment) • File Sizes: overall file size of the entire email not to exceed 70k (keep images at 15-20k each for faster download) • Font Colors and Large font sizes • Excessive back-end programming and style sheets • Notorious industries plagued by SPAM • Insurance • Debt related services • Weight loss • Miracle cures/drinks • Be your own boss • Always consider the mobile user

36. Three Basics of Email Creative There are basic principles should be applied to create effective email marketing campaigns. • Be Clear: copy and graphics need to be direct and to the point • Be Concise: Attention spans are short so keep your email brief and always consider the mobile user • Be Correct: avoid outrageous claims or guarantees. Check your spelling. Make sure all URL’s are working and images render correctly

37. Targeted Content Tips • Know your audience and be relevant • Leverage your brand influence • Quickly convey your value proposition or unique selling point • Introduce product benefits • Focus on one or two key elements • Be specific: Generic phrases that can apply to any product or service should be avoided (ie. “Amazing Deal” can apply to anything – “Amazing $5 DVD Deal” is clearly specific) • Use clear call-to-actions (CTA’s) • Use text based links strategically • Include a very compelling offer

38. Best Practices for Email Creative Best Practices = Industry Standards that can help delivery /performance • Set overall width to 550-600 pixels for desktop viewing • Pay attention to overall file size and optimize images for email (50-70k max) • Use a mix of visible html text and images (aim for 60/40 ratio) • Use Alt tag text for when images are not enabled • Keep pertinent offer information above the fold area (top 200-250 pixels) • Use a clear call-to-action button (and clickable url links) above the fold • Use one-line pre-header text to outline the offer to benefit mobile users • Do not program using style sheets or lengthy coding • Avoid ‘spammy’ words that might trigger filters • Avoid dark backgrounds with white knockout text • Use email safe fonts, avoid large fonts or red font color (OK within a small image) • Does the landing page support the email offer? (consistent look/clear call to action)

39. Subject Lines and Landing Pages • Subject Lines: Make it the Star! Spend 40% effort on actual creative and 60% crafting a compelling and succinct subject line • The first 45-50 characters of any subject line should clearly state a benefit or offer • Avoid non-text characters (!@$&%) • Offer driven vs. benefit driven • Test, Test, Test • Email Marketing Captures the clicks, Landing Pages Sell the Product • Prevent lengthy emails, use landing pages • Reference vs. Transactional (information capture) • Think consistency and conversion • Same look and feel as email • Use clear CTA’s • Limit form fields (especially for mobile) • Consider load time and finger padding for icons (another mobile factor)

40. Samples: Email & Landing Pages Email Creative Landing Page Creative

41. Creative Meltdown: Common Mistakes • One and done approach • Using a print ad for email is a big mistake • Slicing up one large image into smaller individual images • Excessive load times due to image sizes • Packing in too much information • Assuming the end users knows what you are selling and what action you want them to take • Not using enough (or too many) click thru links • Not considering the mobile user

42. Samples of Successful Creative

43. Samples of Marginal Creative

44. Above ‘The Fold’ (Images On)

45. Above ‘The Fold’ (Images Off)

46. Testing • Test one creative element per campaign • Subject line • Call to action • Imagery/graphics • CTA button (color/location) • Day of the week/time of day • Test rendering for multiple ISPs and mobile devices before you send so emails appear as intended • 70% of consumers delete emails that don’t render well on a mobile device immediately. Source: BlueHornet “Consumer Views of Email Marketing” (January, 2012)

47. Email Campaign Integration Most common campaign deployment options: • Stand-alone campaigns • Bookend programs: Direct mail with pre/post-drop emails • Email to direct mail non-responders • Synchronized with direct mail campaigns • Email/direct mail/phone campaigns • Drip campaigns (multiple impressions) • Forward on/Share with a friend (Social Media Integration)

48. Email & Social Integration: Benefits • “Interactive marketing spend across email, mobile and social, may increase over 200% to nearly $16 billion by 2016.” American Marketing Association • Marketers should not isolate themselves to one media channel. An appropriate integration of both social and email will yield the best results. • Studies show e-mails containing links to share on Facebook or Twitter generated a 30% higher click-through rate than emails without them. • Email messages with only one social icon returned an average 8.70% CTR • Email messages with 3 or more social sharing icons generated over 28% higher CTR than messages with one icon and 55% higher CTR than messages with no social sharing icons! Source: GetReponse, Email Marketing and Social Media Integration Report

49. Email & Social Campaign Integration 84% of executives said that email/social media campaign integration increased the effectiveness of marketing and sales efforts, while 81% said it helped increase market share. Source: Economist Intelligence Unit (EIU). *The Economics of the Socially Engaged Enterprise. March 26, 2012

50. Email Training Summary • Start with a strategy…during the planning stage determine what will be measured and how it will be measured to determine success • Consider the importance of targeting the right audience • Know the list type that is being used to set proper expectations: • CRM vs. 3rd party vs. Compiled • Use performance metrics to adjust strategy and apply findings to future campaigns • Know the obstacles of delivery and how they affect performance • Always adhere to creative best practices to prevent any delivery or rendering issues and use a compelling call to action • Remember the key creative considerations for mobile email users • Add value to the campaign using social media integration