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The Advertiser is Watching

In my recent iMedia article on business marketing blogs, I noted how saturation has impacted the online advertising and email channels. In fact, there has been a good deal of research conducted on the subject. For example, Yankelovich and Forrester/Intelliseek have recently released studies which highlight consumer annoyance with advertising clutter. Similarly, my firm recently co-sponsored a research study with behavioral marketing firm Revenue Science. Conducted by the Ponemon Institute, the study addresses consumer frustration with online ad saturation. 

Let’s face it, folks. Consumers are ticked. They want an online experience that is more tailored to their individual interests. Some analysts predict that ultimately, consumers will demand complete control over that experience. I’m not sure I’d go that far, but it's interesting that the Yankelovich study indicated that consumers would be much more likely to share their data with a company if that company gave them control over how the data is used.

I recently came across two technology companies that have tools squarely aimed at consumers seeking to control their own online experience. The first, Real Simple Shopping, seeks to use RSS (Real Simple Syndication or Rich Site Summary -- a format for publishing information) as a marketing and ecommerce channel. The company, still in beta, offers a way for consumers to use an RSS feed to control when and how marketers communicate promotions and offers. A consumer looking to use the Real Simple Shopping platform need only go to a participating marketer’s registration page. Once on the registration page, she would have the ability to sign up to receive RSS feeds in much the same way that someone currently registers to receive email offers. Whenever the selected marketer sends out an email promotion, that consumer’s RSS feed is updated with the marketer’s promotion.

According to the company, many of the features that marketers find valuable with email -- customization, targeting and performance tracking -- can be achieved through the RSS platform. “We designed our system to integrate with performance tracking solutions because we understand the marketer’s need to measure the ROI,” says Stuart Watson, chief executive officer of Real Simple Shopping. Moreover, since the consumer controls the flow of information to their RSS feed, there are no issues with spam or other unwanted messages.

While the idea of using RSS to circumvent the spam problem is certainly enticing, keep in mind that RSS adoption rates remain pretty low. A recent study conducted by consultant Rick Bruner on behalf of Quris indicated that only 1.4 percent of respondents were using RSS. For a technology that’s been around for over five years, that’s a pretty low adoption rate. Real Simple Shopping’s success is dependant upon RSS adoption by those other than ‘techies’ and assorted early adopters.

The second company, Dotomi, uses the online advertising channel to deliver customized ads on behalf of advertisers. The company embarked about 18 months ago in Israel, and has recently launched its first client in the U.S. The basic premise is that consumers will sign up on advertiser’s sites to receive banner ads from that advertiser in much the same way they might sign up with an advertiser to receive email updates.

In fact, the email analogy is particularly apt when describing Dotomi’s product. Although Dotomi deploys targeted banner ads, the company doesn’t necessarily see itself as a competitor to the behavioral marketing firms. “We view our self as competing with and complimenting existing retention email marketing companies,” says John Federman chief executive officer at Dotomi. “While email marketers send personalized email messages, Dotomi sends personalized messages via banner ads to consumers who’ve specifically requested them.”

Here’s how it works. The consumer provides his personal information on the registration page and a Dotomi cookie is created and placed onto the user’s computer. As the user visits sites that are part of the Dotomi network, he is served ads personalized by the data he provided at registration. The publishers on the Dotomi network detect the Dotomi cookie and serve the selected advertiser’s banner in place of whatever other ad they’d scheduled for that time. For those of you old-schoolers who can remember DoubleClick’s Boomerang product -- the idea is essentially the same.

Is everybody happy?

So the argument goes, the publisher should like this arrangement because they get to charge a higher CPM and the advertiser is happy because they get a much better response rate. Finally, the site visitor is pleased because they ultimately receive more ads that are both relevant and from companies they’ve specifically selected.

However, there might be an inherent creepiness factor as consumers get used to the concept of getting a personalized message in their ads. I remember a Tom Cruise movie -- I think it was 'Minority Report' -- where every billboard, payphone or Coke machine he walked by somehow knew his name and presented him with a targeted message. I can also remember feeling a bit unsettled, and not just because I didn’t like the movie.

Dotomi suggests that education is key to avoiding the creepy factor. The company has taken steps, such as producing a best-practice guide for responsible use to help ensure that advertisers are proactive in educating consumers about Dotomi technology. The company specifically advocates a tiered approach. In other words, initial messaging to consumers should use a limited amount of personalization. And as each consumer gets used to these types of ads, the advertiser could begin to personalize the ads more, perhaps by adding the consumer’s name to the message.

This is a smart approach, although it remains to be seen where each consumer’s threshold will ultimately lay. One thing is for certain. If advertisers don’t use this technology carefully, selectively and transparently, consumers will almost certainly balk.

The bottom line

What I like about these companies is that they each offer the allure of consumer control. Just think about it -- research has shown that an empowered consumer is a happy consumer. Perhaps even a spendthrift consumer? Are Dotomi and Real Simple Shopping aberrations, or the future of online marketing? Let me know what you think.

Alan Chapell is a consultant focusing on Privacy-Marketing -- helping companies understand privacy and incorporate consumer perception into product development. He has been in the interactive space for more than seven years with firms such as Jupiter Research, DoubleClick and Cheetahmail. Mr. Chapell is the New York Chapter Chairman of the International Association of Privacy Professionals, and he publishes a daily blog on issues of consumer privacy.

Chapell & Associates is headed by Alan Chapell. In 1997, Chapell founded the privacy program at Jupiter Research, an internet research firm focusing on the consumer internet economy. During his four and a half years at Jupiter, Chapell also...

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