Definition
Email marketing consistently delivers the highest return on investment of any digital marketing channel. Average ROI is estimated at 3,600-4,200%, meaning every pound spent on email marketing returns 36-42 in revenue. However, accurately calculating ROI requires including all costs: platform fees, creative production, copywriting, design, list management, and paid acquisition. Most marketers underestimate costs by only counting their ESP subscription, which inflates the perceived ROI.
Formula
Email ROI is calculated as total revenue attributed to email minus total email programme costs, divided by the costs, multiplied by 100.
Why It Matters
Email ROI is the metric most used to justify email marketing investment to stakeholders. It directly compares financial output to financial input, making it understandable across business functions. Tracking ROI by campaign type, segment, or channel helps allocate budget to the highest-performing activities.
Related Glossary Terms
A/B Testing
A/B testing in email marketing is the practice of sending two variations of an email to a small sample of your list to determine which version performs better before sending the winner to the remaining subscribers.
Announcement Email
An announcement email is a dedicated campaign that communicates a specific update, milestone, or change to subscribers, from product launches and feature releases to company news and events.
ARPU (Average Revenue Per User)
ARPU (Average Revenue Per User) is a metric that measures the average revenue generated per email subscriber over a specific period, used to evaluate list value and campaign effectiveness.
Attention Rate
Attention rate is the percentage of email opens that last longer than 5 seconds, distinguishing genuine reads from passive opens, preview-pane views, or Apple MPP auto-loads.
B2B Email Marketing
B2B email marketing targets business professionals and organisations with longer sales cycles, educational content, and relationship-driven campaigns compared to B2C email.
B2C Email Marketing
B2C email marketing focuses on sending targeted promotional and transactional emails to individual consumers, emphasising personalisation, urgency, and direct response.