by Dana Blankenhorn
Volume V, No. XXXI
For the Week of August 6, 2001

This Week's Clue: The Forgotten Principles of Permission Marketing

This Week's Clue: The Forgotten Principles of Permission Marketing

SSP (Shameless Self Promotion)

SP (Shameless Promotion)

Criminalizing Political (and Market) Differences

More Unenforceable Law

Time for .Kids?

Clued-in, Clueless

The Internet has entered an era of pop-up, pop-under, and pop-over ads, of increasing intrusions into your browsing sessions by sites desperate for cash and advertisers who see repetition as the key to sales. 

A key principle is lost and ignored in these campaigns. That principle is permission.

Permission Marketing does not and never meant permission to spam, which is how e-mail marketing companies defined it (and how "direct marketing" companies still define it). The permission to make a pitch is the lowest form of permission in any case, bought in the past by the Fuller Brush man with a free sample. 

Your goal as a marketer is to increase permission, and eventually to make it automatic. You move from permission to pitch to permission to sell, and then seek to automate the purchase with frequent-purchase premiums (that must be redeemed), with on-approval deliveries (that might be returned), and finally with a subscription.

The permission I have with you is of a very high level, but it's also very limited. You subscribe to a-clue.com, giving me permission to address you every week. It's a permission you can take away at any time and (most important) it's permission with no financial strings attached. 

Would you give me annual permission to take money from you (if you bought a subscription) and would you give me regular permission to take money from you (through a monthly fee)? I'm not asking, but you should be. Moving toward automatic subscription, to "intravenous permission," should be the ultimate goal of the permission marketer.

This is what AOL Time Warner has achieved, and "intravenous permission" is at the heart of its business model. All of AOL's 30 million "members" deliver some form of this permission (regardless of their pricing plan), because the "switching costs" of losing contacts and data they've put into the system always exceed its price (and hassles). Permission marketing doesn't have to be a perfect relationship - you may hate the cable company (and Time Warner is the cable company) or get mad at the magazine (Time Warner is, at heart, a magazine company). The fact that you continue to give your permission to them (in the form of money) is all that really matters. 

AOL Time Warner's business plan is to use whatever permission it has as a lever to gain more. Its magazines don't pay for those "pop-ups" selling subscriptions on CNN.Com, and AOL doesn't pay (much) for the diskettes that are poly-bagged inside each issue of "Sports Illustrated." The extra cable ad spaces on Time Warner Cable are given over to other AOL Time Warner properties - movies, TV networks, cable programming, AOL, magazines - the advertising is free and self-reinforcing. The idea is to break you down and gain permission for AOL Time Warner to supply all your entertainment and information needs, in all media, and (most important) for you to pay for the privilege. The idea is to leverage one subscription into two or three or more. 

Microsoft is now aiming at the same thing . It wants you to subscribe to its software, to its ISP, to music offerings, and to more. If it's getting into your wallet automatically, it's not nearly as hard to get in deeper than it was to get in there in the first place. 

This should be the road we all head down -- not the road of interruption. Ask yourself some hard questions. What permissions do you have with your prospects and customers? What incentives can you provide for increasing them? How can you make the extraction of money from their wallets automatic and self-reinforcing? If you have such permission, how can you increase the permission by offering enhancements? 

The leaders haven't forgotten the Principle of Permission Marketing. Nor should you. 

SSP (Shameless Self-Promotion)

"Living on the Internet: How to Make Money, Live Right, and Fight For the 21st Century" is still on course. I have a draft complete, it's a few weeks from being completely edited, and I've signed a contract with an agent  for electronic distribution. I'm hoping to add a monthly newsletter as an up-sell, available free to all buyers of the book. Drop me a note to get on the mailing list for more information.

You can join the A-Clue.Com discussion at I-Strategy , our shared e-mail digest produced with Adventive.Com. You can also read me at ClickZ , B2B, at Boardwatch, ISP Executive, Sitepoint  and the new (paid) version of WorkZ. More deals are being sought. Remember that it's journalism that keeps the Clues coming...

Shameless Promotion

You have a little list, but how do you make the most of it? You turn it into a database, you query the database, you audit the results and you deliver market research to yourself and to others.

Permission is just the first step. An audit is the second step. Building interactive relationships with every name in your database is the greatest business asset you can have.

You can take the first step toward making your little list truly valuable with help from my friends at Whitehat Interactive - click here to begin that journey.

Takes on the News

Criminalizing Political (and Market) Differences

U.S. policymakers have used the magic word (porn) as they prepare to sic the criminal law on users of file-sharing systems like Gnutella .

Unlike Napster, which was designed solely to share MP3 files, systems like Gnutella or Bearshare  allow the sharing of any file under any keyword. Many of these files are pornographic images and video clips.

The "warning" from the House Government Reform Committee is that censorware doesn't work on Bearshare and thus "kids" will see "hard core porn."

First of all, we're talking about teenagers, not children. Eight-year olds aren't going to download and install an application of dubious legality, then enter a keyword targeting dirty pictures, download those pictures, and decode them. We're talking about 15 year-old boys with raging hormones turning to Bearshare because dad let his subscription to Penthouse lapse.

The idea will be that since Bearshare can't prevent "kids" from being "protected" from "porn" it must be banned. But the underlying idea of Bearshare (and Freenet, which encrypts its transfers) is illegal under the DMCA. Porn, thus, is just an excuse to enforce the unenforceable, and drive a larger share of the U.S. Internet underground.

This is a warning to all censors, no matter their cause or political affiliation. An underground economy can't grow the real economy. Driving the Internet economy underground guarantees that the current recession becomes a true Depression, combining the worst of that era's economic horrors with the worst of the Prohibition that preceded it.

The solution is to find ways in which to make file-sharing legal, to create economic models that pull 99.9% of this traffic aboveground, and only then to turn on law enforcement for the rest.

But if you think anyone in any party is listening to reality, think again.

More Unenforceable Law

While we're on the subject of legal over-reaching, let's hear it for Democrat John LaFalce . He has introduced a bill that claims to halt Internet gambling by forbidding the delivery of checks, credit card receipts, or other bank instruments aimed at paying losses run up on Internet casino sites.

Earth to Congress: Internet casinos take money up-front. You don't play until you pay. At best you're talking of passing U.S. law that takes foreign companies (operating legally in their home countries) outside the banking system, a job that should be done by treaty. At worst you're talking about closing the barn door after the horse has run away.

The gambling industry has given up trying to reason with this kind of stupidity. The MGM Grand has filed for a gaming license on the Isle of Man, which plans to license three Internet casinos with easy access to the European market. Nevada has passed enabling legislation for Internet gambling, and some are already predicting the whole industry is inevitable . The train has left the station, Mr. LaFalce. You can find a way to get on board or you can get run over - your choice.

Time for .Kids?

Not all the ideas coming out Washington these days are ridiculous.

Republican John Shimkus of Illinois and Democrat Ed Markey of Massachusetts have offered a bill that would require ICANN to create a domain called .kids. Instead of trying to keep out online pornography through the use of censorware, they ask, why not create a safe domain where kids can play?

To those who argue that ICANN should not be in the business of policing who owns domains, that train has already left the station. The .museum and .aero domains both require that registrars police content to some degree. While it might seem impossible to isolate pornography in a .sex domain (because you can't define sex that explicitly - is Planned Parenthood .sex) there is no reason why a registrar couldn't create a .kids domain, and enforce any requirements they want through a contract.

Kidsdomain.com was one of many companies that sought permission from ICANN to create and run a .kids domain last year . But ICANN's staff rejected the proposals. The Shimkus-Markey bill seems designed to press ICANN to reconsider.

Such a domain would have many advantages. The COPPA law (controlling how information obtained from kids is used by online companies) could be applied to all .kids domain holders. There are lots of companies that are very active online who would flock to such a domain. Censorware in elementary schools could be set to block everything outside that domain. The most interesting argument I've heard against it, in fact, came at the bottom of a German review of the question . The story called the proposal a "visible voucher for U.S. dominance over the root system of the Internet."

But the more I think about it the more I like it.

Clued-in, Clueless

Clued-in is Judge James M. Rosenbaum, chief judge of the United States District Court for the District of Minnesota, in Minneapolis . His brief article questioning the untrammeled "right" of employers to snoop on employees' computer use is brilliant and long overdue. Productivity is being trampled in the name of legalistic "safety," and it's past time someone in the law came to the defense of the economy.

Clueless is the U.S. government , which seems intent on treating the precious .US national domain with all the responsibility of Tuvulu. The idiocy of this Administration (even as the domain name market collapses) reminds me of Celine Dion's song from the movie "Titanic." It just goes on-and-on.

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