Cyberfishing for Prospects

The Internet would seem to be a direct marketer's dream. As prospects visit World Wide Web home pages of entities as varied as American Express and Miller beer, they leave behind electronic footprints, such as E-mail addresses. Eager brand builders are telling their clients that those addresses are home to hot prospects and can be mass-mailed direct E-mail solicitations. Some also think they can make money off the Internet by charging customers for product information.

But all bets could be off in the fast-developing practice of marketing in cyberspace. Sending an unsolicited E-mail ad is more likely to earn the enmity, not enthusiasm, of that prospect. That's because privacy is a major cultural issue on the Internet. Such privacy questions have already been brought to the attention of the Federal Trade Commission, which has monitored advertising claims for the traditional media. The FTC recently met with major ad agencies and outlined concerns about abusive Internet marketing, which it is claiming is akin to harassing telemarketing.

The Internet would seem to be a direct marketer's dream. As prospects visit World Wide Web home pages of entities as varied as American Express and Miller beer, they leave behind electronic footprints, such as E-mail addresses. Eager brand builders are telling their clients that those addresses are home to hot prospects and can be mass-mailed direct E-mail solicitations. Some also think they can make money off the Internet by charging customers for product information.

"Yes, it's an invasion of privacy -- and in many cases arguably an unjust taking of money," says Tony Rutkowski, executive director of the Internet Society, Reston, Va. "The latter occurs where people or institutions must pay per message or per byte. You'll also note that the FTC characterizes such activity as abusive telemarketing and is proposing civil penalties assessed against those engaging in the practice."

With those real constraints in mind, smart marketers are taking a more cautious approach to advertising on the Internet, or its commercial cousins, CompuServe, America Online and Prodigy. Sales can be made, to be sure. But self-regulation is hot.

Sun Microsystems, the maker of computer workstations, receives 45,000 messages a day on its Internet account, making it the most active commercial service on the 'Net, according to a survey by the University of Washington, Seattle. In recent weeks, a prospect who obtained all of his product and technology information from the Sun Internet site recently purchased $300,000 in equipment, a spokesman says. But the company does not send unsolicited, junk E-mail to its prospects. Instead, it furnishes all manner of product literature, such as sales brochures, and even the company's annual report, in an electronic form, which customers can browse at their own pace. Others are following the same path as well, and don't consider the 'Net a site for advertising, per se, but rather for marketing communications. "We don't keep specific addresses, because we think that would be a violation of privacy," says the spokesman. "We keep domains and general statistics, such as how many accesses did we have on a specific white paper. What times did they come in?"

So Sun and agencies such as Ketchum Interactive, recommend setting up an electronic business reply card at the page site. Interested prospects can fill out the E-BRCs, requesting more information to their E-mail or snail-mail address.

A new online merchandiser, called 2 Market, keeps privacy concerns in mind, but does offer services which allow it to confer with its electronic prospects, according to the company's vice president of merchandising Greg Shove. The San Francisco-based company, is a spin off of the new media division of Apple Computer, and offers electronic catalogs for clients such as Lands End, on America Online. "We have a service that is called Ask the Gift Expert," says Shove. "You send us in E-mail, fill in an electronic form about the gift you're trying to buy or the person you're buying for. And within 24 hours we'll send you back some advice about what to buy. That's something that can't be done in any other media that easily and that cost effectively."

The company, with the permission of the customer, can now assemble an electronic buyer's profile. "Advertising is all about sending messages down to somebody," says Shove. "This [is] the whole one-to-one marketing thing that has been raised in the last year. The end game is that there has to be a relationship established. Electronic services are the way we can figure that out."

"If you take the Gift Expert to the next level, we then become a service that the consumer relies on," says Shove. "We then become a tremendous channel for other merchandisers and advertisers because we will know who is buying gifts and when."

But that will require some changes in traditional thinking. 2 Market believes databases in the online world should resemble a small town general store to which the customer willingly provides data, in exchange for a time-saving service. "In most sales transactions today, you have to talk to a salesperson or a telemarketer or a car salesman," says Shove. "Wouldn't it be nicer to talk to the guy who designed the car? But with databases, you can do that. These are information centers where you get information about the product, why I want it and why I like it."

J. Walter Thompson's interactive division, based in Detroit, has several clients who advertise on CompuServe and Prodigy, and it is presently testing the techniques outlined by 2 Market. According to Rowland Sharette, director of Thompson's interactive activities, the company uses online connections with potential customers to search for complaints about specific products. "We interpret customers' messages and look for complaints, or suggestions," says Sharette. "If someone is talking to you, they have a level of interest in the product and are a valuable resource."

After storing that complaint information in a customer profile database, the agency then uses an automated messaging system to respond to customers.

According to Barry Lane, of Ketchum Interactive, Los Angeles, another rule that database marketers should follow is to stop thinking like an advertiser. "This is not about advertising," says Lane. "It's marketing, stupid. You have to think of your investment as a media property."

As with other media properties, such as specialty magazines, the publishers of Internet services choose their audience, whether it is for sporting goods or health foods, observes Lane. "You have to create an editorial environment that is relevant to your audience, and then bring them to it. This can be done for any market segment. If your core audience is 12- to 18-year-old girls, you can find them online and develop a database. There is a company called Jane's Cosmetics that does an amazingly successful program on Prodigy, called Jane's Brain. They are marketing cosmetics in a non-graphical environment. It is the most effective marketing program the CEO has ever run."

This approach of providing a media product for the customer leads to relationships -- and allows the marketer to acquire lifestyle-relevant information, says Lane. "Too many marketers today take a Web approach to marketing on the Internet," says Lane. "If they're available on the Web we want them. If they're browsing, I want them to find me. That's fine in 1995, when there are only a few million users and the demographics are overtly 18- to 49[-year-old] males. My argument is maybe what we need to do is build a series of front doors on the Internet, and if I'm trying to target the 12- to 24-year-olds enamored of MTV, I should offer something relevant to their lifestyle."

Techniques from direct marketing and direct mail can be used once prospects have identified themselves -- whether it is by visiting a commercial online site or by sending your client an E-mail complaint.

Fergus O'Daly, chairman of Poppe Tyson, the New York agency that developed the World Wide Web site for the White House, says his agency has retrained writers and art directors in direct marketing skills so they can effectively communicate with customers over the Net. But what is needed is a standardized format -- the E-mail version of the business reply card touted by Sun -- before database marketing on the Internet can really flourish. "People have always been able to get this information, where is the customer from, what is her age and income," says O'Daly. "Right now we're working with a system from a company called I-Pro. We're testing it... and the early results have been spectacular."

The software asks visitors to an online site for personal information, and provides them with a PIN, so they don't have to go through the rigmarole when they log on once again. To woo privacy-oriented consumers, O'Daly thinks special Internet promotions might have to be used. "You can give them incentives to acquire the information," says O'Daly, who observes that Internet customers are different than those approached through snail mail. "Maybe it will have to be something like 25 percent off their purchase for that data."


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