Permission Is the Right Thing: A Conversation with AAAA's Mike Donahue

Mike Donahue has been a leading voice in the advertising community for over 30 years. Having built his career as one of the stars at Saatchi and Saatchi, he joined the American Association of Advertising Agencies (AAAA) in 1994. Now, as executive vice president for member services, Mike is responsible for all the organization's electronic initiatives. We had a quick tour of the new world, from life in the most accountable medium to whither the new spyware legislation - and clearly he believes that permission is not only right, but also the most effective.

CMS: Among the clear trends in the world of interactive is that the individual is the aggregator -- whether online, with a TiVo device, or iTunes; folks want what they want when and how they want it. How are your members reacting to this? MD: Any kind of self-selected information or entertainment eventually lends itself to advertising, whether it's on-demand TV or iTunes on an iPod, with one big caveat: The consumer has to be able to opt in to receive any advertising. Many people in the industry believe that given the costs associated with getting this content without advertising compared to reduced costs when advertising is allowed, eventually there will be opt-in advertising in on-demand content environments. No one can say for sure when this will happen. CMS: With some form of interactivity, it seems we're all in direct marketing now (at least results are significantly more measurable than ever). What do you think are the ramifications for branding? MD: I don't think there will ever be an exclusive direct marketing model or an exclusive branding model. Sure, there are plenty of direct marketing opportunities in the interactive space. For example, this past Christmas was the biggest online shopping season ever. But there are many advertisers that have created interesting and successful branded content for the Web that doesn't involve direct marketing or a transaction. and more recently Subservient Chicken are just two excellent examples. Neither required a transaction in the classic meaning of direct marketing, yet these two ideas rank among the most successful programs created by advertisers using the Web without a single bit of direct marketing. CMS: To your point, more marketers seem to be taking control of their own branding experiences on their Web sites, on microsites, even their stores are brands now. Are there any ramifications to this? MD: I think the ramifications are much better targeting by advertisers, more targeted advertising from agencies, and ultimately higher return on investment for advertising dollars. I'm not saying the future is exclusively about target marketing, but I think the best opportunities for marketers will be in this arena. Keep in mind that the 20/80 rule: namely that 20 percent of consumers account for 80 percent of volume is not nearly as important as the 6/60 rule, that is, 6 percent of consumers of any brand franchise accounts for 60 percent of profitable volume. This is what advertisers want, to create great brand experiences to reach these profitable consumers. CMS: Getting the right messages in front of the right people is always the silver chalice of good marketing. The Internet allows unprecedented targeting, which is good news. What do you make of all the noise coming from Washington in the spyware concerns? MD: From my previous answers, it's clear that I'm a firm believer that targeting is critical. In terms of spyware, I think anything that allows a consumer to opt in for a message and preferably double opt in will yield the optimal experience for consumers. This isn't something that can be achieved with spyware, which is indiscriminate, untargeted, and not requested. It won't succeed in legitimate marketing. The most successful online marketers have long realized that the open rate on e-mails and the eventual close rate on sales is in order of magnitude greater when consumers opt in for the message. CMS: Are your members engaged in this debate? Do they care and why? MD: I think our members care about finding the most appropriate targeted advertising for the most appropriate targeted consumers. As long as the consumer has expressed interest in the message, the message has a good chance of successfully reaching the right consumer. CMS: Are they mobilizing or preparing to educate Washington?



MD: I sound like a broken record, but successful Internet marketing requires a willing and engaged consumer, and the enormous advances in data accumulation, data mining, and targeted message delivery from these data yields the best consumer experience and the best return on investment for the marketer.

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