by Dana Blankenhorn
Volume IV, No. XXI
For the Week of May 22, 2000

This Week's Clue: Building the Right Circulation

This Week's Clue: Building the Right Circulation

SSP (Shameless Self Promotion)

Yahoo! Are We Still Special?

Nationalism vs. the Net - How Government Hurts

Exchanges vs. Vendors - How Government Can Help


Clued-in, Clueless

It's no longer enough to quote how many registered users you have, or how many are on your mailing list. Whether your audience consists of cement companies or hot-rod enthusiasts, it's no longer how many you know but who you know.

This is great news. This is a problem we can solve - with enough money.

I've said before that the entrance of direct marketing discipline is the big Web story of 2000. If you believed me then, believe me now, and be prepared to invest in it.

First, call some list brokers. Direct mail lists are a big, functional, profitable, and legitimate business. (All the biggest brokers  have Web sites, too.) You can buy lists of magazine subscribers, you can buy lists of trade group members, or you can buy lists of club members. These lists will cost you roughly 60 cents per name -less than one-third what comparable e-mail lists will cost you. But they don't include e-mail addresses.

Your job is to build a paper letter (they call it an "envelope" in the trade) that will win you a substantial portion of those e-mail addresses. (The average envelope costs between 50 cents and $1, postage included.) You can't offer a "free subscription" the way a magazine might - you're already giving that away to anyone who drops by. Free listings in a directory? Free e-mail boxes for the target's staff? Puh-leeze - everyone knows these are free goods. No ordinary e-mail newsletter is going to get the job done, either.

There are two basic options here. You can play on greed, a contest with a great prize. Or you can play upon fear, an editorial letter with valuable information. Marty Chenard  likes to use the word "course" to describe his newsletter, and I find it wonderfully explanatory of what you're trying to offer. (Call it the course on taking your business global, or the course on building your Web business.) You may be able to buy this content on a syndicated basis. Obviously you test these lists, to see where you'll get the best response on the main list. And you test the content, to make sure it's right for your readers.

The goal is to match the list of industry members with your collection of e-mail addresses. The more industry participants you have direct contact with, the more valuable your business becomes.

This is the chief asset the business trade press retains over you. You can actually do a lot more from an editorial perspective, by providing the services competitors' stories only hint at. Marketplaces, distributorships, shared insider perspectives - whatever your business plan may be, you can get closer to the money online than in print. If you can even approach the reach of these trade press competitors, your improved services will kill them.

Now, understand that this is a long-term proposition. The returns on even the best lists are no more than 5-10% -- maybe you can goose that up if you encourage responses via e-mail, but this is still something that will take time. (Consider buying a phone list, matching it against the mail and e-mail lists you have gotten and trying to follow-up that way.) But it's this discipline that will grow your business.

It's not how many names you have, but which names you have that counts. Our list isn't big, but you read this letter closely and that's more important. This is a key Clue. And it takes discipline to get the right names, along with investment, testing, and long-term planning. Apply some direct mail discipline to your Web business and watch it take off. 

SSP (Shameless Self-Promotion)

I'm always making myself available for consulting to a limited number of clients, with an eye toward assuring their long-term success. If you're interested give me a shout at 404-373-7634.

Also, please pass this along to friends and urge them to join our list. And don't forget our new e-mail address .

I write daily for ClickZ, and weekly at Andover.News. I write monthly for  NetMarketing, Boardwatch, and  Intellectual Capital. I've been in Advertising Age and the Chicago Tribune .Once every other month I'm in CLEC Magazine. You can always buy my book . Subscription instructions are at the bottom of each issue.

Remember that it's journalism that keeps the Clues coming...

Takes on the News

Yahoo! Are We Still Special?

With Lycos due to be bought by a unit of Spain's Telefonica , Yahoo is now the last publicly-traded "pure play" in what used to be called the portal business . Excite is paired with @Home and has AT&T as a controlling shareholder. The former Infoseek is now part of ABC's Go Network. Microsoft is a software company. The fastest-rising portal is probably NBCi, a network owned in turn by General Electric, which is worth even more than Microsoft.

So maybe it's time we took a harder look at Yahoo.

I no longer use Yahoo's search engine. I can get Inktomi results plus a lottery ticket, and there are better search engines out there, anyway. Yahoo is not the leader in free e-mail, its Geocities free Web page business is going nowhere, and Broadcasting.Com has produced nothing more than another idiot NBA owner . Yahoo's financial section has been trumped, and there are better discussion boards. Elvis  has left the building, perhaps in an argument over Yahoo's "opt-out" e-mail marketing policy. In terms of Internet law Yahoo can't win, either.

What's left is the brand. The brand is powerful. The brand draws users. The brand also continues to draw content . But there's a limit. Portal placement deals are coming under new scrutiny . At @d:tech a few weeks ago I heard many complaints over Yahoo forcing advertisers to go through its Yahoo Store in order to get placement - that's a game that's bound to end.

The old idea of a portal is simply breaking down. Yahoo can continue to do well by taking its show on the road  but that can't work forever. Just as specialty sites have topped Yahoo in the U.S., so local sites will eventually do that in any markets it targets . If Yahoo can't lock up some valuable content, provide a new exciting and exclusive service, or do something else really remarkable by the end of this year (and maybe sooner) they will look SO 20th century.

Nationalism vs. the Net - How Government Hurts

Nations and states are accustomed to controlling what goes on inside their borders. The Internet destroys that. So nation states are fighting back.

The most popular solution is the Chinese one . License and threaten everyone, insist on local access and control that access. Australia isn't the only democracy to take this route - Switzerland is now doing it as well , forcing blocks on all Web material the police don't like.

The key to forcing tyranny down the throats of good people is to dehumanize the "other" as unworthy of trust (or connection). The U.S. press is now engaged in that exercise . Third World users are being demonized as bad people infecting our network - as though the Internet belonged to us.

In fact, the Internet works because it belongs to no one. Without that assumption none of it would have happened. The Internet is based on the simple proposition that, by and large, most people are OK, and should be free to talk with, listen to, and engage in commerce with one another. Those are principles worth fighting for. Its opponents should be, will be, and must be identified.

Exchanges vs. Vendors - How Government Can Help

The keys to a successful marketplace are liquidity and transparency. These two values are related. Lots of players with lots of money provide liquidity. But strict rules - especially on conflict-of-interest - rigidly enforced provide transparency. The more rigidly exchanges enforce their own rules, the less rigidly government has to.

In the absence of rules from either exchanges or governments, corruption reigns, along with cycles of boom-and-bust. American history before 1933 is filled with such busts, called "panics," which toppled governments and drove millions into poverty with the regularity of forest fires or earthquakes.

Over the last two years hundreds of b2b exchanges have sprung up based on the promise of transparency. Over the last few months dozens of major buyers in major industries have built competing exchanges, withholding their liquidity and leaving several exchanges stillborn.

Exchanges will not succeed unless they have both liquidity and transparency. The vendor-driven "exchanges" built by auto makers, hotelkeepers, and others are nothing of the kind. They can accept regulation (governmental or otherwise) and become exchanges, or the exchange movement may die. Here's where our Department of Commerce can use some State Department skills. Negotiate first, and regulate only if necessary. (But be aware it could become necessary.) That's my message for the FTC .


Everyone makes mistakes, but we try to correct them as well. There was a mistake in the link on our "clued-in" feature about Howard Cohen. He's at C3F.Com, not 3CF.Com.

We apologize for the error.

Clued-in, Clueless

Clued-in is Oracle Systems and its new bid to build "portlets" for clients with re-usable parts. Of course, now that Larry Ellison's fortune is on a par with that of Bill Gates such deals should come under close Department of Justice scrutiny.

Clueless is Irwin B. Schwartz, managing partner at the law firm of Schwartz & Nystrom . The ignorance of his Boston Globe editorial on the Mattel-Cyber Patrol case is awesome to behold, and should be maintained online for the rest of his career. Special shame to the Globe for not identifying Schwartz' role in the case at issue.

A-Clue.Com is a free weekly email publication registered with the U.S. Copyright Office as number TXu 888-819. Subscribers can receive either a .txt file or .htm file. The .htm version features links that become active from inside a browser. To take your name off the list, simply write REMOVE as the subject, or content, of a message replying to any issue. To request your free copy, write us at Dana@a-clue.com  or +A_Clue . To subscribe you can also write to mailto:a-clue@list.audettemedia.com with the word "subscribe" in the subject. (Address your request for the .txt version to a-clue_textonly@list.audettemedia.com . You can unsubscribe with a note to the same addresses and the word "unsubscribe" in the subject.. We're on the Web at http://www.a-clue.com/and http://www.ppn.org/clue.