Permission Marketing: Turning Strangers into Friends and Friends into Customers by Seth Godin, Don Peppers (Adapted by), Don Peppers (Foreword by)

From Barnes & Noble

If you have time to read only one Internet marketing book, make it this one. Godin, an Internet pioneer and VP of direct marketing at Yahoo!, shares his visionary approach of inviting customers to be part of the marketing process, and capturing them for life.

From the Publisher

The man Business Week calls "the ultimate entrepreneur for the Information Age" explains "Permission Marketing" — the groundbreaking concept that enables marketers to shape their message so that consumers will willingly accept it.

Whether it is the TV commercial that breaks into our favorite program, or the telemarketing phone call that disrupts a family dinner, traditional advertising is based on the hope of snatching our attention away from whatever we are doing. Seth Godin calls this Interruption Marketing, and, as companies are discovering, it no longer works.

Instead of annoying potential customers by interrupting their most coveted commodity — time — Permission Marketing offers consumers incentives to accept advertising voluntarily. Now this Internet pioneer introduces a fundamentally different way of thinking about advertising products and services. By reaching out only to those individuals who have signaled an interest in learning more about a product, Permission Marketing enables companies to develop long-term relationships with customers, create trust, build brand awareness — and greatly improve the chances of making a sale.

In his groundbreaking book, Godin describes the four tests of Permission Marketing:

1. Does every single marketing effort you create encourage a learning relationship with your customers? Does it invite customers to "raise their hands" and start communicating?

2. Do you have a permission database? Do you track the number of people who have given you permission to communicate with them?

3. If consumers gave you permission to talk to them, would you have anything to say? Have you developed a marketing curriculumto teach people about your products?

4. Once people become customers, do you work to deepen your permission to communicate with those people?

And in numerous informative case studies, including American Airlines' frequent-flier program, Amazon.com, and Yahoo!, Godin demonstrates how marketers are already profiting from this key new approach in all forms of media.

Business Week

Seth Godin is the ultimate entrepreneur for the Information Age.

Publishers Weekly

Godin, a business whiz kid who does direct marketing for Yahoo!, asks a provocative question: Does advertising work? He cites example after example of recent misguided campaigns, a "waste jamboree" of traditional ads aimed at consumers who no longer care. There's an "infoglut" out there, he says, of ads in myriad media whose only power is to "interrupt" people's lives. Godin's professional journey to his current status as a guru of online promotion began with his work for such industry bigs as Prodigy and AOL. Now, he specializes in direct-mail campaigns online, where he takes advantage of the interactive nature of the technology. Using traditional terms such as reach and frequency to define his efforts, he moves further, into the touchy-feely area of "permission marketing," his term for developing a personal relationship with consumers, where they actually enjoy receiving correspondence. On tape, Godin's message is winning because of his youthful attitude: self-assured, at times cocky, but always sensible. Based on the 1999 Simon & Schuster hardcover. (Aug.) Copyright 1999 Cahners Business Information.

The Standard

If you've ever bought anything online, you know that most Net stores ask for your e-mail address. Many of them also ask you to check a box if you're interested in hearing about special offers – that's an example of permission or opt-in marketing.

It's also permission marketing when a McDonald's counterperson asks, "Doyouwantfrieswiththat?" Because you have already ordered a Big Mac, so the logic goes, you have implicitly stated that you could be interested in other products.

Seth Godin, chief marketer at Yahoo and author of Permission Marketing, would be the first to admit there's nothing intrinsically new about the premise of his book. That said, Godin asserts that in the Internet Economy, permission marketing is perhaps the only thing that can save us from being buried under a mountain of spam.

In Godin's view, permission marketing is good for advertisers because, in an increasingly cluttered world, it ensures that consumers will be more open to an advertiser's pitch. Individual pitches will be more relevant, expected and, thus, welcomed. For the same reasons, permission marketing should be good for consumers. This is the way it's supposed to work, anyway.

The picture gets cloudy when you consider how marketers really do business. Consider, for example, last year's Federal Trade Commission complaint against GeoCities. If GeoCities members failed to check a box opting out of marketing offers, they were assumed to have given permission to accept ads not only from GeoCities, but from all the companies to which the company sold its marketing information. GeoCities denied any dirty tricks, although it did agree to revise its disclosure policies.

After all, in the new world of marketing, Godin says, what you do with your customers' data is just as important as getting it in the first place.

– Maria De La O

The Alchemy of Growth
By Mehrdad Baghai, Stephen Coley and David White (Perseus Books, $28)
Three McKinsey & Co. consultants outline the three horizons of sustainable growth.

Digital Capitalism
By Dan Schiller (MIT Press, $30)
A skeptical look at the Net's evolution from military-industrial network to capitalist tool.

Trust in Cyberspace
Edited by Fred B. Schneider (National Academy Press, $45)
A major military-intelligence study of the security and reliability of the nations networked information systems.

What People Are Saying

William C. Taylor
Godin and his colleagues are working to persuade some of the most powerful companies in the world to reinvent how they relate to their customers. His argument is as stark as it is radical: Advertising just doesn’t work as well as it used to-in part because there’s so much of it, in part because people have learned to ignore it, in part because the rise of the Net means that companies can go beyond it. -- (William C. Taylor, Founding Editor, Fast Company)

Lester Wunderman
Advertisers are going to have to learn how to deliver messages with frequency and low cost if they areto cope with the increasing competition for the consumer’s attention. Seth Godin’s Permission Marketing is a big idea. -- (Lester Wunderman, Chairman-Emeritus of Wunderman Cato Johnson, the largest direct-marketing firm in the world, author of Being Direct)

Robert Tercek
The principles of permission marketing are incredibly valuable to everyone involved in media today. -- (Robert Tercek, SVP Digital Media, Sony Pictures Entertainment)

Mark Kwamme
Permission Marketing is a testament to Godin’s profound grasp of digital marketing. “Interruption Marketers” everywhere would do well to read this book. -- (Mark Kwamme, CEO, CKS Group)

Eric Hippeau
Finally, here’s a measurable method for marketing in a world filled with clutter. -- (Eric Hippeau, Chaiman, Ziff Davis Inc.)

Product Details

• Table of Contents
• Reading Group Guide
• Forewords & Introductions
• Read an Excerpt
• Read a Sample Chapter

Table of Contents

Reading Group Guide

Discussion Group Questions

1. What is the allowable for your company's product? If you don't know, how would you compute it?

2. What is the lifetime value of a customer to your company?

3. How could a curriculum approach to marketing help increase your sales?

4. Is Permission Marketing better at prospecting or retention? Why?

5. Is mass media dead? What role do ads play in your company's future?

Forewords & Introductions

Discussion Group Questions

1. What is the allowable for your company's product? If you don't know, how would you compute it?

2. What is the lifetime value of a customer to your company?

3. How could a curriculum approach to marketing help increase your sales?

4. Is Permission Marketing better at prospecting or retention? Why?

5. Is mass media dead? What role do ads play in your company's future?

Read an Excerpt

Chapter One: The Marketing Crisis That Money Won't Solve

You're not paying attention. Nobody is.

It's not your fault. It's just physically impossible for you to pay attention to everything that marketers expect you to — like the 17,000 new grocery store products that were introduced last year or the $1,000 worth of advertising that was directed exclusively at you last year.

Is it any wonder that consumers feel as if the fast-moving world around them is getting blurry? There's TV at the airport, advertisements in urinals, newsletters on virtually every topic, and a cellular phone wherever you go.

This is a book about the attention crisis in America and how marketers can survive and thrive in this harsh new environment. Smart marketers have discovered that the old way of advertising and selling products isn't working as well as it used to, and they're searching aggressively for a new, enterprising way to increase market share and profits. Permission Marketing is a fundamentally different way of thinking about advertising and customers.

THERE'S NO MORE ROOM FOR ALL THESE ADVERTISEMENTS!

I remember when I was about five years old and started watching television seriously. There were only three main channels — 2, 4, and 7, plus a public channel and UHF channel for when you were feeling adventuresome. I used to watch Ultraman every day after school on channel 29.

With just five channels to choose from, I quickly memorized the TV schedule. I loved shows like The Munsters, and I also had a great time with the TV commercials. Charlie the Tuna, Tony the Tiger, and those great board games that seemed magically to come aliveall vied for my attention. And they got it.

As I grew up, it seemed as though everyone I met was part of the same community. We saw the same commercials, bought the same stuff, discussed the same TV shows. Marketing was in a groove — if you invented a decent product and put enough money into TV advertising, you could be pretty sure you'd get shelf space in stores. And if the ads were any good at all, people bought the products.

About ten years ago I realized that a sea change was taking place. I had long ago ceased to memorize the TV schedules, I was unable to keep up with all the magazines I felt I should be reading, and with new alternatives like Prodigy and a book superstore, I fell hopelessly behind in my absorption of media.

I found myself throwing away magazines unopened. I was no longer interested enough in what a telemarketer might say to hesitate before hanging up. I discovered that I could live without hearing every new Bob Dylan album and that while there were plenty of great restaurants in New York City, the ones near my house in the suburbs were just fine.

The clutter, as you know, has only gotten worse. Try counting how many marketing messages you encounter today. Don't forget to include giant brand names on T-shirts, the logos on your computer, the Microsoft start-up banner on your monitor, radio ads, TV ads, airport ads, billboards, bumper stickers, and even the ads in your local paper.

For ninety years marketers have relied on one form of advertising almost exclusively. I call it Interruption Marketing. Interruption, because the key to each and every ad is to interrupt what the viewers are doing in order to get them to think about something else.

INTERRUPTION MARKETING — THE TRADITIONAL APPROACH TO GETTING CONSUMER ATTENTION

Almost no one goes home eagerly anticipating junk mail in their mailbox. Almost no one reads People magazine for the ads. Almost no one looks forward to a three-minute commercial interruption on must see TV.

Advertising is not why we pay attention. Yet marketers must make us pay attention for the ads to work. If they don't interrupt our train of thought by planting some sort of seed in our conscious or subconscious, the ads fall. Wasted money. If an ad falls in the forest and no one notices, there is no ad.

You can define advertising as the science of creating and placing media that interrupts the consumer and then gets him or her to take some action. That's quite a lot to ask of thirty seconds of TV time or twenty-five square inches of the newspaper, but without interruption there's no chance for action, and without action advertising flops.

As the marketplace for advertising gets more and more cluttered, it becomes increasingly difficult to interrupt the consumer. Imagine you're in an empty airport, early in the morning. There's hardly anyone there as you stroll leisurely toward your plane.

Suddenly someone walks up to you and says, "Excuse me, can you tell me how to get to gate seven?" Obviously you weren't hoping for, or expecting, someone to come up and ask this question, but since he looks nice enough and you've got a spare second, you interrupt your train of thought and point him on his way.

Now imagine the same airport, but it's three in the afternoon and you're late for your flight. The terminal is crowded with people, all jostling for position. You've been approached five times by various faux charities on your way to the gate, and to top it all off you've got a headache.

Same guy comes up to you and asks the same question. Odds are, your response will be a little different. If you're a New Yorker, you might ignore him altogether. Or you may stop what you were doing, say "Sorry," and then move on.

A third scenario is even worse. What if he's the fourth, or the tenth, or the one hundredth person who's asked you the same question? Sooner or later you're going to tune out the interruptions. Sooner or later it all becomes background noise.

Well, your life is a lot like that airport scene. You've got too much to do and not enough time to get it done. You're being accosted by strangers constantly. Every day you're exposed to more than four hours of media. Most of it is optimized to interrupt what you're doing. And it's getting increasingly harder and harder to find a little peace and quiet.

The ironic thing is that marketers have responded to this problem with the single worst cure possible. To deal with the clutter and the diminished effectiveness of Interruption Marketing, they're interrupting us even more!

That's right. Over the last thirty years advertisers have dramatically increased their ad spending. They've also increased the noise level of their ads — more jump cuts, more in-your-face techniques — and searched everywhere for new ways to interrupt your day.

Thirty years ago clothing did not carry huge logos. Commercial breaks on television were short. Magazines rarely had three hundred pages of ads (as many computer magazines do today). You could even watch PBS without seeing several references to the "underwriter."

As clutter has increased, advertisers have responded by increasing clutter. And as with pollution, because no one owns the problem, no one is working very hard to solve it.

CONSUMERS ARE SPENDING LESS TIME SEEKING ALTERNATIVE SOLUTIONS

In addition to clutter, there's another problem facing marketers. Consumers don't need to care as much as they used to. The quality of products has increased dramatically. It's increased so much, in fact, that it doesn't really matter which car you buy, which coffee maker you buy, or which shirt you buy. They're all a great value, and they're all going to last a good long while.

We've also come a long way as consumers. Ninety years ago it was unusual to find a lot of brand-name products in a consumer's house. Ninety years ago we made stuff, we didn't buy it. Today, however, we buy almost everything. Canned goods. Bread. Perked coffee. Even water. As a result, we already have a favorite brand of almost everything. If you like your favorite brand, why invest time in trying to figure out how to switch?

We're not totally locked in, of course. It wasn't too long ago that cake mix was a major innovation. Just a few years ago we needed to make major decisions about which airline was going to be our supplier of frequent flier miles. And today, if you're going to get health care, you've got to make a serious choice. But more often than not, you've already made your decisions and you're quite happy with them.

When was the last time someone launched a major new manufacturer of men's suits? Or a large nationwide chain of department stores? Or a successful new nationwide airline? Or a fast-food franchise? It can be done, certainly, but it doesn't happen very often. One of the reasons it's such a difficult task is that we're pretty satisfied as consumers.

If the deluge of new products ceased tomorrow, almost no one would mind. How much more functional can a T-shirt get? Except for fast-moving industries like computers, the brands we have today are good enough to last us for years and years. Because our needs as consumers are satisfied, we've stopped looking really hard for new solutions.

Yet because of the huge profits that accrue to marketers who do invent a successful new brand, a new killer product, a new category, the consumer is deluged with messages. Because it's not impossible to get you to switch from MCI to Sprint, or from United Airlines to American Airlines, or from Reebok to Nike, marketers keep trying. It's estimated that the average consumer sees about one million marketing messages a year — about 3,000 a day.

That may seem like a lot, but one trip to the supermarket alone can expose you to more than 10,000 marketing messages! An hour of television might deliver forty or more, while an issue of the newspaper might have as many as one hundred. Add to that all the logos, wallboards, junk mail, catalogs, and unsolicited phone calls you have to process every day, and it's pretty easy to hit that number. A hundred years ago there wasn't even a supermarket, there wasn't a TV show, and there weren't radio stations.

MASS MEDIA IS DEAD. LONG LIVE NICHE MEDIA!

Technology and the marketplace have also brought the consumer a glut of ways to be exposed to advertising. When the FCC ruled the world of television, there were only three networks and a handful of independents. Networks made a fortune because they were the only game in town. Now there are dozens — and, in some areas, hundreds — of TV channels to choose from.

The final episode of Seinfeld made media headlines. Yet thirty years ago Seinfeld's ratings wouldn't have made Nielsen's list of top twenty-five shows of the season. With an almost infinite number of options, the chances of a broadcast, even a network broadcast, reaching almost everyone are close to zero.

Even worse is the World Wide Web. At last count there were nearly two million different commercial Web sites. That means there are about twenty-five people online for every single Web site...hardly a mass market of interest to an Interruption Marketer.

Alta Vista, one of the most complete and most visited search engines on the Internet, claims to have indexed 100 million pages. That means their computer has surfed and scanned 100 million pages of information, and if you do a search, that's the database you're searching through.

It turns out that in response to people who do searches online, Alta Vista delivers about 900 million pages a month. That means the average page that they have indexed in their search engine is called up exactly nine times a month. Imagine that. Millions of dollars invested in building snazzy corporate marketing sites and an average of nine people a month search for and find any given page of information on this search engine.

This is a very, very big haystack, and Interruption Marketers don't have that many needles.

Marketers have invested (and almost completely wasted) more than a billion dollars on Web sites as a way of cutting through the clutter. General Electric has a site with thousands of pages. Ziff-Davis offers a site with more than 250,000 pages! And a direct result of this attempt to cut through the clutter is the most cluttered, least effective marketing of all.

THE FOUR APPROACHES TO KEEPING MASS MARKETING ALIVE

A quick look at the newsstand at Barnes & Noble will confirm that the problem of clutter saturation isn't limited to electronic media. There are enough consumer magazines (ignoring the even larger category of trade magazines for a moment) to keep a reader busy reading magazines full-time, twenty-four hours a day, seven days a week.

Obviously the mass market is dying. The vast splintering of media means that a marketer can't reach a significant percentage of the population with any single communication. That's one reason the Super Bowl can charge so much for advertisements. Big events are unique in their ability to deliver about half the consumers watching TV, so they're the perfect platform for Interruption Marketing aimed at the mass audience.

Other than buying even more traditional advertising, how are mass marketers dealing with this profound infoglut? They're taking four approaches:

1. First, they're spending more in odd places. Not just on traditional TV ads, but on a wide range of interesting and obscure media. Campbell's Soup bought ads on parking meters. Macy's spends a fortune on its parade. Kellogg's has spent millions building a presence on the World Wide Web — a fascinating way to sell cereal.

Companies have seen that a mass market broadcast strategy isn't working as well as it used to, especially when targeting the hard-to-reach upper-income demographic. As this lucrative audience spends less time watching TV, marketers are working overtime trying to find media with less clutter, where their interruption techniques can be more effective.

Marketers hire Catalina Corporation to print their coupons on the back of receipts at the grocery store. They buy ads on the floor of the cereal aisle. There are ads atop taxis in New York City and on the boards around the rink at the hockey game. Fox even figured out a way to sell the rights to the small area over the catcher's shoulder, so TV viewers would see the ad throughout an entire baseball game.

2. The second technique is to make advertisements ever more controversial and entertaining. Coca-Cola hired talent agency CAA to enlist topflight Hollywood directors to make commercials. Candies features a woman sitting on a toilet in its magazine ads (for shoes!). Spike Lee's ad agency did more than $50 million in billings last year.

Of course, as the commercials try harder to get your attention, the clutter becomes even worse. An advertiser who manages to top a competitor for the moment has merely raised the bar. Their next ad will have to be even more outlandish in order to top the competition, not to mention their previous ad, to keep the consumer's attention.

The cost of making a first-rate TV commercial is actually far more, per minute, than that of producing a major Hollywood motion picture. Talking frogs, computer graphics, and intense editing now seem to be a requirement.

A side effect of the focus on entertainment is that it gives the marketer far less time to actually market. In a fifteen-second commercial (increasingly attractive as a cost-cutting way to interrupt people even more often), ten or even twelve seconds are devoted to getting your attention, while just a few heartbeats are reserved for the logo, the benefit, and the call to action.

Take the interruption challenge! Write down all the companies that ran commercials during your favorite TV show last night. Write down all the companies that paid good money to buy banners on the Web during your last surfing expedition. If you can list more than 10 percent of them, you're certainly the exception.

3. The third approach used to keep mass marketing alive is to change ad campaigns more often in order to keep them "interesting and fresh." Tony the Tiger and Charlie the Tuna and the Marlboro man are each worth billions of dollars in brand equity to the companies that built them. The marketers behind them have invested a fortune over the last forty years making them trusted spokesmen (or spokesanimals) for their brands.

Nike, on the other hand, just ran a series of ads without the swoosh, arguably one of the most effective logos of the last generation. Apple Computer changes its tag line annually. Wendy's and McDonald's and Burger King jump from one approach to the other, all hoping for a holy grail that captures attention.

In exchange for these brief bits of attention (remember the hoopla when they replaced Mikey on the Life box?) these marketers are trading in the benefits of a long-term brand recognition campaign. It's a trade they're willing to make, because Interruption Marketing requires it. Without attention, there is no ad.

4. The fourth and last approach, which is as profound as the other three, is that many marketers are abandoning advertising and replacing it with direct mail and promotions. Marketers now allocate about 52 percent of their annual ad budgets for direct mail and promotions, a significant increase over past years.Of the more than $200 billion spent on consumer advertising last year in the United States, more than $100 billion was spent on direct mail campaigns, in-store promotions, coupons, freestanding inserts, and other nontraditional media. Last year alone Wunderman, Cato, Johnson did more than $1.6 billion in billings for its clients (folks like AT&T).

The next time you get a glossy mailing for a Lexus or enter an instant win sweepstakes at the liquor store, you're seeing the results of this trend toward increased direct marketing efforts. Advertisers are using them because they work. They are somewhat more effective at interrupting you than an ad. They're somewhat more measurable than a billboard. Best of all, they give the marketers another tool to use in their increasingly frustrating fight against clutter. After all, there are only five or ten pieces of junk mail in your mailbox every day — not 3,000. And another few feet of shelf space at the supermarket can lead to a dramatic upturn in sales.

DIRECT MARKETING BREAKS THROUGH THE CLUTTER, TEMPORARILY

Even though they work better than advertising, these techniques are astonishingly wasteful. A 2 percent response for a direct mail campaign will earn the smart marketer a raise at most companies. But a 2 percent response means that the same campaign was trashed, ignored, or rejected by an amazing 98 percent of the target audience! From the perspective of the marketer, however, if the campaign earns more than it costs, it's worth doing again.

Of course, just as suburbanites learned when they fled the city to avoid the crowds, if a strategy works, other people will be right on your heels. That bucolic countryside fills up rapidly with other people looking to get away from it all. Correspondingly, as each of these promotional media becomes measurably effective, every smart marketer rushes to join in. Finding a unique approach that cuts through the clutter is usually very short-lived.

Virtually every supermarket now charges a shelving allowance, for example, which manufacturers pay for if they want more shelf space for their products. Every liquor store is already jammed with promotions. Every mailbox in the country is brimming with catalogs for clothes, gardening equipment, and fountain pens.

Direct marketers are responding to this glut by using computers. With access to vast amounts of computerized customer information, marketers can collate and cross-reference a database of names to create a finely tuned mailing list and then send them highly targeted messages. For example, a direct marketer might discover that based on past results, the best prospects for its next campaign are single women who are registered Democrats, who make more than $58,000 a year, and who have no balance on their credit card. This information is easily available, and marketers are now racing to make their direct marketing ever more targeted.

Of course, database marketing is a weapon available to any marketer, so like all trends in Interruption Marketing, this one will soon lose its edge. When others jump in as well, the clutter will inevitably catch up.

The last frontier of Interruption Marketing appears to be exemplified by the movie Titanic. James Cameron showed the world that outspending any rational marketer will indeed cut through the clutter. Hollywood has jumped on this bandwagon with marketing campaigns for Godzilla and other films that at first glance can't possibly bring in enough ticket sales to justify the expense.

Nike uses the same approach to sell sneakers, and now this radical overspending strategy is being used by others, especially on the Internet. The thinking behind it is based on an all-or-nothing roll of the dice. Basically, because clutter is so pervasive, anyone who can successfully break through and create a new mass market product will reap huge rewards. And betting vast amounts of other people's money on that breakthrough is one way to play.

Of course, once there's a proven pattern that big spending can win, others in the category will jump in as well. The bar will be raised yet again, and the only winners will be the media companies that sell the airtime and ad space in the first place.

WHY AD AGENCIES DON'T WORK TO SOLVE THE PROBLEM

What about the ad agencies? With so many talented people, why aren't they working to solve this problem?

Unfortunately the clutter wars are taking their casualties at the agency side as well. The big agencies, the ones that could afford to take the lead in this challenge, are faced with three dismal problems:

1. First, clients are giving the agencies a much shorter leash. Leo Burnett used to keep clients for twenty or thirty years. Levi's stayed at FCB for sixty-eight years. That's so long that not one person at either company was probably born when the account work was started on Levi's.

Today, however, it's not unusual for a marketer to change agencies after two or three years. Companies that fired their ad agencies in the last year include Bank of America, Compaq, Goodyear, and many more.

2. The second problem is that the stock market has been conducive to agency consolidations. The best way to make money in advertising today is to buy ad agencies and take them public. As a result, some of the best minds in the business have been focusing on building agencies, not brands.

3. Last, the commission structure that every ad agency was built upon has been dramatically dismantled. Traditionally agencies were paid by media companies. They got to keep 15 percent of all the ad money the client spent on ad space in the form of a commission from the magazines and TV networks where they ran their ads. This meant that big clients could generate huge profits for the ad agencies, which funded work on new approaches to advertising as well as the innovative ads for new, smaller clients. But now the big guys have decided to put a stop to this subsidizing, and it's rare to find an ad agency that still gets a straight 15 percent commission on media buys for their big clients.

INTERRUPTION MARKETERS FACE A CATCH-22

To summarize the problem that faces the Interruption Marketer:

1. Human beings have a finite amount of attention.

You can't watch everything, remember everything, or do everything. As the amount of noise in your life increases, the percentage of messages that get through inevitably decreases.

2. Human beings have a finite amount of money.

You also can't buy everything. You have to choose. But because your attention is limited, you'll be able to choose only from those things you notice.

3. The more products offered, the less money there is to go around.

It's a zero sum game. Every time you buy a Coke, you don't buy a Pepsi. As the number of companies offering products increases, and as the number of products each company offers multiplies, it's inevitable that there will be more losers than winners.

4. In order to capture more attention and more money, Interruption Marketers must increase spending.

Spending less money than your competitors on advertising in a cluttered environment inevitably leads to decreased sales.

5. But this increase in marketing exposure costs big money.

Interruption Marketers have no choice but to spend a bigger and bigger portion of their company's budgets on breaking through the clutter.

6. But, as you've seen, spending more and more money in order to get bigger returns leads to ever more clutter.

7. Catch-22: The more they spend, the less it works. The less it works, the more they spend.

Is mass marketing due for a cataclysmic shakeout? Absolutely. A new form of marketing is changing the landscape, and it will affect Interruption Marketing as significantly as the automobile affected the makers of buggy whips.

Copyright © 1999 by Seth Godin

Chapter Two: Permission Marketing — The Way to Make Advertising Work Again

Powerful advertising is anticipated, personal, and relevant.

What if you could turn clutter into an asset? What if the tremendous barriers faced by Interruption Marketers actually became an advantage for you and your company? The truth is that even though clutter is bad and getting worse, Permission Marketers turn clutter to their advantage. In fact, the worse the clutter gets, the more profitable your Permission Marketing efforts become.

In this chapter I'm going to outline the core ideas behind Permission Marketing. Every marketing campaign gets better when an element of permission is added. In some cases, a switch to marketing with permission can fundamentally change a company's entire business model and profit structure. At the very least, the basic concepts of permission will help you formulate and launch every marketing campaign with greater insight and success.

Interruption Marketing fails because it is unable to get enough attention from consumers. Permission Marketing works by taking advantage of the same problem — there just isn't enough attention to go around.

WE ARE ALL RUNNING OUT OF TIME

Two hundred years ago natural resources and raw materials were scarce. People needed land to grow food, metal to turn into pots, and silicates and other natural elements to make windows for houses. Tycoons who cornered the market in these and other resources made a fortune. By making a market in a scarce resource, you can make a profit.

With the birth of the Industrial Revolution, and the growth of our consumer economy, the resource scarcity shifted from raw materials to finished goods. Factories were at capacity. The great industrialists, like Carnegie and Ford, earned their millions by providing what the economy demanded. Marketers could call the shots, because other options were scarce.

Once factories caught up with demand, marketers developed brands that consumers would desire and pay a premium to own. People were willing to walk a mile for a Camel, and they'd rather fight than switch their brand of cigarette. When brands were new and impressive, owning the right brand was vital.

But in today's free market there are plenty of factories, plenty of brands, and way too many choices. With just a little effort and a little savings we can get almost anything we want. You can find a TV set in every house in this country. People throw away their broken microwave ovens instead of having them repaired.

This surplus situation, or abundance of goods, is especially clear when it comes to information and services. Making another copy of a software program or printing another CD costs almost nothing. Bookstores compete to offer 50,000, 100,000, or even 1 million different books — each for less than $25. There's a huge surplus of intellectual property and services out there.

Imagine a tropical island populated by people with simple needs and plenty of resources. You won't find a bustling economy there. That's because you need two things in order to have an economy: people who want things, and a scarcity of things they want. Without scarcity, there's no basis for an economy.

When there's an abundance of any commodity, the value of that commodity plummets. If a commodity can be produced at will and costs little or nothing to create, it's not likely to be scarce, either. That's the situation with information and services today. They're abundant and cheap. Information on the Web, for example, is plentiful and free.

Software provides another example. The most popular Web server is not made by Microsoft or Netscape. And it doesn't cost $1,000 or $10,000. It's called Apache, and it's created by a loosely knit consortium of programmers, and it's totally free. Free to download, free to use. As resources go, information is not scarce.

There is one critical resource, though, that is in chronically short supply. Bill Gates has just as much as you do. And even Warren Buffet can't buy more. That scarce resource is time. And in light of today's information glut, that means there's a vast shortage of attention.

This combined shortage of time and attention is unique to today's information age. Consumers are now willing to pay handsomely to save time, while marketers are eager to pay bundles to get attention.

Interruption Marketing is the enemy of anyone trying to save time. By constantly interrupting what we are doing at any given moment, the marketer who interrupts us not only tends to fail at selling his product, but wastes our most coveted commodity, time. In the long run, therefore, Interruption Marketing is doomed as a mass marketing tool. The cost to the consumer is just too high.

The alternative is Permission Marketing, which offers the consumer an opportunity to volunteer to be marketed to. By talking only to volunteers, Permission Marketing guarantees that consumers pay more attention to the marketing message. It allows marketers to tell their story calmly and succinctly, without fear of being interrupted by competitors or Interruption Marketers. It serves both consumers and marketers in a symbiotic exchange.

Permission Marketing encourages consumers to participate in a long-term, interactive marketing campaign in which they are rewarded in some way for paying attention to increasingly relevant messages. Imagine your marketing message being read by 70 percent of the prospects you send it to (not 5 percent or even 1 percent). Then imagine that more than 35 percent respond. That's what happens when you interact with your prospects one at a time, with individual messages, exchanged with their permission over time.

Permission marketing is anticipated, personal, relevant.

Anticipated — people look forward to hearing from you.

Personal — the messages are directly related to the individual.

Relevant — the marketing is about something the prospect is interested in.

I know what you're thinking. There's a catch. If you have to personalize every customer message, that's prohibitive. If you're still thinking within the framework of traditional marketing, you're right. But in today's information age, targeting customers individually is not as difficult as it sounds. Permission Marketing takes the cost of interrupting the consumer and spreads it out, over not one message, but dozens of messages. And this leverage leads to substantial competitive advantages and profits. While your competition continues to interrupt strangers with mediocre results, your Permission Marketing campaign is turning strangers into friends and friends into customers.

The easiest way to contrast the Interruption Marketer with the Permission Marketer is with an analogy about getting married. It also serves to exemplify how sending multiple individualized messages over time works better than a single message, no matter how impressive that single message is.

THE TWO WAYS TO GET MARRIED

The Interruption Marketer buys an extremely expensive suit. New shoes. Fashionable accessories. Then, working with the best database and marketing strategists, selects the demographically ideal singles bar.

Walking into the singles bar, the Interruption Marketer marches up to the nearest person and proposes marriage. If turned down, the Interruption Marketer repeats this process on every person in the bar.

If the Interruption Marketer comes up empty-handed after spending the entire evening proposing, it is obvious that the blame should be placed on the suit and the shoes. The tailor is fired. The strategy expert who picked the bar is fired. And the Interruption Marketer tries again at a different singles bar.

If this sounds familiar, it should. It's the way most large marketers look at the world. They hire an agency. They build fancy ads. They "research" the ideal place to run the ads. They interrupt people and hope that one in a hundred will go ahead and buy something. Then, when they fail, they fire their agency!

The other way to get married is a lot more fun, a lot more rational, and a lot more successful. It's called dating.

A Permission Marketer goes on a date. If it goes well, the two of them go on another date. And then another. Until, after ten or twelve dates, both sides can really communicate with each other about their needs and desires. After twenty dates they meet each other's families. Finally, after three or four months of dating, the Permission Marketer proposes marriage.

Permission Marketing is just like dating. It turns strangers into friends and friends into lifetime customers. Many of the rules of dating apply, and so do many of the benefits.

THE FIVE STEPS TO DATING YOUR CUSTOMER

Every marketer must offer the prospective customer an incentive for volunteering. In the vernacular of dating, that means you have to offer something that makes it interesting enough to go out on a first date. A first date, after all, represents a big investment in time, money, and ego. So there had better be reason enough to volunteer.

Without a selfish reason to continue dating, your new potential customer (and your new potential date) will refuse you a second chance. If you don't provide a benefit to the consumer for paying attention, your offer will suffer the same fate as every other ad campaign that's vying for their attention. It will be ignored.

The incentive you offer to the customer can range from information, to entertainment, to a sweepstakes, to outright payment for the prospect's attention. But the incentive must be overt, obvious, and clearly delivered.

This is the most obvious difference between Permission Marketing and Interruption Marketing. Interruption Marketers spend all their time interrupting strangers, in an almost pitiful attempt to bolster popularity and capture attention. Permission Marketers spend as little time and money talking to strangers as they can. Instead they move as quickly as they can to turn strangers into prospects who choose to "opt in" to a series of communications.

Second, using the attention offered by the consumer, the marketer offers a curriculum over time, teaching the consumer about the product or service he has to offer. The Permission Marketer knows that the first date is an opportunity to sell the other person on a second date. Every step along the way has to be interesting, useful, and relevant.

Since the prospect has agreed to pay attention, it's much easier to teach him about your product. Instead of filling each ensuing message with entertainment designed to attract attention or with sizzle designed to attract the attention of strangers, the Permission Marketer is able to focus on product benefits — on specific, focused ways this product will help that prospect. Without question, this ability to talk freely over time is the most powerful element of this marketing approach.

The third step involves reinforcing the incentive. Over time, any incentive wears out. Just as your date may tire of even the finest restaurant, the prospective customer may show fatigue with the same repeated incentive. The Permission Marketer must work to reinforce the incentive, to be sure that the attention continues. This is surprisingly easy. Because this is a two-way dialogue, not a narcissistic monologue, the marketer can adjust the incentives being offered and fine-tune them for each prospect.

Along with reinforcing the incentive, the fourth step is to increase the level of permission the marketer receives from the potential customer. Now I won't go into detail on what step of the dating process this corresponds to, but in marketing terms, the goal is to motivate the consumer to give more and more permission over time. Permission to gather more data about the customer's personal life, or hobbies, or interests. Permission to offer a new category of product for the customer's consideration. Permission to provide a product sample. The range of permission you can obtain from a customer is very wide and limited only by its relevance to the customer.

Over time, the marketer uses the permission he's obtained to change consumer behavior — that is, get them to say "I do." That's how you turn permission into profits. After permission is granted, that's how it becomes a truly significant asset for the marketer. Now you can live happily ever after by repeating the aforementioned process while selling your customer more and more products. In other words, the fifth and final step is to leverage your permission into a profitable situation for both of you. Remember, you have access to the most valuable thing a customer can offer — attention.

Five Steps to Dating Your Customer

1. Offer the prospect an incentive to volunteer.

2. Using the attention offered by the prospect, offer a curriculum over time, teaching the consumer about your product or service.

3. Reinforce the incentive to guarantee that the prospect maintains the permission.

4. Offer additional incentives to get even more permission from the consumer.

5. Over time, leverage the permission to change consumer behavior toward profits.

PERMISSION IS AN INVESTMENT

Nothing good is free, and that goes double for permission. Acquiring solid, deep permission from targeted customers is an investment.

What is one permission worth? According to their annual report, AOL has paid as much as $300 to get one new customer. American Express invests nearly $150 to get a new cardholder. Does American Express earn enough in fees to justify this expense? Not at all. But the other benefits associated with acquiring the permission to market to a card member outweigh the high cost. Amex sells its customers a wide range of products, not just an American Express card. They also use sophisticated database management tools to track customer behavior so they can tailor offers to individuals. They leverage their permission to increase revenue.

One of the leading brokerage houses on Wall Street is currently paying $15 in media acquisition costs just for permission to call a potential customer on the phone! Yes, it's that expensive, and yes, it's worth even more than that. They've discovered that the yield from an anticipated, welcomed, personal phone call is so much higher than a cold call during dinner that they're willing to pay handsomely for the privilege.

While these (and other) marketers have discovered the power of permission, many Interruption Marketers have found, to their chagrin, that the cost of generating one new customer is rapidly approaching the net present value of that consumer. In other words, they're close to losing money on every customer, so they try to make it up in volume.

Permission Marketing cuts through the clutter and allows a marketer to speak to prospects as friends, not strangers. This personalized, anticipated, frequent, and relevant communication has infinitely more impact than a random message displayed in a random place at a random moment.

Permission Marketing Is Anticipated, Personal, Relevant

Anticipated — people look forward to hearing from you.

Personal — the messages are directly related to the individual.

Relevant — the marketing is about something the prospect is interested in.

Think about choosing a nice restaurant for dinner. If you learn about a restaurant from a cold-calling telemarketer or from an unsolicited direct mail piece, you're likely to ignore the recommendation. But if a trusted friend offers a restaurant recommendation, you're likely to try it out.

Permission Marketing lets you turn strangers, folks who might otherwise ignore your unsolicited offer, into people willing to pay attention when your message arrives in an expected, appreciated way.

An Interruption Marketer looks for a job by sending a rèsumè to one thousand strangers. A Permission Marketer gets a job by focusing on one company and networking with it, consulting for it, and working with it until the company trusts him enough to offer him a full-time position.

A book publisher that uses Interruption Marketing sells children's books by shipping them to bookstores, hoping that the right audience will stumble across them. A Permission Marketer builds book clubs at every school in the country.

An Interruption Marketer sells a new product by introducing it on national TV. A Permission Marketer sells a new product by informing all her existing customers about a way to get a free sample.

PERMISSION MARKETING IS AN OLD CONCEPT WITH NEW RELEVANCE

Permission Marketing isn't as glamorous as hiring Steven Spielberg to direct a commercial starring a bevy of supermodels. It isn't as easy as running an ad a few more times. It isn't as cheap as building a Web site and hoping that people find it on a search engine. In fact, it's hard work.

Worst of all, Permission Marketing requires patience. Permission Marketing campaigns grow over time — the opposite of what most marketers look for these days. And Permission Marketing requires a leap of faith. Even a bad interruption campaign gets some results right away, while a permission campaign requires infrastructure and a belief in the durability of the permission concept before it blossoms with success.

But unlike Interruption Marketing, Permission Marketing is a measurable process. It evolves over time for every company that uses it. It becomes an increasingly valuable asset. The more you commit to Permission Marketing campaigns, the better they work over time. And these fast-moving, leveragable processes are the key to success in our cluttered age.

So if Permission Marketing is so effective, and the ideas behind it not really new, why was the concept not used with effectiveness years ago? Why was this book just published?

Permission Marketing has been around forever (or at least as long as dating), but it takes advantage of new technology better than other forms of marketing. The Internet is the greatest direct mail medium of all time, and the low cost of frequent interaction makes it ideal for Permission Marketing.

Originally, the Internet captured the attention of Interruption Marketers. They rushed in, spent billions of dollars applying their Interruption Marketing techniques, and discovered almost total failure. Permission Marketing is the tool that unlocks the power of the Internet. The leverage it brings to this new medium, combined with the pervasive clutter that infects the Internet and virtually every other medium, makes Permission Marketing the most powerful trend in marketing for the next decade.

As new forms of media develop and clutter becomes ever more intense, it's the asset of permission that will generate profits for marketers.

Copyright © 1999 by Seth Godin

Read a Sample Chapter

It's not your fault. It's just physically impossible for you to pay attention to everything that marketers expect you to -- like the 17,000 new grocery store products that were introduced last year or the $1,000 worth of advertising that was directed exclusively at you last year.

Is it any wonder that consumers feel as if the fast-moving world around them is getting blurry? There's TV at the airport, advertisements in urinals, newsletters on virtually every topic, and a cellular phone wherever you go.

This is a book about the attention crisis in America and how marketers can survive and thrive in this harsh new environment. Smart marketers have discovered that the old way of advertising and selling products isn't working as well as it used to, and they're searching aggressively for a new, enterprising way to increase market share and profits. Permission Marketing is a fundamentally different way of thinking about advertising and customers.

THERE'S NO MORE ROOM FOR ALL THESE ADVERTISEMENTS!

I remember when I was about five years old and started watching television seriously. There were only three main channels -- 2, 4, and 7, plus a public channel and UHF channel for when you were feeling adventuresome. I used to watch Ultraman every day after school on channel 29.

With just five channels to choose from, I quickly memorized the TV schedule. I loved shows like The Munsters, and I also had a great time with the TV commercials. Charlie the Tuna, Tony the Tiger, and those great board games that seemed magically to come alive all vied for my attention. And they got it.

As I grew up, it seemed as though everyone I met was part of the same community. We saw the same commercials, bought the same stuff, discussed the same TV shows. Marketing was in a groove -- if you invented a decent product and put enough money into TV advertising, you could be pretty sure you'd get shelf space in stores. And if the ads were any good at all, people bought the products.

About ten years ago I realized that a sea change was taking place. I had long ago ceased to memorize the TV schedules, I was unable to keep up with all the magazines I felt I should be reading, and with new alternatives like Prodigy and a book superstore, I fell hopelessly behind in my absorption of media.

I found myself throwing away magazines unopened. I was no longer interested enough in what a telemarketer might say to hesitate before hanging up. I discovered that I could live without hearing every new Bob Dylan album and that while there were plenty of great restaurants in New York City, the ones near my house in the suburbs were just fine.

The clutter, as you know, has only gotten worse. Try counting how many marketing messages you encounter today. Don't forget to include giant brand names on T-shirts, the logos on your computer, the Microsoft start-up banner on your monitor, radio ads, TV ads, airport ads, billboards, bumper stickers, and even the ads in your local paper.

For ninety years marketers have relied on one form of advertising almost exclusively. I call it Interruption Marketing. Interruption, because the key to each and every ad is to interrupt what the viewers are doing in order to get them to think about something else.

INTERRUPTION MARKETING -- THE TRADITIONAL APPROACH TO GETTING CONSUMER ATTENTION

Almost no one goes home eagerly anticipating junk mail in their mailbox. Almost no one reads People magazine for the ads. Almost no one looks forward to a three-minute commercial interruption on must see TV.

Advertising is not why we pay attention. Yet marketers must make us pay attention for the ads to work. If they don't interrupt our train of thought by planting some sort of seed in our conscious or subconscious, the ads fall. Wasted money. If an ad falls in the forest and no one notices, there is no ad.

You can define advertising as the science of creating and placing media that interrupts the consumer and then gets him or her to take some action. That's quite a lot to ask of thirty seconds of TV time or twenty-five square inches of the newspaper, but without interruption there's no chance for action, and without action advertising flops.

As the marketplace for advertising gets more and more cluttered, it becomes increasingly difficult to interrupt the consumer. Imagine you're in an empty airport, early in the morning. There's hardly anyone there as you stroll leisurely toward your plane.

Suddenly someone walks up to you and says, "Excuse me, can you tell me how to get to gate seven?" Obviously you weren't hoping for, or expecting, someone to come up and ask this question, but since he looks nice enough and you've got a spare second, you interrupt your train of thought and point him on his way.

Now imagine the same airport, but it's three in the afternoon and you're late for your flight. The terminal is crowded with people, all jostling for position. You've been approached five times by various faux charities on your way to the gate, and to top it all off you've got a headache.

Same guy comes up to you and asks the same question. Odds are, your response will be a little different. If you're a New Yorker, you might ignore him altogether. Or you may stop what you were doing, say "Sorry," and then move on.

A third scenario is even worse. What if he's the fourth, or the tenth, or the one hundredth person who's asked you the same question? Sooner or later you're going to tune out the interruptions. Sooner or later it all becomes background noise.

Well, your life is a lot like that airport scene. You've got too much to do and not enough time to get it done. You're being accosted by strangers constantly. Every day you're exposed to more than four hours of media. Most of it is optimized to interrupt what you're doing. And it's getting increasingly harder and harder to find a little peace and quiet.

The ironic thing is that marketers have responded to this problem with the single worst cure possible. To deal with the clutter and the diminished effectiveness of Interruption Marketing, they're interrupting us even more!

That's right. Over the last thirty years advertisers have dramatically increased their ad spending. They've also increased the noise level of their ads -- more jump cuts, more in-your-face techniques -- and searched everywhere for new ways to interrupt your day.

Thirty years ago clothing did not carry huge logos. Commercial breaks on television were short. Magazines rarely had three hundred pages of ads (as many computer magazines do today). You could even watch PBS without seeing several references to the "underwriter."

As clutter has increased, advertisers have responded by increasing clutter. And as with pollution, because no one owns the problem, no one is working very hard to solve it.

CONSUMERS ARE SPENDING LESS TIME SEEKING ALTERNATIVE SOLUTIONS

In addition to clutter, there's another problem facing marketers. Consumers don't need to care as much as they used to. The quality of products has increased dramatically. It's increased so much, in fact, that it doesn't really matter which car you buy, which coffee maker you buy, or which shirt you buy. They're all a great value, and they're all going to last a good long while.

We've also come a long way as consumers. Ninety years ago it was unusual to find a lot of brand-name products in a consumer's house. Ninety years ago we made stuff, we didn't buy it. Today, however, we buy almost everything. Canned goods. Bread. Perked coffee. Even water. As a result, we already have a favorite brand of almost everything. If you like your favorite brand, why invest time in trying to figure out how to switch?

We're not totally locked in, of course. It wasn't too long ago that cake mix was a major innovation. Just a few years ago we needed to make major decisions about which airline was going to be our supplier of frequent flier miles. And today, if you're going to get health care, you've got to make a serious choice. But more often than not, you've already made your decisions and you're quite happy with them.

When was the last time someone launched a major new manufacturer of men's suits? Or a large nationwide chain of department stores? Or a successful new nationwide airline? Or a fast-food franchise? It can be done, certainly, but it doesn't happen very often. One of the reasons it's such a difficult task is that we're pretty satisfied as consumers.

If the deluge of new products ceased tomorrow, almost no one would mind. How much more functional can a T-shirt get? Except for fast-moving industries like computers, the brands we have today are good enough to last us for years and years. Because our needs as consumers are satisfied, we've stopped looking really hard for new solutions.

Yet because of the huge profits that accrue to marketers who do invent a successful new brand, a new killer product, a new category, the consumer is deluged with messages. Because it's not impossible to get you to switch from MCI to Sprint, or from United Airlines to American Airlines, or from Reebok to Nike, marketers keep trying. It's estimated that the average consumer sees about one million marketing messages a year -- about 3,000 a day.

That may seem like a lot, but one trip to the supermarket alone can expose you to more than 10,000 marketing messages! An hour of television might deliver forty or more, while an issue of the newspaper might have as many as one hundred. Add to that all the logos, wallboards, junk mail, catalogs, and unsolicited phone calls you have to process every day, and it's pretty easy to hit that number. A hundred years ago there wasn't even a supermarket, there wasn't a TV show, and there weren't radio stations.

MASS MEDIA IS DEAD. LONG LIVE NICHE MEDIA!

Technology and the marketplace have also brought the consumer a glut of ways to be exposed to advertising. When the FCC ruled the world of television, there were only three networks and a handful of independents. Networks made a fortune because they were the only game in town. Now there are dozens -- and, in some areas, hundreds -- of TV channels to choose from.

The final episode of Seinfeld made media headlines. Yet thirty years ago Seinfeld's ratings wouldn't have made Nielsen's list of top twenty-five shows of the season. With an almost infinite number of options, the chances of a broadcast, even a network broadcast, reaching almost everyone are close to zero.

Even worse is the World Wide Web. At last count there were nearly two million different commercial Web sites. That means there are about twenty-five people online for every single Web site...hardly a mass market of interest to an Interruption Marketer.

Alta Vista, one of the most complete and most visited search engines on the Internet, claims to have indexed 100 million pages. That means their computer has surfed and scanned 100 million pages of information, and if you do a search, that's the database you're searching through.

It turns out that in response to people who do searches online, Alta Vista delivers about 900 million pages a month. That means the average page that they have indexed in their search engine is called up exactly nine times a month. Imagine that. Millions of dollars invested in building snazzy corporate marketing sites and an average of nine people a month search for and find any given page of information on this search engine.

This is a very, very big haystack, and Interruption Marketers don't have that many needles.

Marketers have invested (and almost completely wasted) more than a billion dollars on Web sites as a way of cutting through the clutter. General Electric has a site with thousands of pages. Ziff-Davis offers a site with more than 250,000 pages! And a direct result of this attempt to cut through the clutter is the most cluttered, least effective marketing of all.

THE FOUR APPROACHES TO KEEPING MASS MARKETING ALIVE

A quick look at the newsstand at Barnes & Noble will confirm that the problem of clutter saturation isn't limited to electronic media. There are enough consumer magazines (ignoring the even larger category of trade magazines for a moment) to keep a reader busy reading magazines full-time, twenty-four hours a day, seven days a week.

Obviously the mass market is dying. The vast splintering of media means that a marketer can't reach a significant percentage of the population with any single communication. That's one reason the Super Bowl can charge so much for advertisements. Big events are unique in their ability to deliver about half the consumers watching TV, so they're the perfect platform for Interruption Marketing aimed at the mass audience.

Other than buying even more traditional advertising, how are mass marketers dealing with this profound infoglut? They're taking four approaches:

1. First, they're spending more in odd places. Not just on traditional TV ads, but on a wide range of interesting and obscure media. Campbell's Soup bought ads on parking meters. Macy's spends a fortune on its parade. Kellogg's has spent millions building a presence on the World Wide Web -- a fascinating way to sell cereal.

Companies have seen that a mass market broadcast strategy isn't working as well as it used to, especially when targeting the hard-to-reach upper-income demographic. As this lucrative audience spends less time watching TV, marketers are working overtime trying to find media with less clutter, where their interruption techniques can be more effective.

Marketers hire Catalina Corporation to print their coupons on the back of receipts at the grocery store. They buy ads on the floor of the cereal aisle. There are ads atop taxis in New York City and on the boards around the rink at the hockey game. Fox even figured out a way to sell the rights to the small area over the catcher's shoulder, so TV viewers would see the ad throughout an entire baseball game.

2. The second technique is to make advertisements ever more controversial and entertaining. Coca-Cola hired talent agency CAA to enlist topflight Hollywood directors to make commercials. Candies features a woman sitting on a toilet in its magazine ads (for shoes!). Spike Lee's ad agency did more than $50 million in billings last year.

Of course, as the commercials try harder to get your attention, the clutter becomes even worse. An advertiser who manages to top a competitor for the moment has merely raised the bar. Their next ad will have to be even more outlandish in order to top the competition, not to mention their previous ad, to keep the consumer's attention.

The cost of making a first-rate TV commercial is actually far more, per minute, than that of producing a major Hollywood motion picture. Talking frogs, computer graphics, and intense editing now seem to be a requirement.

A side effect of the focus on entertainment is that it gives the marketer far less time to actually market. In a fifteen-second commercial (increasingly attractive as a cost-cutting way to interrupt people even more often), ten or even twelve seconds are devoted to getting your attention, while just a few heartbeats are reserved for the logo, the benefit, and the call to action.

Take the interruption challenge! Write down all the companies that ran commercials during your favorite TV show last night. Write down all the companies that paid good money to buy banners on the Web during your last surfing expedition. If you can list more than 10 percent of them, you're certainly the exception.

3. The third approach used to keep mass marketing alive is to change ad campaigns more often in order to keep them "interesting and fresh." Tony the Tiger and Charlie the Tuna and the Marlboro man are each worth billions of dollars in brand equity to the companies that built them. The marketers behind them have invested a fortune over the last forty years making them trusted spokesmen (or spokesanimals) for their brands.

Nike, on the other hand, just ran a series of ads without the swoosh, arguably one of the most effective logos of the last generation. Apple Computer changes its tag line annually. Wendy's and McDonald's and Burger King jump from one approach to the other, all hoping for a holy grail that captures attention.

In exchange for these brief bits of attention (remember the hoopla when they replaced Mikey on the Life box?) these marketers are trading in the benefits of a long-term brand recognition campaign. It's a trade they're willing to make, because Interruption Marketing requires it. Without attention, there is no ad.

4. The fourth and last approach, which is as profound as the other three, is that many marketers are abandoning advertising and replacing it with direct mail and promotions. Marketers now allocate about 52 percent of their annual ad budgets for direct mail and promotions, a significant increase over past years. Of the more than $200 billion spent on consumer advertising last year in the United States, more than $100 billion was spent on direct mail campaigns, in-store promotions, coupons, freestanding inserts, and other nontraditional media. Last year alone Wunderman, Cato, Johnson did more than $1.6 billion in billings for its clients (folks like AT&T).

The next time you get a glossy mailing for a Lexus or enter an instant win sweepstakes at the liquor store, you're seeing the results of this trend toward increased direct marketing efforts. Advertisers are using them because they work. They are somewhat more effective at interrupting you than an ad. They're somewhat more measurable than a billboard. Best of all, they give the marketers another tool to use in their increasingly frustrating fight against clutter. After all, there are only five or ten pieces of junk mail in your mailbox every day -- not 3,000. And another few feet of shelf space at the supermarket can lead to a dramatic upturn in sales.

DIRECT MARKETING BREAKS THROUGH THE CLUTTER, TEMPORARILY

Even though they work better than advertising, these techniques are astonishingly wasteful. A 2 percent response for a direct mail campaign will earn the smart marketer a raise at most companies. But a 2 percent response means that the same campaign was trashed, ignored, or rejected by an amazing 98 percent of the target audience! From the perspective of the marketer, however, if the campaign earns more than it costs, it's worth doing again.

Of course, just as suburbanites learned when they fled the city to avoid the crowds, if a strategy works, other people will be right on your heels. That bucolic countryside fills up rapidly with other people looking to get away from it all. Correspondingly, as each of these promotional media becomes measurably effective, every smart marketer rushes to join in. Finding a unique approach that cuts through the clutter is usually very short-lived.

Virtually every supermarket now charges a shelving allowance, for example, which manufacturers pay for if they want more shelf space for their products. Every liquor store is already jammed with promotions. Every mailbox in the country is brimming with catalogs for clothes, gardening equipment, and fountain pens.

Direct marketers are responding to this glut by using computers. With access to vast amounts of computerized customer information, marketers can collate and cross-reference a database of names to create a finely tuned mailing list and then send them highly targeted messages. For example, a direct marketer might discover that based on past results, the best prospects for its next campaign are single women who are registered Democrats, who make more than $58,000 a year, and who have no balance on their credit card. This information is easily available, and marketers are now racing to make their direct marketing ever more targeted.

Of course, database marketing is a weapon available to any marketer, so like all trends in Interruption Marketing, this one will soon lose its edge. When others jump in as well, the clutter will inevitably catch up.

The last frontier of Interruption Marketing appears to be exemplified by the movie Titanic. James Cameron showed the world that outspending any rational marketer will indeed cut through the clutter. Hollywood has jumped on this bandwagon with marketing campaigns for Godzilla and other films that at first glance can't possibly bring in enough ticket sales to justify the expense.

Nike uses the same approach to sell sneakers, and now this radical overspending strategy is being used by others, especially on the Internet. The thinking behind it is based on an all-or-nothing roll of the dice. Basically, because clutter is so pervasive, anyone who can successfully break through and create a new mass market product will reap huge rewards. And betting vast amounts of other people's money on that breakthrough is one way to play.

Of course, once there's a proven pattern that big spending can win, others in the category will jump in as well. The bar will be raised yet again, and the only winners will be the media companies that sell the airtime and ad space in the first place.

WHY AD AGENCIES DON'T WORK TO SOLVE THE PROBLEM

What about the ad agencies? With so many talented people, why aren't they working to solve this problem?

Unfortunately the clutter wars are taking their casualties at the agency side as well. The big agencies, the ones that could afford to take the lead in this challenge, are faced with three dismal problems:

1. First, clients are giving the agencies a much shorter leash. Leo Burnett used to keep clients for twenty or thirty years. Levi's stayed at FCB for sixty-eight years. That's so long that not one person at either company was probably born when the account work was started on Levi's.

Today, however, it's not unusual for a marketer to change agencies after two or three years. Companies that fired their ad agencies in the last year include Bank of America, Compaq, Goodyear, and many more.

2. The second problem is that the stock market has been conducive to agency consolidations. The best way to make money in advertising today is to buy ad agencies and take them public. As a result, some of the best minds in the business have been focusing on building agencies, not brands.

3. Last, the commission structure that every ad agency was built upon has been dramatically dismantled. Traditionally agencies were paid by media companies. They got to keep 15 percent of all the ad money the client spent on ad space in the form of a commission from the magazines and TV networks where they ran their ads. This meant that big clients could generate huge profits for the ad agencies, which funded work on new approaches to advertising as well as the innovative ads for new, smaller clients. But now the big guys have decided to put a stop to this subsidizing, and it's rare to find an ad agency that still gets a straight 15 percent commission on media buys for their big clients.

INTERRUPTION MARKETERS FACE A CATCH-22

To summarize the problem that faces the Interruption Marketer:

1. Human beings have a finite amount of attention.

You can't watch everything, remember everything, or do everything. As the amount of noise in your life increases, the percentage of messages that get through inevitably decreases.

2. Human beings have a finite amount of money.

You also can't buy everything. You have to choose. But because your attention is limited, you'll be able to choose only from those things you notice.

3. The more products offered, the less money there is to go around.

It's a zero sum game. Every time you buy a Coke, you don't buy a Pepsi. As the number of companies offering products increases, and as the number of products each company offers multiplies, it's inevitable that there will be more losers than winners.

4. In order to capture more attention and more money, Interruption Marketers must increase spending.

Spending less money than your competitors on advertising in a cluttered environment inevitably leads to decreased sales.

5. But this increase in marketing exposure costs big money.

Interruption Marketers have no choice but to spend a bigger and bigger portion of their company's budgets on breaking through the clutter.

6. But, as you've seen, spending more and more money in order to get bigger returns leads to ever more clutter.

7. Catch-22: The more they spend, the less it works. The less it works, the more they spend.

Is mass marketing due for a cataclysmic shakeout? Absolutely. A new form of marketing is changing the landscape, and it will affect Interruption Marketing as significantly as the automobile affected the makers of buggy whips.

Copyright © 1999 by Seth Godin