Most services offered online today that claim to "track" e-mails, do so by embedding images in the emails. My questions are:
Pixel tracking is the only way to track open rates. Then the links in your emails are also tracked through a redirect service for click rates. Absolutely nothing is going to be foolproof. You will have to use some guess work to figure out your actual open rate since some email clients will only take the text version and not the html and also some clients do not load images by default.
SilverPop is a popular one. They actually use PowerMTA on the back-end. Our company just ended up licensing PowerMTA and writing our own front-end and tracking.
Yes, this is pretty much the only way to do it. Consider that an email is something that is inherently static. The only way to know if someone has "opened" an email is for the email to send some information back to your server. Most email clients these days support HTML emails, which means that you can get the client to request an image (or anything else) from your server by embedding the proper HTML tags. Other than this, you cannot force an email client to do anything it doesn't want to do. It's a separate program on a remote computer, and you have no control over it.
No, there's no foolproof way. There will always be emails you can't track. If someone downloads their email and disconnects from the internet before reading it, you can't track that email. Most email clients allow you to disable image loading now as well if you want to, so that can block tracking too.
I've usually written my own, so I wouldn't know what to recommend. I imagine most services will be quite similar, so I'd base a product/purchase decision on how easy their front-end is to use.
No it's not the only way. Your HTML e-mail can refer to a web server for 'some content' which is then tracked. That could be an image, a stylesheet, some Javascript, etc. Most mail clients hate it and nothing automated is guaranteed to work.
Gain the trust of your recipient and invite them to your website. Track clicks.
In addition to pixel tracking, a second way to track open rates is by looking for clickthroughs. If someone clicked through, then they must have opened it. This is infrequent, but it's important not to throw this data away.
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