Permission marketing and targeted advertising…

I have a fascination for marketing. This fascination is because many of the marketing decisions taken by consumers are not always rational. By consumers, I’m talking about educated, rational and knowledgeable human beings like you and me. Even today, I keep paying a premium for my Levis and Dockers when I very well know that I could get a different brand from the same manufacturer for a much lower cost. This premium is for the “perceived” brand value most of the times. This very irony is what draws me towards marketing.

The intention of this post however, is to share some thoughts and info on permission marketing and targeted advertising.

Permission marketing is a word coined by Seth Godin way back in 1999. In permission marketing, consumers consciously permit the marketers to send them promotional messages. Permission marketing gives sellers the freedom to find products for their customers, instead of the other way around.

Something similar to permission marketing is Invertising (short for invitational advertising or invitational marketing) wherein the marketer targets a crowd that is interested in receiving the ad. The response for permission marketing (and targeted advertising or invertising) is likely to be very high due to the participatory nature of the exercise. This type of marketing is in direct contrast to the traditional web marketing where ads are thrown at the users without knowing how interested the user is in receiving it. This more often than not is seen as an interruption by the user and the response naturally is very low.

This being the case, every body should ideally be using permission marketing and targeted advertising and not resort to banner ads at all. But that’s not the way things work. For permission marketing to be beneficial, the user has to voluntarily provide the marketer with a whole load of information. The way web operates, most of the time, users don’t give away any data (voluntarily or involuntarily). This is the biggest reason why we are served with ads that we don’t want to see or ads that we would never click.

Google, of course is doing it’s best to serve its users “relevant ads” where the ads are based on the key words that the user has typed and/or from which geographic location the user is accessing the web. This is no where close to the impact what permission marketing or targeted advertising can create. Google or any other site these days are only trying to guess what the user might want to see based on the limited data they have and most of the time they end up serving unrelated ads (I’m happily married for close to 2 years now and I get served with bharatmatrimony ads ever so often just because I access the web from India !!!)

Permission marketing and targeted advertising works when the users voluntarily provide data about themselves and allow the marketer to target them with ads that they would be interested in.

Reading the book: “Permission marketing” by Seth Godin is highly recommended if you are interested in this topic.

Professor Sandeep Krishnamurthy has an excellent analysis of the book itself and some interesting explanations on permission marketing. Visit the URL http://jcmc.indiana.edu/vol6/issue2/krishnamurthy.html for more details. It is an easy way to understand the concept (in case you are not able to get your hands on Seth’s book). I also found other useful things on marketing from his website.

Day 2 @ TIE-ISB Connect

As mentioned in my previous post, here I would highlight the key takeaways from the second day of the TIE-ISB connect conference.

After a low profile first day, I went in to the second day with very little expectation. That kind of helped, as I was in for a pleasant surprise. The day began with back to back speeches on “Globalization and Entrepreneurship by N Prasad, Head of Global Strategy and Director, Mylan Labs” (who had sold his Matrix labs to Mylan and in the process created a 200 crore social welfare corpus..Good on ya Mr. Prasad) and “Habits of Highly Successful Entrepreneurs by Verne Harnish, Founder & CEO, Gazelles Inc. Both the speeches were thought provoking.

Some of the key points from Verne’s talk:

- Have meetings with the core team in this pattern

o Daily 15 mins (Tactics)

o Weekly 60-90 mins (Priorities)

o Monthly 4-8 hours (Big issues)

o Quarterly 1-2 days (Strategy)

- Focus on what is working

- Pick a “Sandbox” (niche) and concentrate on that

- Reach out to thought leaders (Advisors, Consultants, Coaches)

You can find more info/resources from www.gazelles.com

This was followed by a panel discussion on “Emerging Technologies”. Again, it was more of an introduction by the moderator and a few minutes talk by each of the panelists. The key note was presented by Rajesh Jain (of Indiaworld fame). This was like a Yuvi knock in a 20-20. Short with a lot of punch.

Key points:

- Think big (not incremental)

- Recognize the opportunities

- Be gutsy (Accept the challenges, have a willingness to bet it all and accept the risk of failure)

- Focus on Invertising (Interested/Informed advertising). More like the “Permission Marketing” concept of Seth Godin

There were other interesting comments by the rest of the panelists. (Focus on user generated content, location based services, abuse detection and correction tools and having sustainable differentiation.)

The last session of the conference was a panel discussion (finally, a real one) with 6 VC’s representing different firms. The discussion was moderated by Sateesh Andra of DFJ. Lots of interesting things like what VC’s look for in a venture, how they evaluate an idea, what is the return they expect (2X in 3 years and 3X in 5 years), how much stake they take (someone in the panel mentioned about 26% percent being the norm, but it varies a lot) and how valuations are done (actually they was a consensus that there is no single rule for valuation and it is more market oriented). Q&A was average (yeah..u guessed it right..I didn’t ask any question).

I had attended the session mainly to understand the entrepreneurial climate in the country. I got a fair idea of it (It is very positive with lots of people running around with lots of ideas and lots of VC’s with lots of money trying to fund these. OK. OK. That’s a lot of explanation for a positive climate!!!) . Overall, the 2 day program was beneficial in some ways. I got some gyan on technology and strategy and also got some finer ideas that I can implement in my own start-up.

Bottom line (well and truly!!!): a rating of 3 out of 5.

Day 1 @ TIE-ISB Connect…

Over the next couple of blogs, I would share my experience in attending the TIE-ISB Connect conference held at ISB, Hyderabad on NOV 15^th and 16^th.

For the uninitiated, TiE-ISB Connect is a 2 –day program providing a platform for Entrepreneurs and VC’s to come face to face and find mutually beneficial opportunities. Also, the conference is peppered with guest talks and panel discussions on lots of areas. Here, I would stick to the tracks that I followed (which basically is restricted to technology).

I was forced to miss out on the inaugural function due to a delay in my pickup from my room to ISB. The first real session that I attended was a panel (supposedly) discussion on Mobile and Internet. The moderator’s role was restricted to introduction of the panelists that included 3 entrepreneurs on the mobile space and 2 VC’s (Vani Kola representing NEO-IndoUS ventures and Mahesh Murthy representing Seedfund) and 1 person from Google. Key note was given by Anil Raj of Packetmobile. He spoke about the need for an easy UI for mobile and about not back fitting a PC app straight into the mobile.

Apart from that, the moderator did little in terms of facilitating a panel discussion. The 3 entrepreneurs spoke mainly on what they are doing rather than what the future is gonna be on this space. The Q&A was also nothing worth writing about.

The afternoon session had 2 tracks: One on Real estate and infrastructure and the other on media and entertainment. I was not tuned in for either and spent the time networking with some entrepreneurs.

Overall, it was a rather disappointing till this point and the thought that I had to spend 2 full days here was very disturbing! There was a late evening discussion on the topic “Taking India forward”. This was a saving grace for the day. The talk was focused on affirmative action in the Indian industry. The Speakers spoke at length on how the major portion of the Indian population is still away from the benefits of the 9% GDP growth (rural as well as the economically weaker sections) and some ways of addressing the issue. Pretty good stuff though overall the day was not up to my expectations.

Had a decent dinner and was back in my room by 11 pm. Rather tiring day (started at 4 am to catch the early morning flight to Hyderabad) and not much gains. Slept thinking what would be in store tomorrow…Hopefully better than today…

Read the next blog to know how it turned out…

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