Consumers Rule!: Dotomi’s Direct Messaging

The value of personalized online content is huge, and hugely appreciated by Internet users (as discussed last week). It was only a matter of time before ad technology firms found a way to translate such popularity into… advertising.

Dotomi offers a unique service that allows advertisers to combine targeting with personalized content. And I do mean personalized. The company, which began developing its technology in 2000 and has had a pilot running in Israel since 2002, allows advertisers to deliver ads specific to users’ interests and to address target audiences by name.

Dotomi Direct Messaging is something of a cross between desktop messaging and email marketing (the technology was developed by Yair Goldfinger, who was also helped create the IM technology now used by AOL). As with email marketing, ads are permission-based. But unlike IM and numerous forms of adware technology, ad delivery is strictly limited to browsers.

Here’s how the system works: Consumers opt in to receive information, special offers, and the like from marketers via home page registration fields, online forms, and offline cards available in-store. Marketers build profiles on those consumers, based on the volunteered information. When marketers want to deliver personalized messages to consumers to drive sales, encourage dialogue, build brand affinity, or survey their interests, Dotomi is called in.

Consumers opt in and are assigned cookie IDs. When a Dotomi partner publisher notices a Dotomi cookie on its site, it redirects to Dotomi’s ad server. The server draws from the marketer’s database to fill the fields necessary to personalize the ad. If the marketer isn’t currently running a campaign and there are no Direct Messages in cue, the user receives a standard ad delivered by the publisher.

In one of the company’s sample ads created for Audio Book Club, the message reads “Rachel, you loved ‘The King of Torts.’ Get Grisham’s ‘Last Juror’ for $15.99!” Another grabs the user’s attention with the words, “to: rachel@someisp.com, you’ve got a message.”

According to John Federman, Dotomi’s CEO, Direct Messaging is based on “one-hundred percent privacy compliance and overt disclosure.” Any data that exist “is marketers’ data, and private to those marketers. We don’t know what sites consumers have surfed and don’t track users,” Federman said. Dotomi seems to be dedicated to ensuring online consumers are treated with “dignity and respect.”

The company makes it easy for registrants to opt out of the system in real time. A drop-down menu is featured in all Direct Messages (which also lets users know who the message is from and includes a viral component).

The format Dotomi encourages marketers to use for campaigns reflects the company’s motto: Happy consumers breed successful campaigns. Most campaigns feature banner ads, known for being relatively unintrusive, though the company is capable of working with any ad unit. All ads have a uniform look and feel, making the system a little easier for consumers to follow. Pricing is also universal, based on a CPM model.

Although Dotomi Direct Messaging won’t be introduced in the U.S. market for a few weeks yet, the company already has a 70 percent online audience reach through its relationships with such top publishers as About.com, Lycos, and NYTimes.com. This could make buying media feel like launching a run-of-network campaign, but Dotomi’s quick to point out the system is not an ad network.

“We’re the connection point between marketers and consumers,” Federman said. He also notes the company doesn’t pre-buy media. It purchases inventory in real time once a Dotomi-cookied user is located on a publisher’s site.

At first glance, the concept behind Dotomi’s technology may seem overly complicated for most Internet users. They’ll adapt. Just as they came to accept permission-based email marketing and the idea of volunteering personal data to access sought-after site content online, they’ll likely grow to appreciate this new form of advertising — even after the novelty wears off. (Dotomi’s Israeli campaigns produce CTRs as high as 34 percent at the start, leveling off at a high 7 to 12 percent.)

One thing Internet users are certain to love is the company’s slogan, “Consumers Rule!” The technology that launched that slogan could allow advertisers to rule the world of online advertising as well.

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