Feeling Less Like a Luddite:  Welcome, Meebo!

As I’ve written about on occasion (here, here), it’s easy to feel like a Luddite with the rapid pace of change of the web these days.  Anyway, I’m feeling slightly less like one today with the addition of Meebo to my blog.

I read about Meebo in David Kirkpatrick’s Fast Forward column last week, and it was such a cool idea, I had to install it right away.  Basically, it adds a widget to the right sidebar of my blog which allows readers to Instant Message me any time I’m online if they’re reading my blog (anonymously, I think, and regardless of whether or not they have a Meebo account, although I needed to create one in order to install it on OnlyOnce).

Having a Meebo account is also basically like having a web-based version of Trillian, so I can get on IM from any computer with a browser at any time.

Should be an interesting way to hear more from readers.  We’ll see.  Meebo Me!

Book Short:  It Sounds Like it Should be About Monkeys, Doesn’t It?

The Long Tail, by Chris Anderson, is a must-read for anyone in the Internet publishing or marketing business.  There’s been so much written about it in the blogosphere already that I feel a little lame and “me too” for adding my $0.02, but I finally had a chance to get to it last week, and it was fantastic.

The premise is that the collapsing production, distribution, and marketing costs of the Internet for certain types of products — mostly media at this point — have extended the traditional curve of available products and purchased products almost indefinitely so that it has, in statistical terms, a really long tail.

So, for example, where Wal-Mart might only be able to carry (I’m making these numbers up, don’t have the book in front of me) 1,000 different CDs at any given moment in time on the shelf, iTunes or Rhapsody can carry 1,000,000 different CDs online.  And even though the numbers of units purchased are still greatest for the most popular items (the hits, the ones Wal-Mart stocks on shelf), the number of units purchased way down “in the tail of the curve,” say at the 750,000th most popular unit, are still meaningful — and when you add up all of the units purchased beyond the top 1,000 that Wal-Mart can carry, the revenue growth and diversity of consumer choice become *really* meaningful.

The book is chock full o’ interesting examples and stats and is reasonably short and easy to read, as Anderson is a journalist and writes in a very accessible style.  You may or may not think it’s revolutionary based on how deep you are in Internet media, but it will at a minimum help you crystallize your thinking about it.

Email Marketing Good and Bad:  Case Study Snippets

I had a good meeting this morning with one of our long-time multi-channel retailer clients who is in town for Shop.org’s Annual Summit.  Over the course of our conversation, she relayed two things going on in her world of email marketing at the moment that bear repeating (with her permission, of course).

First, the good.  In a recent study, our retailer hero determined that customers who receive their email newsletters and offers (not even open/click, just receive) spend on average 3x as much on in-store purchases than their non-email counterparts in any given week or for any given campaign.  Talk about deriving non-email or non-click value from your email marketing efforts!

Second, the bad (ok, well, it’s the ugly as well).  Our retailer hero was just nailed by Spamhaus because someone out there complained about a transactional email he or she received from the retailer.  She estimates that the poor Spamhaus listing is costing her millions of dollars a year in lost sales from regular customers.  The email was literally about a refund that the retailer owed the customer (why there was a complaint — who knows?).  What did Spamhaus suggest the retailer do?  Repermission their list around transactional messages — “or else.”  Seems to me that that’s a pretty tough stance to take on rather shaky evidence and with no appropriate dispute resolution mechanism (e.g., one that’s not just tuned to mailers’ interests, but one that’s fair in the broadest sense of the word).  No wonder Spamhaus is being sued, and no wonder the vigilante blacklist providers of the world are losing traction with ISPs and corporate system administrators.  Authentication and real, professionally run reputation systems with ample amounts of representative data, feedback loops, and dispute resolution mechanisms will ultimately win the day over the vigilantes of the world.  Folks like Spamhaus can get things right lots of the time and in fact do provide a valuable cog in the global world of spam fighting, but they’re less great at making amends when they don’t.

So email continues to have its challenges around filtering and deliverability…but how cool is it that marketers are really sinking their teeth into metrics that prove how effective the email channel is for driving sales, both online and offline?

Blog on for Swerdloff

My colleague Craig Swerdloff, who runs our Postmaster Network lead generation business and is one of the smartest people in the online advertising business, has started blogging.  Of particular note is this post, in which he talks about the concept of explicit vs. implicit consent in advertising.

His thinking is a lot like some of the things I’ve written about in the past, like the New Media Deal and the We Media Deal.  The bottom line is that advertising has to be valuable and relevant for end users — and properly/carefully delivered.  Welcome to the blogosphere, Craig!

Wither the News? (Plus a Bonus Book Short)

It’s unusual that I blog about a book before I’ve actually finished it, but this one is too timely to pass up given today’s news about newspapers.  The Cult of the Amateur: How Today’s Internet is Killing Our Culture, by Andrew Keen, at least the first 1/2 of it, is a pretty intense rant about how the Internet’s trend towards democratizing media and content production has a double dirty underbelly:

poor quality — “an endless digital forest of mediocrity,”

no checks and balances — “mainstream journalists and newspapers have the organization, financial muscle, and and credibility to gain access to sources and report the truth…professional journalists can go to jail for telling the truth” (or, I’d add, for libel)

So what’s today’s news about newspapers?  Another massive circulation drop — 3.6% in the last six months.  Newspaper readership across the country is at its lowest level since 1946, when the population was only 141 million, or less than half what it is today.  The digital revolution is well underway.  Print newspapers are declining asymptotically to zero.

Don’t get me wrong.  I’m an Internet guy, and I love the democratization of media for many reasons.  I also think it will ultimately force old media companies to be more efficient as individual institutions and as an industry in order to survive (not to mention more environmentally friendly).  But Keen has good thoughts about quality and quantity that are interesting counterpoints to the revolution.  I hope at least some newspapers survive, change their models and their cost structures, and start competing on content quality.  The thought that everyone in the world will get their news ONLY from citizen journalists is scary.

I’m curious to see how the rest of the book turns out.  I’ll reblog if it’s radically different from the themes expressed here.

Update (having finished the book now): Keen puts the mud in curmudgeon. He doesn’t appear to have a good word to say about the Internet, and he allows his very good points about journalistic integrity and content quality and our ability to discern the truth to get washed up in a rant against online gambling, porn, and piracy. Even some of his rant points are valid, but saying, for example, that Craigslist is problematic to society because it only employs 22 people and is hugely profitable while destroying jobs and revenue at newspapers just comes across as missing some critical thinking and basically just pissing in the wind. His final section on Solutions is less blustry and has a couple good examples and points to offer, but it’s a case of too little, too late for my liking.

Hiring vs. Promoting – and a Must-Read Blog

I have to admit that I have a bit of blog envy when it comes to Fred and Brad.  We all started blogging roughly at the same time over 8 years ago (Brad and I the same day, Fred a few month before), and both have hugely large audiences compared to mine.  I don’t care all that much — mostly I blog for me and for my company, not for any other reason.  But one of the things I admire about both their blogs, particularly Fred, is the size of their *active* audiences.  (Both of them tell me not to worry about it when it comes up in conversation — as they say, they write checks to people for a living, which makes them instantly interesting to many!)  When I write a guest post for Fred, as I do once in a while, I realize he must average 100+ comments per post.  Now that’s a community.

OnlyOnce has a good solid readership, and at least a handful of really active readers who are more or less like-minded entrepreneurs.  But alas, not more than a handful.  Of this handful, Daniel Clough (who I’ve never met in person – he is in the online gaming space in a UK-based company, I believe) is one of the more regular readers and commenters and also writes his own, very thoughtful blog.  Daniel wrote a great post last week on the topic of hiring from the outside vs. promoting from within.  As I commented on his blog, I couldn’t have written it better myself.  It’s an important topic, and Daniel’s parsing of it is excellent.

Academic Inspiration

I just read in my alumni magazine that at Opening Exercises for incoming freshmen this year, Princeton President Shirley Tilghman closed her remarks with the following:

For the next four years, you will be encouraged – and indeed sometimes even exhorted – to develop the qualities of mind that allowed Katherine Newman, Simon Morrison, and Alan Krueger to change what we know about the world.  Those qualities are the willingness to ask an unorthodox question and pursue its solution relentlessly; to cultivate the suppleness of mind to see what lies between black and white; to reject knee-jerk reactions to ideas and ideologies; to recognize nuance and complexity in an argument; to differentiate between knowledge and belief; to be prepared to be surprised; and to appreciate that changing your mind is not a sign of weakness but of strength.  We ask you to be open to new ideas, however surprising; to shun the superficial trends of popular culture in favor of careful analysis; and to recognize propaganda, ignorance, and baseless revisionism when you see it.  That is the essence of a Princeton education.

While some of these comments are more appropriate for an academic setting, how many of us who run businesses want to encourage the same behavior and thoughtfulness of our employees?  Here are a few examples taken from the above.

To change what we know about the world — a hallmark of a successful startup is to invent new products and services, to change the way the world works in some small way.  In our case, to fix some of the most critical problems with email marketing.

The willingness to ask an unorthodox question and pursue its solution relentlessly — reinventing some part of the world only comes by challenging the status quo.  Return Path was started by asking an unorthodox question:  why isn’t there an easy way for people to change their email address online?

To cultivate the suppleness of mind to see what lies between black and white; to recognize nuance and complexity in an argument — the longer I run a company, the less black and white I see.  When I do seev it, I think of it as a gift.  The rest of the day is spent trying to figure out the zone in between.  Making 51/49 decisions all day long is difficult, but it’s easier when the rest of the organization is capable of doing the same thing.

To appreciate that changing your mind is not a sign of weakness but of strength; to be open to new ideas, however surprising — perseverance in business is critical; stubbornness is deadly.  How does the old saying go?  The definition of Insanity is doing the same thing over and over again but expecting different results.  If the only thing we were still doing at Return Path is ECOA, we’d be long gone by now, or at least MUCH smaller than we are today.

I don’t know too many entrepreneurs that don’t espouse most of the above principles.  The trick is to build an entire company of people that do.

(This is the second post in the series… the first one When to Hire your first Chief Marketing Officer is here).

Whether you have someone in your company that can level up to greatness or you need to bring in a CMO, the characteristics and skills of a great CMO you should aspire to include some of the following.

A great CMO understands that the marketing budget starts with drivers and business results and works backwards in a modular way to spend, not the other way around. Yes, they will get some resources but rather than spend that money to fill in the gaps on their team to make the Marketing function strong or powerful, they’ll look at the business needs and drivers. They understand what the business needs to achieve — the sales plan — then what the funnel looks like. With that information a great CMO will then know what marketing levers they can pull to both optimize the funnel and make sure the funnel is full.  So, they build the plan in a modular way. By doing that, if the budget needs to be trimmed, they can ask the right questions and easily trim. If you start the other way—if you start by looking at the budget and filling gaps and needs, you can get into a situation where you’re looking for ways to keep people busy, shifting them to where they’re needed but where they might not have skills to make an immediate impact, or you’re always scrambling to keep up with developments in sales and the funnel that you didn’t see. A great CMO will always start with the drivers and business needs and be conservative with resources and a modular approach helps to do that.

A second characteristic of a great CMO is that they make spend decisions based on a deep understanding of data, not on a hunch or because “that’s what’s always worked.”   Even in traditional B2C businesses that make heavy use of traditional non-addressable media (like print, outdoor, radio, and TV) – even in those businesses, today everything can be tested and measured to some degree.  A strong CMO is one who starts every answer with “let’s look at the data,”and if the data doesn’t exist, they’ll create metrics and measures to approximate an answer.

A great CMO will behave like a CEO in terms of being able to orchestrate the different pieces and parts of their organization.  Just as a CEO has to manage a litany of disparate functions, so too do CMOs have to manage a litany of disparate channels, they have to manage up and down the organization, and sideways, too.  Gone are the days when CMOs were either “brand or direct” or “online or offline.”  Today, the average CMO has to be able to manage 20+ different channels.  The level of complexity and number of points of failure for the job has exploded.  A great CMO handles this with the fluidity that the CEO handles moving from a Sales Pipeline meeting to a Product Roadmapping exercise. 

The final characteristic of a great CMO is that they get away from their ivory tower–they spend time in-market and in-product, not just time looking at data, budgets, and reports.  Given all the responsibilities around multi-channel orchestration, systems, budgeting, and execution in general, it can be very easy for a CMO to operate 100% from behind the desk.  The great ones want — need — to be out in the field, attending sales calls, partner meetings, events, serving as executive sponsor on some key accounts; in general, collecting primary data on the company’s products and brand.

 A great CMO can be cultivated from within your company and it’s not necessary to look outside, but regardless of how you get a CMO, the great ones will have the characteristics and traits listed here.

(You can find this post on the Bolster Blog here)

I’d like to think that Mark Twain would wholeheartedly approve of me paraphrasing his famous quote for this purpose, but I’m getting a little tired of all these reports about how email is dead. The latest one comes in the form of an op-ed in Computerworld this week. This will be a longer post than usual — my apologies in advance.

The writer talks about how email will die soon because there are too many issues with viruses, spam, IT management costs, and employment practices. The writer says email is close to having a bigger downside than upside, and that email will go the way of the typewriter or the floppy disk drive.

I say that this is a writer who has a bad IT department or a bad email service, a stunning lack of faith in technology’s ability to overcome adversity, and perhaps a misunderstanding of basic economic productivity.

Email is alive and well, as far as I can tell:

– Consumer email adoption is huge and rising. Every time I see one of those market research surveys from Pew or NFO, email activity and adoption is on the rise. It’s the number one Internet-based activity, with nearly 100% of people using it and a huge percentage of those people addicted to it.

– Email business usage is now mission critical for most employees. Enough said, for this audience, anyway. Economic productivity gains from email usage are outpacing the costs of having email system administrators and spam filters by orders of magnitude. For a quick flashback, compare the time spent firing off an email to 5 members of your staff, cc’ing your boss, and bcc’ing two of your other colleagues to the analog analog of making phone calls, holding meetings, or dictating/longhanding a memo, typing it with carbon paper or even using a photocopier, then physically distributing it.

– Spam filters are getting better by the day. While there is still a cat-and-mouse game going on between spammers and spam filters that will always result in a certain amount of false positives (good email that gets filtered) or false negatives (spam that sneaks into your inbox anyway), how many heavy email users can honestly say that their actual inbox spam problem is worse now than it was a year ago? The false positive and false negative problems will be largely solved in one way or another within 24 months. They won’t be completely solved despite Bill Gates’ optimistic prognostications, but they’ll be well under control to the point of being inconsequential.

– People are signing up for email newsletters and marketing at astonishing rates. If email was on the way out, this is the single metric you’d expect to be falling as a precursor to the crash. Well, guess what? This metric is on the rise! My company alone is getting almost 80,000 people each day to sign up for our various email-related services. Many companies who sell direct to consumers online are generating upwards of 25% of their revenue via email. Those are not exactly the signs of a sick medium.

– The email industry will not allow itself go the way of the typewriter (by the way, you will note, there was never really a “typewriter industry” the way that email has turned into its own sector). There are simply too many companies, with too much at stake, with too much capital to invest and too much reward to be gained, to permit obsolesence.

For those of you who know that my company Return Path is in the email business, you may say that my comments are self-serving, and I suppose that’s true. I’m always open to a disruptive technology, but changing human behavior is much more difficult than replacing floppy disks with DVDs or hard drives, and at this point, email as a viable communication medium is much less about the technology than about human behavior. It takes a “super disruptive” technology to make that fundamental a change.

Perhaps the writer of that op-ed should think about another technology with much grizzlier characteristics that would be sure to put it on the verge of extinction. The technology is dirty. It’s smelly. It’s terrible for the environment. Some say it’s imperling the future of the planet. All it tries to do is a simple thing, but it can cost people who live at the U.S. median income level as much as 15% of their net income every year (all headier issues than those created by email). We all generally refer to that technology as the automobile. Does anyone think that the cars is going away soon?

As for the comparison of the typewriter to email, I’ll quote Twain again: “History doesn’t repeat itself – at best it sometimes rhymes.”

Why Email Will Win the Day

I attended the same presentation as Fred where a great B2C marketer talked about how she got a 40:1 payback for every dollar spent on email marketing versus an 8:1 payback on search. As head of an email marketing company, it was music to my ears.

But the “finite issue” Fred highlights is actually a great opportunity more than it is a drawback. Most marketers still have email addresses for less than 25% of their full customer database, meaning that if we do our job as an industry, we should be able to increase the availability of email addresses threefold in the coming couple of years. With the inevitable scale efficiencies in email marketing, that 40:1 number can become much bigger, maybe even as high as 100:1, over time.

The challenge for the industry is that this kind of transformation isn’t easy. A lot of the low-hanging fruit of early online adopters is gone. This means marketers are going to have to do more to embrace permission and drive organic list growth if they want to keep pushing the email ROI metric forward. Not necessarily brain bending stuff, but there aren’t a lot of shortcuts for it, either, and it requires a different mindset than traditional advertising and direct marketing. In the end, it all comes down to respecting the consumer and delivering the value exchange to customers.

My friend Seth has a theory about life called the French Fry Theory. The theory is simple — “you always have room for one more fry.” It’s pretty spot-on, if you think about it. Fries are so tasty, and so relatively small (most of the time), that it’s easy to just keep eating, and eating, and eating them.

I’ve always thought that the French Fry Theory can be applied to many things, usually other food items. However, I came up with a new application today: Marketing.

So why are French Fries like Marketing? You can always do one more thing. One more press release. One more piece of collateral. One more page on the corporate web site. One more newsletter. Trade show. Webinar. Research study. Ad. Search engine placement. Vendor. System. Speech. Take your pick.

The world we operate in is so dynamic that marketing (when done well) is nearly impossible to ever feel like you’re completely on top of. There’s always more to be done, and the trick to doing it well is knowing when to say “no” as much as when to charge into something.

My hat’s off to 21st century online-industry marketers. To bring this analogy back to its starting point…their plates are full!