Spam:  It’s Not Just for Okinawa Any More

My mother-in-law asked me the other day why she has so much spam in her inbox — hasn’t the problem been largely solved?  While I know many people who read my blog are in the industry and know the answer to this, many aren’t/don’t (this was feedback from my reader survey a couple weeks ago), so I thought I’d take a minute and give an admittedly overly-simplistic explanation of two big trends going on in spam these days that are keeping filters working overtime dealing with the sheer volume of spam flooding their networks.

Trend #1:  Image Spam.  These are mostly those "hot stock" scams you see emailed around, but there are other spam types that have taken to producing image spam as well.  Image spam is where the spammer just makes the entire message into a graphic, making it hard to "read" for content filters, and therefore more likely to pass through the filters.  It’s one of the reasons some ISPs have started to disable images other than from trusted senders.

Trend #2:  Botnets or Zombies.  Spam, when coupled with viruses, makes for a marriage made in hell, according to my colleague Neil Schwartzman.  Some of the bad dudes in the Internet’s Axis of Evil have figured out that if they can infect your computer with a virus, they can use your computer to send out spam for them — usually without you knowing it.  This makes the spam harder to detect, since it comes out in smaller batches, and it comes from a variety of sources instead of a billion pieces of mail coming through one pipe that can be easily shut off.

As I said, overly simplified, but at least a couple things for non-industry readers to use as fodder at their next cocktail party.

So, you ask, what the heck is the headline of the post about?  I went to dinner the other night at an Okinawa-style Japanese restaurant with a couple of friends.  Okinawa is the southern-most province in Japan, and one that had an enormous American influence during and after World War II.  As a result, one of the local favorites, prominently displayed on the menu, is Spam.  Really.  In a nice restaurant.  Fortunately, my chopstick skills were better at blocking the stuff than my ISP is some days!

How Much Marketing Is Too Much Marketing?

It seems like a busy holiday season is already underway for marketers, and hopefully for the economy, shoppers as well.  Just for kicks, I thought I’d take a rough count of how many marketing messages I was exposed to in a given day.  Here’s what the day looked like:

5:30 a.m. – alarm clock goes off with 1010 WINS news radio in the middle of an ad cycle – 2 ads total.  Nice start to the day.

5:45-6:30 – in the gym, watching Today In New York News on NBC for 30 minutes, approximately 6 ad pods, 6 ads per pod – 36 ads total.  So we’re at 38, and it’s still dark out.

7:00 – walk to subway and take train to work, then walk to office from subway.  Probably see 6 outdoor ads of various kinds on either walk, then about 8 more on the subway within clear eyeshot – 20 ads total.

7:30 – quick scan of My Yahoo – 2 ads total.

7:32 – read Wall St. Journal online, 15 page views, 3 ads per page – 45 ads total.

7:40 – Catch up on RSS feeds and blogs, probably about 100 pages total, only 50% have ads – 50 ads total (plus another 25 during the rest of the day).

7:50 – Sift through email – even forgetting the spam and other crap I delete – 10 ads total (plus another 10 during the rest of the day).

8:00-noon – basically an ad free work zone, but some incidental online page views are generated in the course of work – 25 ads total, plus a ton of Google paid search ads along the way.

Noon-1 p.m. – walk out to get lunch and come back to office, so some outdoor ads along the path – 12 ads total.

1-7 p.m. – same work zone as before – 25 ads total, plus lots of Google.

7 p.m. – walk to Madison Square Garden to see the Knicks get clobbered by Milwaukee, see lots of outdoor ads along the way – 20 ads total.

7:30-9:30 – at the Garden for the Knicks game, bombarded by ads on the scoreboards, courtside, sponsorship announcements, etc.  Approximately 100 ads total (and that’s probably being exceptionally generous).

9:30 – subway ride and walk home – 14 ads total.

10:00 – blitz through episodes of The Daily Show and West Wing in TiVo.  8 minutes of :30 advertising per half hour, or 48 ads total, fortunately can skip most of them with TiVo.

11:00 – flip through issue of The New Yorker before bed – 50 ads total.

Total: 492 ads.

I’m sure I missed some along the way, and to be fair, I am counting the ads I skipped with TiVo — but hey, I’m also not counting all the ads I saw on Google, so those two should wash each other out.  On the other hand, if I drove to and from work in California, I’d have seen an extra 100 billboards, and if I read the New York Times print edition, I’d have seen an extra 100 print ads.

Approximate cost paid to reach me as a consumer today (assuming an average CPM of $10): just under $5.  Sanity check on that — $5/day*200 million Americans who are “ad seers”*365 days is a $365 billion advertising industry, which is probably in the right ballpark.

What are the two ads I consciously acted on?  An offer from LL Bean through email (I’m on their list) for a new fleece I’ve been meaning to get, and a click on one of the Google paid search results.  No doubt, I subconsciously logged some good feelings or future purchase intentions for any number of the other ads.  Or at least so hope all of the advertisers who tried to reach me.

What’s the message here?  A very Seth Godin-like one.  Nearly all of the marketing thrown at me during the day (Seth would call it interrupt marketing) — on the subway, at the Garden, on the sidebar of web pages — is just noise to me.  The ones I paid attention to were the ones I WANTED to see:  the email newsletter I signed up for from a merchant I know and love; and a relevant ad that came up when I did a search on Google.

Brand advertising certainly has a role in life, but permission and relevance rule the day for marketers.  Always.

New Media Deal – a comment

A user calling him or herself “graciouswings” (who left a bogus email address with his/her comment, so I couldn’t email him/her) made a lengthy comment to my New Media Deal posting (posting here, comment at the bottom or here).

The meat of the comment was:

“advertising doesn’t bug us if it’s not too intrusive and if there’s something in it for us as consumers.” This is simply not true. This notion is based on unfair playing grounds. People don’t like seeing commercials before movies. People _are_ bugged by having to create an account at every website they visit, whether it’s to post a comment, purchase a song, ask a question of tech support, read the news, or get their local weather info — agreeing to the privacy statement by the by. People don’t read the privacy statements. People aren’t given a choice, other than to simply not use the service. People have no choice but to watch those ads in the theater — in spite of having paid a day’s salary for their family to watch the movie — because, if they didn’t, they’d have to be late and get bad seats in the theater. And if you think that not using services or receiving diminished services is a choice, you’re lying to yourself. It’s discrimination.

I’m struggling to come up with a definition of discrimination that fits graciouswings’ argument, since discrimination means “treatment based on class or category rather than individual merit; or partiality or prejudice.”  All consumers are treated equally with respect to advertising, as far as I can tell.

And although it’s only one data point, I do have an interesting anedcote that gets of the core of this argument.  When I was running marketing for MovieFone (777-FILM) back in the 1990s, we ran a survey of our own customers and asked them which they would prefer:  continuing to use the MovieFone service with its 20-second uninterruptible movie advertisement at the beginning of every call; or have MovieFone become an ad-free service on a 900-number at a cost of $0.25 per call to the caller.  The results were *overwhelming* that consumers would rather listen to the ad than pay a quarter for the convenience of the service.  And this isn’t an ad that consumers could skip or flip past like a print ad.  I suspect if we ran a poll asking people if they’d rather pay $3.00 for a copy of the New York Times or pay $1.00 and have a bunch of ads in it, they’d respond the same way.

But maybe consumers are different when it comes to the New Media Deal.  Maybe they would rather pay for services than get them for free in exchange for some of their personal data.  I suspect if that was the case, some entrepreneur (perhaps graciouswings) would make a fortune developing paid, ad-free versions of most major web services that would attract some meaningful portion of consumers under a different model.  But seems to me that the body of empirical evidence is proving otherwise.

Social Computing:  An Amusing Anecdote About Who is Participating

We learned something about Wikipedia tonight.  Mariquita was reading an article on Castro on CNN.com entitled “Castro Blames Stress on Surgery” about his upcoming intestinal surgery.

[Quick detour — I’m sorry, Castro blames the surgery on stress?  Isn’t it good to be the king?   And he’s handing  the reins of government over to his oh-so-younger brother Raul, at the tender young age of 75?]

Anyway, we were debating over whether Castro took over the government of Cuba in 1957 or 1959, so of course we turned to Wikipedia.  Ok, so Mariquita was right, it was 1959.  But more important, we learned something interesting about Wikipedia and its users.

There were three banners above the entry for Casto that I’ve never seen before in Wikipedia.  They said:

This article documents a current event.  Information may change rapidly as the event progresses.

This article or section is currently being developed or reviewed.  Some statements may be disputed, incorrect, biased or otherwise objectionable.  Please read talk page discussion before making substantial changes.

The neutrality of this article is disputed.  Please see the discussion on the talk page.

That’s interesting of the editors, and it made me rush to read the entry on our fearless leader, George W. Bush.  It only had one entry, a bit different from that of Castro (who, at least in my opinion, history will treat as a far more horrendous character than Dubya):

Because of recent vandalism or other disruption, editing of this article by anonymous or newly registered users is disabled (see semi-protection policy). Such users may discuss changes, request unprotection, or create an account.

Well, there you go.

SUGGing and FRUGGing: Practices as Ugly as They Sound

(Below is the beginning of my December column for DM News.)

We love surveys. Though many people in direct marketing don’t know it, we have a large business unit, Authentic Response, that provides a global online sample aimed at helping market researchers connect with qualified panelists via our MyView portal. And, like most companies, we use surveys to get a read on what our customers want from us and how we can improve their experience with us.
Market research is an industry that prides itself on accuracy and purity of data, which is why I want to use this column to let direct marketers know how painful it is when companies poison the market research well by engaging in SUGGing and FRUGGing.  For the uninitiated, SUGGing is the acronym for…(Read the rest at DMNews here.)

How Do You Eat an Elephant?

Credit to my colleague Chuck Drake for this one…but How Do You Eat an Elephant?  One Bite at a Time.  The David Allen school of time management (post, book)  talks about breaking your projects down into “Next Actions” so they don’t become overwhelming and can easily move forward one step at a time.

I think the same is true of organizational projects – perhaps even more so.  Any time we find ourselves swirling around a big initiative at Return Path, we are at our best when we ask ourselves some questions along these lines:

• How can we be scrappier about this?
• It it ok to be messy here…or at least not perfect?
• What is the next milestone?
• What else needs to be done until we learn the likely outcome?

We had a great example of this recently around rolling out a new product to our sales and service team.  The team is now pretty large – over 100 globally.  It was a daunting task to try to get all those people trained up at once.  The answer?  We took a bite out of the elephant.  We picked a couple of sales reps and a couple of account managers and started by training them on the new product.  Now we can figure out how to institutionalize learnings from the limited roll-out and figure out the next step from there.  Much easier than what otherwise would have been a pretty high-stakes project without enough learnings behind it, even though it will take a little longer and be a little messier.

5 Ways to Get Your Staff on the Same Page

[This post first appeared as an article in Entrepreneur Magazine as part of a new series I’m publishing there in conjunction with my book, Startup CEO:  A Field Guide to Scaling Up Your Business]

When a major issue arises, is everybody at your company serving the same interests? Or is one person serving the engineering team, another person serving the sales team, one board member serving the VC fund, another serving the early-stage “angels” and another serving the CEO? If that’s the case, then your team is misaligned. No individual department’s interests are as important as the company’s.

To align everyone behind your company’s interests, you must first define and communicate those goals and needs. This requires five steps:

1. Define the mission. Be clear to everyone about where you’re going and how you’re going to get there (in keeping with your values).
2. Set annual priorities, goals, and targets. Turn the broader mission into something more concrete with prioritized goals and unambiguous success metrics.
3. Encourage bottom-up planning. You and your executive team need to set the major strategic goals for the company, but team members should design their own path to contribution. Just be sure that you or their managers check in with them to assure that they remain in synch with the company’s goals.
4. Facilitate the transparent flow of information and rigorous debate. To help people calibrate the success, or insufficiency, of their efforts, be transparent about how the organization is doing along the way. Your organization will make better decisions when everyone has what they need to have frank conversations and then make well-informed decisions.
5. Ensure that compensation supports alignment (or at least doesn’t fight it). As selfless as you want your employees to be, they’ll always prioritize their interests over the company’s. If those interests are aligned – especially when it comes to compensation – this reality of human nature simply won’t be a problem.

Taken in sequence, these steps are the formula for alignment. But if I had to single out one as the most important, it would be number 5: aligning individual incentives with companywide goals.

It’s always great to hear people say that they’d do their jobs even if they weren’t paid to, but the reality of post-lottery-jackpot job retention rates suggests otherwise. You, and every member of your team, “work” for pay. Whatever the details of your compensation plan, it’s crucial that it aligns your entire team behind the company’s best interests.

Don’t reward marketers for hitting marketing milestones while rewarding engineers to hit product milestones and back office personnel to keep the infrastructure humming. Reward everybody when the company hits its milestones.

The results of this system can be extraordinary:

• Department goals are in alignment with overall company goals. “Hitting product goals” shouldn’t matter unless those goals serve the overall health of your company. When every member of your executive team – including your CTO – is rewarded for the latter, it’s much easier to set goals as a company. There are no competing priorities: the only priority is serving the annual goals.
• Individual success metrics are in alignment with overall company success metrics. The one place where all companies probably have alignment between corporate and departmental goals is in sales. The success metrics that your sales team uses can’t be that far off from your overall goals for the company. With a unified incentive plan, you can bring every department into the same degree of alignment. Imagine your general counsel asking for less extraneous legal review in order to cut costs
• Resource allocation serves the company, rather than individual silos. If a department with its own compensation plan hits its (unique) metrics early, members of that team have no incentive to pitch in elsewhere; their bonuses are secure. But if everyone’s incentive depends on the entire company’s performance, get ready to watch product leads offering to share developers, unprompted.

This approach can only be taken so far: I can’t imagine an incentive system that doesn’t reward salespeople for individual performance. And while everyone benefits when things go well, if your company misses its goals, nobody should have occasion to celebrate. Everybody gets dinged if the company doesn’t meet its goals, no matter how well they or their departments performed. It’s a tough pill to swallow, but it also important preventive medicine.

Winds of Change at the DMA

I’ve been an active member of the Direct Marketing Association (DMA) for almost seven years now.  It’s kind of the Mac Daddy of trade associations in and around our business.  The DMA has taken its lumps of late, mostly deservedly so, and I think made some terrible moves, misjudgments, and decisions a few years back.

But I’ve continued to be an active member, mostly convinced by new DMA CEO John Greco and COO Ramesh Ratan that there was a new sheriff in town who was going to restore peace and order to the village.  John and Ramesh have a deep understanding and deeply held convictions about consumer experience and permission — and about the centrality of interactive marketing to direct marketing, and to marketing departments in general.

And they’re starting to make lots of changes at the DMA, from who is on the staff, to the staff’s mindset, to their goals, budgets, and plans — all to the benefit of interactive marketers.

One thing they’ve done is revitalized the Interactive Marketing Advisory Board (IMAB), which we created after AIM was dissolved last year, of which I’m the Chairman.  The IMAB has a star-studded list of member companies and individuals (see coverage in DMNews here) and is working diligently and in great partnership with the senior staff of the DMA to really bring interactive marketing principles to the core of the DMA’s offerings and ethos.  We still have a long way to go, as you probably noticed at this week’s DMA 06 show in San Francisco (great interactive programming, very weak interactive trade show floor and critical mass of key attendees), but I think the IMAB initiative has us off to a great start.

Stay tuned for more developments on this front over the coming weeks.

If this madness all ended tomorrow, I would do…almost nothing

(This post originally appeared on FindYourNerve on October 21)

I don’t know what you call the last 12 months of global macroeconomic meltdown.  I’ve taken to calling it the Great Repression.  In part because it’s somewhere in between a Recession and a Depression, in part because it’s certainly repressed the wants and needs of startups and growth companies the world over.  And it makes for good cocktail party chatter.

Someone asked me a question the other day, which started off with “Now that the recession is over…”  I can’t even remember the end of the question.  I got lost in the framing of it, mostly because I’m not convinced it’s over yet.  Fine, fine, Bernanke says it’s over.  But he couldn’t possibly have used more caveats or more cautious language to couch his statement.  I haven’t seem great signs of a recovery, in any case.  But the question got me thinking.  What would I do if the recession really was over, or if I knew that, say, tomorrow, the heavens would open up and swallow our inflation fears, deflation fears, and collective global deficits whole?

You know what?  I wouldn’t do a thing.  That’s not entirely true.  I’d probably sleep better that night.  But I wouldn’t do a lot of other things out of the gate.  This last year has tested nerves.  My nerve as a CEO, my Board’s nerve, and the collective nerve of our organization.  And we’ve pulled off a great year.  We will still grow close to 50%, we greatly expanded our operating margins and are generating nice cash flow, and we preserved all jobs, salaries, and core benefits (all five of our objectives that I laid out 12 months ago when the &*%$ started to hit the fan). 

So, why wouldn’t I do anything different if I knew the world would be a different place tomorrow?  Because holding our nerve this past year has changed a lot of things about our organization for the better, and I don’t want to see us reverse course on those things just because we can.  Here’s one example, one of many we have – when we cut our travel budget by 50% this year, everyone on the team looked at us like we were crazy and said there was no way we’d be able to make budget.  Guess what – we BEAT the slashed budget by almost a third, without complaint!  Why should we triple it going forward to get back to where we were? 

Anyway, other companies can lose their nerve when they aren’t forced to have it.  As for me and Return Path, while we will certainly move some things back to normal over time as the world improves, it won’t be a wholesale reversion to yesteryear.

Opportunity Knocks

When our friends at Habeas announced that they were exploring a sale of the company a few months back, we were intrigued.  While fiercely competing in the marketplace does create some degree of tension or even mistrust between two companies, that activity also creates a lot of common ground for discussion about the market and the future.

So we are very excited today to announce that we are acquiring Habeas in a deal that is signed and should close within a couple weeks.  Cutting through all the PR platitudes, here’s what this deal really means for our stakeholders:

For everyone we work with, this deal means we have even more scale.  More scale is a good thing.  It means we can invest more in our future in everything from technical infrastructure, to product innovation, to globalization, to employee development.  It’s easy to be great when you’re a 25 person company.  It’s actually quite challenging when you’re a 50-100 person company.  It becomes easier again, though in different ways, when you are a 200 person company with more resources.

For ISPs and filters, more scale means more and better data products to help fine tune filtering algorithms and improve member experience.  It also means an even more streamlined way to reach masses of marketers and publishers. 

For sender clients, we can now offer expanded service levels and access to a broader “footprint” of ISPs and filters who subscribe to our services.  The consolidated company will be one step closer to providing a universal set of standards for measuring sender-focused email quality and reputation.  Some of the details still need to be worked out here, so look for more specific communication from your account representative in the coming weeks.  The one thing we do know at this point is that we will be maintaining both Sender Score Certified and the Habeas SafeList as separate and distinct whitelist programs indefinitely.  So for now, it’s business as usual.

For employees, combining the resources of the two companies means we will be in a better position to wow our clients.  A bigger employee base and a larger company also means more career opportunities for all. 

We have always been mindful that, even as the market leader, we have to earn “every dollar, every day” from our clients, and we have to constantly demonstrate to ISPs and filters that we are not just advocating for our sender clients but for them and their subscribers as well.  None of that changes with this deal.  We still have plenty of competition and are redoubling our efforts to lead the market with innovation and service levels, not just with size and scale.

Our friend Ken Magill wrote some unkind remarks about Habeas a while back.  At the time, as fierce competitors with Habeas, we probably agreed with him.  But as we’ve gotten to know Habeas better over the past few weeks, we realized what a great business the Habeas team has built in the last five years  — including: a strong customer base and partner network, innovative reputation technologies, complementary receiver and data partnerships and most importantly, an incredible team of people as fanatical about saving email as Return Path. For Return Path employees and clients, we get access to these new assets that now makes us an even stronger leader in this space.  And Habeas employees and clients now have expanded access to great resources and talent from Return Path.  But the big winners are the ISPs, filters, and email senders – they will l now have access to a more universal solution to deliverability and filtering accuracy.

So, to  Habeas’ employees, we say “Welcome to the Return Path family!”  We are delighted to have you and look forward to many years of success together.  As I said to my wife when we were in the middle of all the due diligence on the deal, “learning more about Habeas is a little bit like looking in one of those Fun House mirrors at a carnival – you see yourself, just looking slightly different.”  We will all have to work together to move to the common ground from the prior world of competing against each other, but the exciting future of the business and the industry will propel us there. 

Onward!

All three of our kids were at sleep-away camp for the past month, which was a first for us.  A great, but weird, first!  Our time “off” was bracketed by the absolutely amazing story of Come From Away.  One of the first nights after the kids left, we saw the show on Broadway (Broadway show web site here, Wikipedia entry about the musical and story synopsis here).  Then the last night before they came home, we saw Tom Brokaw’s ~45 minute documentary, entitled Operation Yellow Ribbon, which you can get to here or below.

https://youtu.be/jXbxoy4Mges

Come From Away is an amazing edge story to 9/11 that I’d never heard of before.  It’s hard to believe there’s a 9/11 story that is this positive, funny, and incredibly heart-warming that isn’t better known.  But thanks to the show, it is starting to be.  It’s the story of the small town Gander in Newfoundland to which a large number of US-bound flights were diverted after the planes hit the World Trade Center and Pentagon.  It’s the story of how a town of 9,000 people warmly absorbed over 7,000 stranded and upset passengers for 4-5 days before North American air traffic was flowing again following the attacks.

We were both on the edge of our seats for the entire 2 hour (with no intermission) show and were incredibly choked up the whole time…and had a hard time talking for a few minutes after.  I’m sure for us, some of that is wrapped up in personal connection to 9/11, as our apartment was only 7 blocks north of the World Trade Center with a clear, 35th floor view of the site, and all that came with that.  We didn’t lose anyone close to us in the attacks, but we knew dozens of second degree people lost; I had worked in one of the smaller World Trade Center buildings for a couple years earlier in my career; our neighborhood felt a bit like a military zone for a few weeks after the attacks; and we saw and smelled the smoke emanating from the site through Christmas of that year.

After seeing the show, we researched it a bit and found out just how close to real the portrayal was.  So we watched the documentary.  I always have a great association with Brokaw’s voice as the calm voice of objective but empathic journalism.  He does such a great job of, to paraphrase him from the documentary, showing the juxtaposition of humanity at its darkest moment and its opposite.

Both the show and the documentary are worth watching, and I’m not sure the order of the two matters.  But whatever order you take them in, put both on your list, even if you weren’t a New Yorker on 9/11.