• by Matt Blumberg , September 13, 2004

Americans have long operated under an unwritten deal with media companies (for our purposes here, let's call this the Old Media Deal). The Old Media Deal is simple: we hate advertising, but we are willing to put up with an amazing amount of it in exchange for free or cheap content, and occasionally one of those ads slips through to the recesses of our brain, and influences us in some way that old school marketers who trade in non-addressable media can only dream of.

Think about it: 30 minutes of "Friends" has 8 minutes of commercials (10 in syndication!) The New York Times devotes almost 75% of its total column inches to ads. We get 6 songs in a row on the radio, then 5 minutes of commercials. The copy of Vogue's fall fashion issue on my mom's coffee table is about 90% full-page ads.

The bottom line is: advertising doesn't bug us if it's not too intrusive, and if there's something in it for us as consumers.

Since I started working in "New Media" in 1994, I've thought we had a significantly different New Media Deal in the works. The New Media deal is that we as American consumers are willing to share a certain amount of personal information in exchange for even better content, more personalized services, or even more targeted marketing--again, as long as those things aren't too intrusive and provide adequate value.

Think about how the New Media Deal works: We tell Yahoo that we like the Yankees and that we own MSFT stock in order to get a personalized home page. We tell Drugstore.com what personal health products we buy so we can buy our Q-tips and Benadryl more quickly. We tell The New York Times on the Web our annual income in order to get the entire newspaper online for free. We let PayTrust know how much money we spend each month so that we can pay our bills more efficiently. We let Google scan our e-mails to put ads in them based on the content to get a free e-mail account. We give their e-mail address out to receive marketing offers (even in this day and age of spam) by the millions every day.

After a few years of talking somewhat circuitously about this New Media Deal, recent research backs up my theory, so I thought it was time to share. In a study conducted by ChoiceStream in May 2004, 81 percent of Internet users expressed a desire for personalized content; 64 percent said they'd provide insight into their preferences in exchange for personalized product and content recommendations; 56 percent would provide demographic data for the same; and 40 percent said they'd even agree to more comprehensive clickstream and transaction monitoring for the same. All of these responses were stronger among younger users, but healthy among all users. Sounds like a New Media Deal to me.

The recent Ponemon Institute data (See "Survey: Consumers Want More Personalized Online Ads, But Don't Want Identities Known" -- MediaDailyNews Sept. 10) also points to this New Media Deal trend--66 percent said they actually WANT ads to be more targeted to them. Sure, 55 percent didn't want to share any personally identifiable information--nothing that was going to result in a knock on the door or a phone call during dinner, for example--but I argue that their sense of what is "personal information" gets looser by the day. An advertiser doesn't need a phone number these days to target effectively. What medicine you take can be much more useful information.

There's still a time and a place for anonymity. It's one of the great things about RSS for certain applications. And privacy advocates are always right to be vigilant about potential and actual abuses of data collection. But I think it's becoming increasingly clear that we have a New Media Deal, which is that people are willing to sacrifice their anonymity in a heartbeat if the value exchange or trust is there.

Matt Blumberg is the chairman, CEO, and founder of Return Path, Inc., New York.