Permission, Advertising and Free

I finished reading the book Permission Marketing by Seth Godin. I’m a fan of his blog so I got his book for 5 bucks used off of Amazon.com

Traditional advertising is the science of creating and placing media that interrupts the consumer and then gets him or her to take some action. The problem is that the amount of advertising begging for your attention has increased. As the clutter has increased, advertisers have responded by increasing the clutter. Permission Marketing is based on the premise that the expense of interrupting potential customers can be leveraged into multiple interactions. The internet threatens the traditional form of interruptive advertising because there are millions of pages instead of just a few TV channels. This is a very big haystack and advertisers don’t have that many needles.

Although, advertisers wish the internet was like a TV, where they could control what people see. This strategy is based on an old-media worldview in which we are all masses that can be bought and sold. Microsoft - like too many advertisers and media companies - thinks we think of the internet as just another TV. It believes it can own content and technology when, in truth, we own it now. It shows in their work to thwart the threat of DVRs. In a New York Times article, the ABC network is establishing an on-demand video service that would allow viewers to watch ABC shows like “Lost” and “Desperate Housewives” any time they choose. The catch: It uses a new technology that disables the viewers’ ability to fast-forward through commercials. Also a Wall Street Journal article talks about how advertisers are trying to make their ads stick even when they are being fast forwarded. Obviously Godin’s observation is true, the mass market is dying. The vast splintering of media means that a marketer cant reach a significant percentage of the population with any single communication.

There are two metrics in advertising: reach and frequency. Reach is how many people see it and frequency is how many times it is seen. No single ad, no matter how well produced, is never enough to sell you product. You need frequency to earn trust and you need trust to sell. With larger reach, the percentage of ideal customers that are interested in your product will be very small. A lot of money is wasted on people who are not in the market for your product. Permission Marketing makes frequency work. It encourages the commitment and frequency that made mass marketing work years ago. But it replaces continuing interruption with ongoing interaction.

Godin’s idea is to first interrupt the customer but then engage them in a bargain where the customer opts-in. They opt-in by signing up for your newsletter, registering at your site or adding you to their rss feed. They opt-in because of some kind of bait or offer that you give for free. Chris Anderson wrote an article about free in which he says that today it's digital technologies have become too cheap to meter. The traditional free sample is the promotional candy bar handout or the diapers mailed to a new mother. Since these samples have real costs, the manufacturer gives away only a tiny quantity — hoping to hook consumers and stimulate demand for many more. But for digital products, this ratio of free to paid is reversed. A typical online site follows the 1 Percent Rule — 1 percent of users support all the rest. In the “freemium” model, that means for every user who pays for the premium version of the site, 99 others get the basic free version. The reason this works is that the cost of serving the 99 percent is close enough to zero to call it nothing. In another post by Godin, he gives reasons why someone would pay for something when it can be free.

Then after the customer has opted-in and the exchange of data with the customer has taken place, you then teach and eventually leverage the permission you’ve obtained with them. By continuing the dialog, you can teach the customer until a stranger becomes a friend and then a friend becomes a customer. If you offer something that is genuinely of interest of the customer than they will look foreword to your messages. Inviting people to opt-in to become their friend and then a customer won't reach everyone. In fact, it will reach almost no one. But that's fine if the few people you do reach are the people who are looking for you.