(art) RE: permission marketing
Consumers exhibit revealing behavior E-businesses have found people freely offer a wealth of personal details - if they get something in return.
By Kristi Heim
KNIGHT RIDDER NEWS SERVICE
How many people would give an Internet marketing company intimate details about their lives - the names and birth dates of their children, how
much money they save each month, their health concerns, and even the license-plate number and mileage on the family Honda?
The answer: about 11 million, in the case of just one company that has found a way to persuade Americans to trade their personal information for
advice, cash, or $5 off the purchase of a new diet plan.
At a time when surveys show Web surfers are worried about companies building huge databases about them, a growing number of online
marketers have found they can collect the most revealing details about people simply by asking for them.
"Because the Internet is a more intimate media, it plays by different rules - the first rule is permission," said Jim Nail, senior analyst with
technology research firm Forrester Research Inc. "If you want something from me, tell me why and what you're going to do with it. Show me a
reason why giving up this information will improve my life."
That's what LifeMinders.com, WinWin.com, MoneyforMail.com and other companies in the growing "permission-based marketing" industry are
trying to do.
Virginia-based LifeMinders raked in $14 million last year minding other people's business. It sends personalized e-mail greetings reminding
registered users of anniversaries, telling them when it's time to prune the roses, warning parents about a recall of their children's toys or a breakout
of Lyme disease in their neighborhood.
That's a hook that has prompted 500,000 people a week to sign up as members, "opt in," and volunteer dozens of pieces of personal information on
questionnaires tailored to the topics that interest them.
Take Joan Schramm, 46, a performing-arts center manager in Washington, D.C. - one of several users whose names the company provided with
their approval. She has used LifeMinders for a year and has no qualms about giving the company details about her income, savings, car, pets,
recreation and travel.
The messages remind her to get her oil changed and how to prepare taxes and research stocks. She even received notices about two recalls on
her 1999 Ford Explorer.
"I found I wasn't getting all kinds of weird stuff, so gradually I signed up for more," she said, adding that she was not too worried about her
personal data being abused.
"People are out there scrounging trash cans finding information, too," Schramm said. "There's a point at which you would not want to make
yourself crazy worrying about it."
But she draws the line when it comes to giving her data to another company. "I'd be seriously upset," she said. "They said they wouldn't do that."
Krista Linza, 27, a sales representative from Virginia, says she relies on her daily LifeMinders notices for information on disciplining children,
buying gifts, remembering to take vitamins, and finding out what movies to see. "You don't have a lot of time to read anymore," she said. "I get a
lot of interesting news and articles that make me a more well-rounded person."
She and the other 11 million LifeMinders users also get a lot of advertising.
The company makes its money by wrapping ads around the reminders. Companies that have signed up include Healtheon/WebMD, Home Depot
Inc., Ralston Purina Group, Borders.com, Bank One Corp. and Onmoney.com.
All of those companies are eager to target their ads to the people most likely to buy. Dog owners, clearly, are more inclined to buy Purina Puppy
Chow than someone who doesn't own a pet.
That same strategy is what's driving online advertising companies such as DoubleClick, which track Web surfing patterns in an attempt to serve up
more relevant ads. The big difference: DoubleClick collects information on surfing habits without the user knowing, and the company isn't offering
the kind of special inducements that LifeMinders and others do for those kinds of detailed data.
DoubleClick became embroiled in controversy when it planned to match Web-surfing behavior with millions of names and addresses in an offline
database. Bowing to pressure from privacy advocates and consumers, DoubleClick has scrapped those plans.
While LifeMinders says it doesn't share members' names and addresses with anyone, it does give advertisers a direct channel into mailboxes. The
company guarantees that each advertiser appears in millions of personalized messages each month. Advertisers can tell whether the message was
opened and get a breakdown of the readers' ages, genders and income levels.
Other companies seeking to capitalize on this kind of marketing include MoneyforMail.com and WinWin.com.
"People are perfectly happy to give out personal information as long as they get something back," said Kieran Clifford, chief executive of
WinWin.com.
Consumer dissatisfaction with online ads is evident in declining click rates, he said. Providing financial rewards to viewers is one way to make
advertising more efficient, he said.
On the WinWin Web site, consumers fill out a personal profile and questionnaires related to their interests. They can then collect 20 percent of the
value of the advertising they read. A banner ad costs the advertiser $1, so the consumer who clicks on it gets 20 cents. If the consumer simply
mouses over the ad, he or she gets 10 cents.
"The reward is just incidental," Clifford said, adding that the company filters out people visiting just for money by measuring the time they spend at
the site. "We make no secret of the fact that we use a cookie. It can actually make your experience better if it's used ethically."
Consumers can see what information is collected on them and change or delete their profiles anytime, as they can on the LifeMinders site.
Databases containing their names and addresses are on a separate computer in a different location from the one on which their profiles are held.
Advertisers can see data on WinWin's Web site and zero in on their target customers. They can then send banner ads to those specific customers.
Far from the depersonalized shopping experience of strip malls, Clifford says the wave of the future is creating an intimate experience connecting
the business and consumer.
"Eventually, every business in America will be able to reach its target customer," he said. |
