OnlyOnce

A Different Take on The Gates

A Different Take on The Gates

We went up to Central Park today to see The Gates.  We thought it was ok, but boy was it a madhouse up there. 

Anyway, we were struck at some angles by the similarity between the gates of the gates, and one of the most famous gates in the world which we saw on our trip through Asia last year:  the O-torii.

The O-torrii is one of the most recognizable images of Japan.  It is a 53 foot high vermilion gate rising out of the sea in front of the Itsukushima Jinja shrine on the island of Miyajima, off the coast of Hiroshima.  It was built out of trunks of local camphor trees in 1875.  Due to its location, it was one of the few landmark structures we saw in Asia that hadn't burnt to the ground at least once or twice.

Check this out - perhaps it's not entirely coincidental?

Oh, Behave!

Oh, Behave!

This week, we launched behavioral targeting for email through our PostMasterDirect group.  This is a great development for us and will produce great value for clients over time by increasing response rates.  It may seem like a bit of buzzword bingo since BT is the phrase of the year in the online media world, but it's actually a product we've had in development for some time now. 

Our VP Engineering for list and data products, Whitney McNamara, had a great posting on his blog about BT and how we do it.  The whole thing is worth a read, but the real gem in my mind (and what's most consistent with Return Path's philosophy about consumers and targeting in general) is at the end:

As a final note, it's critical to remember that none of this means that the people who are collecting the data know better than that actual people on the receiving end what is appropriate and interesting. Ideally (as in the case of PMD/RP's behavioral targeting), BT is a technique that supplements -- not replaces -- targeting based on people's explicit requests for information.

And yes, I have to admit that at least a small part of the reason for this posting is the title.

Spam, Hot Spam, Now Only $0.10 Each!

Spam, Hot Spam, Now Only $0.10 Each!

By now, you may have seen news of the report from Ferris research citing the annual global economic impact of spam at $50 billion (apparently the U.S.'s share, $17 billion, is 0.17% of our gross national income). 

I have no doubt that spam is an expensive problem.  IT managers and sysadmins spend lots of time dealing with it, and much hardware, software, and bandwidth are consumed.

But the one number that strikes me as odd in the report is that the economic impact of not having a spam filter (i.e., manually filtering spam, more commonly known as hitting the delete key) is $718 per user per year.  I guess it depends how you measure cost, but since the average user -- not people who live on email like people who, oh, say, work at an email company or who blog compulsively -- only get something like 20-30 emails per day, even if most of it were spam, that cost translates into something like $0.10 per spam.  That's a lot of economic cost associated with a push of the delete key.

Interestingly, the antidote to the $718/year problem is a good desktop filter product like Cloudmark's SafetyBar, which costs something like $30/year.

Everyone's a Direct Marketer, Part III

Everyone's a Direct Marketer, Part III

With every company as a direct marketer, and with (hopefully!) every company embracing some of the best DM principles, what does this shift mean for the way companies will be structured in the future?

First, let's talk about the internal structure of a company.  The biggest shift going on here is that customers are becoming a more important part of all employees' daily lives, not just those in the advertising department.  I wrote an earlier posting called Everyone's a Marketer which applies here.  Most likely, more and more members of your organization are touching customers every day -- and they need to be trained how to think like marketers.

But beyond that, companies will be constructed differently in the future as well.  While not true in some industries, there are many industries founded on the "mass" which will never be the same again.  Here are three examples of how direct marketing is infiltrating -- but enhancing the opportunities of -- corporate America.

- Disney's film unit used to make movies only for theatrical release.  Today, they have an enormous volume of direct-to-video (or DVD) movies that never see the big screen but that drive huge sales numbers when marketed to Disney's customer email database.

- Ralph Lauren used to make Polo shirts with a fixed number of configurations of shirt color and knitting color of the logo.  Now, you can go onto Polo.com and custom build a personalized shirt for someone with the right size and color combination of their college or company or favorite baseball team.

- Barry Diller used to run a studio, then he bought a TV network called the Home Shoping Network (and, I'd add, a lot of people laughed at him for doing so).  He has now turned HSN into InterActive Corp, a true convergence company that mixes content and media with commerce and direct marketing with brands like Match.com, Ticketmaster, eVite, CitySearch, and Expedia.

That's it for this series.  All thoughts and comments are welcome.

Anything Worth Doing is Worth Doing Well, Part II

Anything Worth Doing is Worth Doing Well, Part II

I posted Part I a really long time ago -- it's pretty self explanatory.  I was given a related gem today from fellow blogger Hawaiian leadership coach Rosa Say:

"If you don't have the time to do it right, when will you have the time to do it over?"

Now there's something to keep in mind every time you're doing something halfway!

Now, This is What Blogs Are All About

Now, This is What Blogs Are All About

In case you missed it, this article from Peggy Noonan in today's Wall Street Journal is a great follow-up to my rant yesterday about how blogging isn't going to eviscerate commercial email.  This is what blogging is all about, not replacing marketing tools and techniques.

The Rumors of Email's Demise Have Been Greatly Exaggerated, Part IV

The Rumors of Email's Demise Have Been Greatly Exaggerated, Part IV

This one could also be entitled "What Are The Bloggers Smoking?"

Reports from last week's Blog Business Summit like this one are starting to filter in (pun slightly intended).  This one gets a big yawn from me, even more so than the other times I've posted on this subject, here, here, and here.  I'm as much of a blogger and a believer in blogs and RSS as the next guy -- maybe even more so -- but honestly, people, blogs are going to replace email?

I'd like to address a few critical points here head on, although a large part of me doesn't even want to dignify yet another empty "email is dead" quote with a response.

Basic error #1.  The article seems to confuse blogs with RSS feeds.  RSS feeds are data streams coming into an RSS reader application.  Blogs are web sites.  Hello?!?

Fallacy #1.  Because blogs/RSS are interesting new media, email will go away.  To paraphrase my colleague Mike Mayor, why is it that whenever something new comes along, its proponents have to bash the current paradigm to make their thing seem more important?  Let's go through this one -- TV came along, and people said radio would go away.  Cable came along, and everyone said the networks were toast.  The fax machine came along, and FedEx was said to be relegated to legal documents that needed to be signed personally.  The Internet came along, and people said everything else was insignificant (newspapers, TV, radio, snail mail).  So yes, new media do arrive on the scene and perhaps make a dent in all prior media, but I'm having a hard time thinking of that one comes in and clocks another one mano a mano.

Fallacy #2.  Spam has made email more difficult, therefore email will go away.  There's a whole industry out there fighting spam.  I know, I know, just because we want the problem to go away doesn't mean that we can will it away -- but filters are working better by the day (did everyone catch this posting about Postini this week?), false positives can be managed down by vigilant clients working with vendors like Return Path, and whitelists, whenever they start really working and charging money to clients to guarantee delivery, will still leave email as the cheapest medium for targeted commercial messaging out there.

Naive belief #1.  Spam has harmed email, but blogs/RSS are immune to the same problems.  I'm sorry, do you think the bad guys, or as Fred always calls it, the Internet Axis of Evil (spam, viruses, spyware, DNS hacking, phishing, and the like) are going to leave blogs and RSS feeds alone?  Not a chance.  The bad guys are already hard at work expanding their Axis of Evil.  There's already comment spam for blogs (or blam, as some call it).  People have and can hijack RSS feeds (no cool name yet).  There's Instant Messenger spam (spim).  Last week, I heard about a new one that blew me away, which is that someone figured out how to hijack a Voice Over IP phone call and insert an audio ad/porn into the call (spip).

Naive belief #2.  Blogs are truly interactive.  Other than a couple of very popular blogs during the height of last fall's election, I just don't think this is true for the mainstream.  There are certainly some people who have a little too much time on their hands who spend hours every day blogging, but most people skim most blogs as one-way communication.   While there are mechanisms for commenting, there aren't ready mechanisms for publishing comments back to the blog audience (thank goodness), so this medium hasn't turned out nearly as interactive as people had hoped at the onset.  RSS feeds, in case the writer/speaker was confused in this argument, are completely non-interactive.

Naive belief #3.  People will read blogs with an agenda of marketing specific products and services.  The beauty of the blog is that it's not corporate, and it doesn't have marketing spin on it.  Blogs are much more journals and publishing tools than marketing vehicles.  Who the heck is going to read a blog on Coke?  Or Nike?  Or Microsoft?  Sure, I might read Howard Shultz's blog if he had one (his book was good enough), but that's very different than reading the Starbucks official blog.  Why bother?  Where's the value there?

Ok, I'm done with today's rant.  As I said, I love blogging as much as the next guy, but puh-lease!  And for the record, I do believe that RSS feeds and maybe even IM from marketers/publishers will supplement email and in some cases maybe even replace it, but email just isn't going away any time soon.

A New VC in Town...Sort of

A New VC in Town...Sort of

My friend and Board member Fred Wilson just announced last week the formation of his new VC firm, Union Square Ventures, along with his partner Brad Burnham.  Brad Feld beat me to the "way to go" posting, so while I chime in with my congratulations to Fred and Brad and assert to the rest of the VC/tech blogging world that this firm will succeed famously, I thought I'd comment on two other aspects of Union Square Ventures' formation.

First, NYC has long been a haven for later stage private equity and buy-outs, and there's a big need in the NYC area (even the DC-Boston corridor more broadly) for top tier early stage venture capital players.  While there are fewer core techonlogy companies in the area, there are an increasing number of application and service companies that are building great businesses in this part of the country, and there are not enough great VCs to keep up.  West coast VCs are often (but not always, as I've seen in my investors Brad from Mobius and Greg Sands from Sutter Hill) allergic to east coast deals, and sometimes it's just good to have one of your main investors walking distance away.  Fred and Brad have the reputations, track records, and networks to at least partially fill this void.

Second, as Fred noted in a subsequent posting on Flatiron and its remaining portfolio companies (including Return Path), Fred and his former partners from JP Morgan are not abandoning their prior investments.  This speaks volumes about the kind of people they are and the commitment they have to their entrepreneurs.

I'm sure Union Square Ventures will be successful, and I'm glad I have the opportunity to see it up close.

Everyone's a Direct Marketer, Part II

Everyone's a Direct Marketer, Part II

(If you missed the first post in this series, it's here.)

So, all companies are now direct marketers -- their web sites and email lists make it so, they can't effectively reach their fragmented audience without it, and consumer permission demands it.  Why is this new to some companies and not others, and what lessons can companies who are new at it learn from traditional direct marketers?

First, the quick answer -- it's new because it's being driven by the new technologies the Internet has brought us in the past 10 years.  Those technologies have opened up the possibility for 1:1 communication between any company and its customers that was previously unaffordable to many industries with low price point products.  You never received a telemarketing call for a movie, because making the call costs $3, and all you'll spend on the movie is $10.  P&G never sent you a glossy direct mail piece for toothpaste, because they'd spend $1 at a small chance you'll buy their $2.25 product.  But the cost of a banner ad or a given keyword or an incremental email is so low (virtually zero in some cases), that everyone can afford a direct presence today.

What lessons can companies who are new at it learn from traditional direct marketers?  There are many, but four things stand out to me that good DMers do well that are different from the skills inherent in traditional marketing/advertising:

1. Take the creative process seriously.  Just because you can dash off an important email to your staff in 30 seconds doesn't mean your marketing people should do the same to your customers.  Put your email campaigns or templates through a rigorous development and approval process, just as you would a newspaper ad or radio spot.  There's just no excuse for typos, bad grammar, or sloppy graphics in email or on a web site.

2.  Use live testing and feedback loops.  It's hard to test two versions of a TV commecial without incurrent significant extra cost.  It's impossible to test 20.  But with today's software, you can test 10 versions of your home page, or 100 versions of your email campaign, almost instantly, and refine your message on the fly to maximize response.

3. Make transparency part of your corporate culture.  Just as you can have a 1:1 relationship with your customers, your customers expect a 1:1 relationship back.  If they want to know what data you store on them, tell them.  If they want you to stop emailing/calling/mailing them, stop.  If they want to know more about your products or policies, let them in.  Think about marketing more as a dialog with your customers, and less as you messaging them.

4. Merge content with advertising.  Old-school advertisers didn't have to worry about this one, because their ads were always surrounded by other people's content (TV, newspaper, radio, magazines).  But in direct marketing, your message is sometimes the only message around.  Make it interesting.  Make it entertaining.  I always think the prototypical example of this as the old J. Peterman catalog, which was trying to sell clothing and accessories by creating stories and mystique around each product.  But there are tons of other examples as well, especially around email newsletters.

Next up in the series:  What does this mean for the way companies will be structured or operate in the future?

Doing its Part

Doing its Part

Fred had a good posting on spam today, riffing on a New York Times article that  is very "doom and gloom" on spam and how it's taking over the world.  I'll buy the Times' argument that there's an increasing amount of spam out there these days, but as with Fred, I still maintain, as I did in this earlier posting, that we're out of crisis mode and are on the path to resolution as improved filtering technology and false-positive identification services trickle down to broader usage.

What I think is interesting, though is the amount of criticism that the CAN-SPAM legislation is getting, including in this article from the Times.  It's not a perfect law -- what law, exactly, is perfect? -- but it's starting to do its part.  People in the industry joke that CAN-SPAM means "you can spam," meaning that the law makes it easier for people to spam legally.

But the reality is that you can't regulate something until you've legalized it, and CAN-SPAM is a good first step in the process.  In the Times article is yet another example of how the legislation is starting to work -- Microsoft's latest law suit (one of many filed by Microsoft and others in the past 12 months) against a known spammer. 

No one ever said solving the spam problem was going to be easy.  And no one ever thought there would be any silver bullet -- certainly not a legislative one!  But I argue that CAN-SPAM is doing its part through the enforcement mechanism if nothing else.  And while I certainly hope the next step in the legislation around spam IS NOT a do-not email list, I do hope that there is a successor piece of legislation after another 6-12 months of observing the spam situation and the impact, strengths, and weaknesses of CAN-SPAM.

In the meantime, let's use the tools at our disposal and keep suing spammers...as well as working on industry-based solutions to spam that bring the problem further under control, from filters to authentication to reputation to accreditation.