• by Christopher M. Schroeder , July 30, 2004

I have argued in these pages that all media are moving to a progressively more direct and directed marketing world. I have suggested that the pay-for-performance ad models have put pressure on all models to sharpen their ability to target and deliver clear results. I have further argued that we should show no fear here; we're not just measurable, we're able to deliver unlike any medium in history.

Online advertising has proven to drive new customers and create brand awareness. Imagine if there were an ad capability, married with marketer's existing customer information, whose goal to reach existing customers with personalized offerings targeted to them.

Well, such a service exists, and it is created by CEO John Federman and his team at Dotomi. He is as smart and energetic a thinker on these issues, and has some provocative things to say about new advertising opportunities, the importance of protecting privacy, and how Dotomi may change the way marketers view advertising.

CS: You have a remarkable capability. Describe it in three sentences or less. JF: Dotomi cuts through the clutter by delivering personal, relevant and timely messages to marketers' opt-in customers within the ad banner space as they surf the Web. In a cost effective way, marketers can communicate with consumers that have raised their hand and asked their favorite marketers to keep them informed. This offers opportunities for retention, up-selling and cross-selling, and loyalty marketing.

CS: Why do you think the market needs this now? JF: Consumers are getting 'savvier' and want to rule over the types of marketer messages that they receive. As a result, there is an industry shift from mass marketing to micro marketing, which is based on individual, self-expressed interests. Privacy concerns and an inundation of media noise have made a user's online experience feel unsafe and overcrowded. As marketers are challenged with retaining their online communities in a way that is respectful to their customers, permission-based marketing within the ad banner will increasingly respond and create a way for marketers to have an ongoing dialogue with their customers.

CS: Can you share a case study?

JF: iBooks, Israel's largest brick-and-mortar book company, needed to increase sales by ensuring its best customers were informed of important store information. Their strategy of working with Dotomi was to introduce products and promotions utilizing printable coupons to drive consumers to both their Web site and retail stores. As a result, they experienced a 14 percent click-through rate on informational banners announcing new books relevant to their customers' interests, and a 23 percent click-through rate on promotional coupons. Dotomi sent out a customer satisfaction survey (with no incentive offered) with a 9 percent response rate. Out of that response, 43 percent wished to receive additional iBooks' direct messages and 47 percent were pleased with the number of personal messages received.

CS: What about the "creepy" factor -- will folks feel like big brother is watching them?

JF: Education is key to avoiding the creepy factor. On the consumer front, Dotomi Direct Messaging is permission-based, 100 percent privacy compliant and a consumer can opt-out at any time. Consumers will never receive a marketer message that they did not raise their hand for. In addition, we have applied lessons learned from our March 2003 pilot launch in Israel with 70 customers, such as American Express, Blockbuster, Budget, AIG, and Burger King. We provide a best-practice guideline of how to effectively get started with direct messages to proactively educate customers on the types of relevant messages that they will start seeing on the Web. We suggest an awareness approach that includes: Web site/newsletter registrations, an e-mail campaign about the added benefit to customers, and ad banners that introduce the communication. For instance, an ad banner campaign could start out with a message, "Let's be direct. A great new way to stay in touch," with a link to learn more. A follow-up campaign might say, "Get Away From New York," with a message that says, "How Did You Know that I am from New York?" The follow-on ad banner communication will become more mainstream and familiar to the consumer and will include a preview banner to let the consumer know that they have a direct message to be followed by a marketer communication based on the consumer's interests, "Rachel, catch the Bears game in Chicago next weekend for $299."

CS: How do you think "cookies" will play out -- in this election year, it looks like the legislators are going hard after spyware. Do you think they know the difference between "good" and "bad" cookies?

JF: Our sense is that within the next few years the vast majority of online consumers will be well informed enough to know the difference between good and bad cookies. As a consumer, you start to recognize the benefits of a good cookie. For instance, Amazon provides targeted consumer recommendations based on past buying behavior. I know that I have bought books from these helpful suggestions, and I did not feel that my privacy was invaded. And, I have also had the experience of intrusive online advertising that was not permission-based. It's all about disclosure - and Dotomi Direct Messaging was built from the ground up to be a deliberate, value-add for consumers. Our tag line, "Consumers Rule!" embodies our belief in the increasing role that a well informed consumer plays in defining their own Web experience. CMS: How hard is this to copy by some competitor?

Difficult. And, it has to do with our cookies, which are anonymous cookies that provide a user ID to the consumer (so Dotomi does not have the consumer's personal information), and a presence cookie that lets the publisher know that they need to redirect the ad banner to the Dotomi ad server. We build a fortress around the consumer and are, in effect, the "piping" or conduit between the consumer and the marketer. Our co-founder and CTO, Yair Goldfinger was responsible for the creation of instant messaging. He fundamentally changed the way that we communicate with each other online in a way that is permission-based. That vision extends today in the ad banner space as a new communication channel that improves marketer communication.

CS: What keeps you up late most at night?

It's not potential competitors, moving legislation or any number of the things you might think. What keeps me up at night is the energy around the fact that the Web is starting to deliver upon its initial promise - of being a true one-to-one channel. While the concept is as old as the Web, the reality has lagged. Consumers needed to evolve in their use of the Internet and in their ability to appreciate their role in creating a better, more useful, more relevant experience. We're witnessing that transformation and it's a powerfully exciting time for all of us - publishers, marketers and, most especially, consumers.

CS: From your lips to God's ears! Of course, I couldn't agree more. Many thanks, John, and best of luck!