Opinion: Consumers can call the shots in ad relationships

A few weeks ago US venture capitalist Bill Gross - backed by home-shopping tycoon Barry Diller - got himself a lot of publicity by offering free PCs with free internet access in return for the right to display advertising on the screen.

A few weeks ago US venture capitalist Bill Gross - backed by

home-shopping tycoon Barry Diller - got himself a lot of publicity by

offering free PCs with free internet access in return for the right to

display advertising on the screen.

To get the PC, people have to fill out a questionnaire about their

income, tastes and education. On the face of it this looks like a great

marketing gimmick. But look a little deeper, and it could be one of

those seminal moments in company/consumer relationships. Why?

Because this becomes what could be called permission marketing:

companies have to get an agreement from individuals to look at the


What this shows is just how dynamics of the marketplace are


Consumers can easily operate in an ad-free zone. It’s not just about

zapping past the television ads: they are increasingly voting with their

feet across the board.

Over 450,000 of them in the UK have joined the Mailing Preference

Service to stop unwanted direct mail. About 350,000 of them have signed

on to the parallel telephone scheme.

But it gets worse for marketers. Not only can individuals choose what

they want to be told about, but they realise that when they do allow

themselves to be marketed to, any information they give in return about

themselves has realisable value. Yet what do most companies currently

offer customers in exchange for information?

An avalanche of unwanted mail. Some discounts on their shopping - spend

pounds 100 and save pounds 1 - a magazine that looks like every other, a

small - read cheap - gift.

That’s why the free PC is so clever. Even if this venture doesn’t take

off - although more than a million people have applied for one - no

marketer can ignore it.

It’s what one-to-one guru Don Peppers calls an explicit bargain: people

know what they are getting into in being exposed to advertising and give

their permission.

Even more compelling is the way the company uses the thorny issue of

privacy as a prominent part of the deal. It promises that no one,

including the advertisers, will be able to identify any individual,

although they will know, for example, if someone is looking for a new


This turns the one-sided deals most companies offer into a true

relationship, with loyalty given and accepted on both sides. It

acknowledges that information is critical and valuable, and that it will

be treated with care.

This is attractive: a recent survey conducted in the US shows that

Americans are becoming far more concerned about the use of their private

information, with eight in ten respondents believing that they have lost

control over how companies collect and use their personal data.

US consumers want to know about products they are interested in. What

they don’t want is to be hit by an avalanche of ’rewards’ that bear

little relevance to them.

Consumer goods companies were always seen as the universities of


Nowadays they could learn a lot from those in business-to-business


In business, it’s no longer a question of ’I want to buy and you sell to

me after we have haggled about the price’. Instead, it’s about acting as

partners for mutual benefit.

This will be a very hard lesson for all those marketers

who want to pay lip-service to issues of customer satisfaction and

loyalty without honouring their side of the deal. But it’s one that they

are going to have to learn.


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