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May 12, 1999 Event
Opt-In Marketing: Direct Marketer's Dream or Old Spam in a New Can? Just as spam is achieving the infamy enjoyed by junk mail and telemarketing during dinner, opt-in marketing is emerging as an alternative to traditional mass marketing techniques. Learning lessons from court skirmishes over spamming fought by online giants (e.g., AOL, Geocities), savvy online marketers (e.g., Xoom, Yahoo!, NetCreations) are embracing opt-in marketing where consumers can elect to receive specific marketing messages, often in return for goods or services. While mass-marketing campaigns have thrived in the broadcast world, the Internet's one-to-one potential may position opt-in marketing as the online marketers' tool of choice in the future. While opt-in marketing strategies expose real inefficiencies in mass-marketing techniques, they remain an unproven solution. Instilling trust in consumers after generations of impersonal marketing may be an uphill battle for marketers. Cries of privacy invasion have scared marketers into default opt-out strategies, affording marketers the luxury of claiming that, as in opt-in, consumers are in control. The opportunity in opt-in marketing may be to provide consumers with a sense of return on their personal investment in the marketer (e.g., incentives for opt-in consumers). By offering consumers marketing messages that match consumers' interests, opt-in marketers can emerge as e-commerce facilitators rather than electronic nuisances. After years of being hit in the face with interrupt-driven marketing, the gentle shoulder tap of opt-in marketing may resonate better with consumers. However the onus may well rest on Internet marketers to articulate the win-win nature of opt-in marketing as it mutually benefits marketers and consumers. Marketers Losing Taste for Spam
Key Learnings
DEFINITION OF OPT-IN: DO CONSUMERS WANT IT OR TOLERATE IT?
There are two types of opt-in marketing: 1) consent and 2) tolerance. In consent opt-in, users desire the content sent to them and grant marketers permission to send them specific content. In tolerance opt-in, users tolerate targeted messages in return for other goods and/or services (e.g. FreePC).
To date, the tolerance model has allowed the greatest subscriber growth rates via giveaway product promotions. There is adverse selection inherent in such opt-in marketing strategies, however, as those who opt-in for free products, coupons, etc. may not be marketers' choice demographics.
OPT-IN MAJOR PLAYERS: WHO WILL CONSUMERS TRUST?
Users will engage in opt-in relationships with companies they know rather than companies they don't know. Portals are well positioned to establish permission relationships as they have intimate relationships with users. Intimacy leads to trust, and trust is the critical ingredient to the success of opt-in strategies.
Since ensuring integrity and trust is key to the success of opt-in marketing, effective supervision of opt-in marketers will prevent potential spam side effects. Ultimately, legislation could arise that requires email advertising to have the heading "ADV:".
EVOLUTIONARY IMPACT: LIVING IN AN OPT-IN WORLD
Opt-in marketing will further the "great inbox divide" where users have primary and secondary email inboxes. While users today have work and multiple personal inboxes, permission marketing may command an inbox of its own. Users may use standalone opt-in email boxes as a formal way to sift through their targeted marketing messages.
Opt-in marketing differs from marketing in the past as there is an ongoing relationship where marketers must adapt to consumers' changing demands. Marketers must learn to extract value at each stage of opt-in and keep drilling down to find focused customers for specific products. The art in opt-in may be turning tolerance into consent, as consumer pull models gain favor over marketer push models.
QUOTES OF THE NIGHT:
"Permission marketing will be an arms race between our ability to create filters and marketers ability to get around filters."
"In opt-in, marketers need to make an effort to understand consumer interests, not just their email addresses and database profiles."