Wham, Bam — No Thank You, Spam

Face it. Spam unquestionably works. Also unquestionably, tactics such as pop-ups, pop-unders, and no-click (mouse-over link) banners work. If you want to generate response, any of these methods will do, given enough exposure to a large enough audience.

But at what cost? The amount of spam is increasing at an amazing rate. According to a new report from Brightmail, users report over 37 percent of their email is unsolicited commercial email. On the other side of the pond, Silicon.com reports over 40 percent of U.K. email is spam. Lest you think all this email is harmless, Ferris Research has determined spam will cost U.S. businesses over $10 billion in decreased productivity and increased IT costs. That’s “billion” with a very large “B.”

As far as ad formats such as pop-ups go, GartnerG2 reported finding pop-ups have CTRs double that of traditional banners. Because of this success, the format’s use has grown dramatically. Nielsen//NetRatings reported a four-fold increase in pop-up impressions in the nine months between January and September 2002, growing from 1.2 billion to 4.9 billion impressions. The format’s effective, so people use it.

Although click-throughs are going up, so is enmity generated by the format. The study cited above also found 78 percent of consumers found the format “very irritating,” compared to 49 percent who said the same thing about banner ads. Need further proof? Look at the ads coming out of many national ISPs, touting pop-up blocking abilities as a feature. People hate the things.

Though short-term metrics such as CTRs continually draw advertisers to irritating ad formats and small percentage response rates draw in enough suckers to keep spammers spamming, few consider these methods’ long-term impact on the brands advertised. One of the biggest problems for us in the industry isn’t that we’re irresponsible, it’s that the ones who are irresponsible poison the well for the rest of us.

Since the direct marketing model is so often applied to interactive marketing, we’re tempted to put on the blinders and look only at immediate metrics when judging the success (or failure) of a campaign. How many click-throughs? How many leads? How many subscriptions? How many responses? These are all the questions we ask (or clients ask us) when evaluating a campaign.

Are they the right questions to ask? Maybe not.

Looking back at the wreck that was the dot-com bubble, one crystal clear lesson is brand loyalty and lifetime customers are far more important than one-off success. Many companies spent untold amounts of money generating short-term site traffic with ads or red-ink-bleeding discounts. People flocked to the sites and grabbed the discounts, never to return. Instead, they went looking for the next sucker willing to try to buy their brand loyalty. More money flowed into the pipeline, generating more short-term customers. Eventually, the companies ran out of money, not having generated enough sales to pay back acquisition costs. It was a pricing and advertising death-spiral. Plenty of bodies litter the landscape, illustrating the futility of these approaches.

We’re (sort of) past all that now. But as budgets shrink and the drive for short-term return on investment (ROI) increases, we’re tempted to look for a quick fix. We gravitate to solutions that seem to work because they “trick” a user into responding. E-mailers are more often tempted to play fast and loose with their definition of “opt-in” to build their lists.

Direct marketing’s long history shows if you throw enough stuff up against the wall, some of it will stick (no matter what you throw). The long history of advertising shows long-term customer loyalty to brands and products drives long-term growth. It costs far less to sell to an established customer than to generate a new one. The Internet’s power to communicate with millions at the press of a button mucked with the equation somewhat, but the fact remains. If a customer feels good about your brand, they’re more likely to return. Even if you spend less on them.

Brand matters. The Online Publishers Association (OPA) recently reported people who visit branded publishers’ Web sites are more likely to consume media from those same brands offline. Sixty-six percent of high-affinity online media consumers report consuming those same brands offline, compared with 23 percent of low-affinity users.

The Dieringer Research Group reported late last year nearly 40 million consumers changed their minds about offline brands because of information received online. Most of those who changed their minds (60 percent) switched brands at purchase because of that information. Online impacts brands offline, too.

Doesn’t everyone hate advertising anyway? Isn’t our job to reel in the suckers? Not so: eMarketer reported well-run permission marketing campaigns actually increase consumer brand perception of companies advertised. Another OPA study shows site affinity carries over to affinity for the site’s advertisers. Good feelings begets good feelings.

A brand is a delicate thing. In uncertain times, maintaining a well-respected brand is more critical than ever. Destroying brand perception takes very little time. Building brand recognition and loyalty takes time, repeated exposure, and, ultimately, respect for the customer. As marketers, we must think long term. Shunning short-term thinking (and tactics) is the only way to build great brands.

ClickZ Marketing Excellence Awards 2003: Who Won?

Related reading