A-Clue.Com
by Dana Blankenhorn
Volume III, No. XXXV
For the Week of August 30, 1999

This Week's Clue: The PR Revolution

This Week's Clue: The PR Revolution

Shameless Promotion 

SSP (Shameless Self-Promotion)

Business Model Needed

Trouble Ahead, Trouble Behind 

Protect Me From My Friends

Clued-in, Clueless

Nostalgia ruled at the Jupiter Online Advertising Forum in New York a week ago. The technology headline was the perceived success of "Superstitials,"  which let ad agencies create something akin to a 30-second spot. Unlike "interstitials," which fill a screen and drew a horrid user reaction, superstitials can be small, and can be clicked-away, so if the ad agencies can earn attention with creativity and information they can go back to doing what they know best - TV ads.

Nostalgia was at the heart of McCann Erickson WorldGroup chairman John Dooner's "interview" keynote on the forum's second day. Dressed in a mismatched jacket and slacks, with an open-necked shirt, he told his suit-and-skirted audience that the Web is just one medium among many, a sideline the agencies can learn and buy their way into. After all, he said, look at how all the "dot coms" are buying TV and print ads - obviously the medium is inadequate. 

Nostalgia was also at the heart of the first day's sessions, where Tim Koogle did his Yahoo act and a panel of Web ad managers preened over their power. Of course, this was nostalgia of a different sort, for the Web as it was a year or two ago. Back then, the Web represented a new lifestyle, a true challenge to other media, something unknown, misunderstood, and (almost) unknowable. That view (as you can tell) is also a way of looking backward

Let me repeat Edison's Clue one more time. It isn't about the Web, but a single worldwide network. It's the Internet, stupid. The Web is only its most public face, its chief interface, linking all the Internet's applications to the user. The most powerful commercial application today is not HTML, it is not e-mail, nor is it even streaming-background-PointCast. It's databases. Amazon is a database, Yahoo is a database behind an index, and all this online-offline integration the folks were talking at the Jupiter Forum is based on linking Web log and customer databases. 

The database interface revolution will continue for some time. Behind it, I'll submit, is true permission marketing. E-mail can obtain and renew permission, but only the shrewd use of databases gives a business the ability to use that permission intelligently. A shrewd use of databases lets a marketer understand how best to approach a prospect, about what they want to buy, and about what permissions they really have. (A database is an outgoing spam filter.) A true understanding of your database on a prospect gives you what a good lover has, an intimate knowledge of what to say (and what not to say), how to act (and how not to act), what to propose (and what not to talk about). Such a relationship is mutually beneficial, but any successful relationship requires mutual effort. It ends when the customer says so, and there may be nothing you can do about it - they may never tell you why. If you persist too hard in demanding answers, or trying to get back together, the word for you will be stalker

Which leads me to the next revolution the Internet is making possible. That revolution is one of ethics. Most successful businesses are highly ethical, and one result of their ethical behavior is goodwill. When challenged, a smart business will defend its ethics, but even here history shows care must be taken. Attacking your critics, as GM did with Nader and as Microsoft did with Justice, won't protect your goodwill. Sometimes, as Coca-Cola did with New Coke, you apologize for something you didn't really do wrong. Much of the art we call public relations involves dealing properly with such a crisis, but the day-by-day practice of PR is the steady brick-by-brick construction of goodwill.

When public relations was born, its practitioners were called press agents. More recently politics has created a new form of the discipline, one business has taken to heart, recognizing that what counts is everyone's relationship to you (not just reporters). My point today is the Web will allow marketing and public relations to merge. You can know your customer as a good PR man knows the reporters on his beat. You can also serve them as well as the best in that profession serve me.

In our 21st century lives we're all reporters. You're all PR. You can know us, care about us, build a relationship with us based on mutual respect, or you will lose us. 


Shameless Promotion
 

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SSP (Shameless Self-Promotion)

Last week's issue may have been the most controversial yet. Not only did I hear it from anti-government types (expected), but I was rightly chastised by those whose .coms were obtained outside the U.S. One thing I won't apologize for, however, is the economic dilemna. We face an artificial shortage of domain names based on an artificially low price, and a system that not only allows for but encourages hoarding of a scarce, cheap resource.

I currently write regularly for ClickZ (http://www.clickz.com), and appear every Saturday at 6 Eastern on TechEdge Radio (http://www.techedgeradio.com) in Phoenix, Arizona. I write monthly columns for  NetMarketing, Boardwatch, and  Intellectual Capital. Watch for my series soon on VoxCap. The lead item here is also the Monday e-commerce column of Andover.News. You can still buy my book . Subscription instructions are at the bottom of each issue.

Remember that it's still journalism -- checking the news, calling people, listening carefully and writing on deadline -- which keeps the Clues coming. If you're looking for excellent work, give me a call at 404-373-7634. Now back to the show...


Takes on The News

Business Model Needed

This technology makes many things possible, but those things that lack a business model will fail. In a capitalist system, they deserve to fail.

This brings me to news that Echo, the East Coast answer to The Well, is up for sale. The rumored buyer, Avi Glaser's Zap.Com is like the real estate speculator in a bad neighborhood, figuring that if he gets enough nothing for nothing he'll have something. If someone eventually wants to build something on his nothing, or the market turns around generally, that real estate speculator can come out golden. What usually happens, of course, is he (or she) becomes a slumlord.

Now that last paragraph really insults Horn (it merely describes Glaser). The fact is she never built a compelling business model around her traffic. She didn't sell enough ads, and she didn't sell her audience enough stuff. It was the Web version of a hippie commune. It built great memories, it was a great time. But in business, that's not good enough.

Trouble Ahead, Trouble Behind

eBay became an "Internet blue chip" by seizing a dominant position in the market for personal auctions. Keeping that lead requires that it maintain the trust of millions of buyers and sellers.

I've argued before here that eBay isn't spending enough time and money doing that. Frightening holes have appeared (http://mars.superlink.net/jason/ebay/), threats to the integrity of its auctions, and eBay hasn't done enough to stem them. In its desire to avoid trouble, eBay has pulled-back from auctions of tobacco, guns and spirits, and now stock is (perhaps rightly) off-limits as well .

What's worse is that eBay is angering its most important constituency, its sellers. As is true in real estate, the lifeblood of the auction business is in listings. (Unlike the situation in real estate, you don't get another shot when another agent takes the listing.) Changing the rules (even for good reason) without notice angered many, and its latest move back from those rules is a half-measure that will please no one.

The fact is that eBay never thought through all the implications of its business model, and decided to make things up as it went along. Each decision it makes chips away (a bit) at its goodwill, goodwill rivals (Yahoo, Amazon, vertical markets in terms of merchandise and geography) are happy to scoop up. What's most needed here is a "SimCity" for corporate management, something that will help people understand the implications (and problems) with business models as they grow. Sounds like a great opportunity for an enterprising b-school, don't you think?

Protect Me From My Friends

One of my favorite Abraham Lincoln quotes is the one about needing protection from his friends more than from his enemies. Sometimes, in defending free speech online, I feel the same way.

Bertelsmann's decision to use German standards in choosing what speech to ban is its own business problem. Far more serious is the chortling of the Wiesenthal Center's Abraham Cooper over the decision, and his condemnation of U.S. booksellers for their refusal to ban "Mein Kampf" here. He actually called the First Amendment "smoke and mirrors and legalisms." If principles only protect your friends, Rabbi, they're merely conveniences.

Equally foolish is Kris Haight, who grabbed the "Godhatesfags" domain through a forging of InterNIC records , and then wouldn't give it back. (His boss finally made him .) Turning your enemy into a martyr lowers your goodwill and raises his.

What angers me in both these cases is that they're unnecessary. Lies and hate will always be with us. Driving hate underground gives it a cachet, and attraction, it doesn't deserve. (As Tom Lehrer put it, "I know there are people in the world who do not love their fellow human beings and I hate people like that." ) In other words, you can't make people love one another. Trying to do so makes you a hater, too. Besides, enforcing any ban on speech is impractical, unless everyone agrees the speech is a clear, present danger (as in child porn). Even then, enforcement is very, very difficult in the age of the Internet (that's why we must pick our causes carefully). Expanding the list of banned speech to "anything the power doesn't like" is a recipe for disaster - for the Net as well as the world.

Clued-in, Clueless

Clued-in is PSINet's $705 million purchase of Transaction Network Services . PSI has never executed as a consumer outfit, but does well with infrastructure, and this can make it a full-service Commerce Service Provider (competing with CyberSource, ICOM, and others) as well as a backbone provider.

Clueless is Bertelsmann Online, which pulled Hitler's "Mein Kampf" worldwide in reaction to protests that its availability violates German law. They've also gone into auctions - don't ask it to auction your copy of "Mein Kampf."


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