Does brand loyalty come from family word of mouth?

During nearly 20 years of marriage I think on two or three occasions my wife and I have discussed the laundry detergent that she uses. As a pragmatist, I have often come across less expensive generic detergents, which she refuses to use. I can’t even get her to try anything else, even once! She is a die-hard Tide detergent user and she would never ever consider changing brands. Upon closer investigation I discovered that she inherited that brand loyalty from her mother. I don’t exactly know how, but there is no denying that her mother’s recommendation is stronger than any suggestion that I can ever make. I need to find out if my wife’s 7 sisters also have the same brand loyalties. That would be an interesting question.

My company, FamilyLink.com hopes to become the leading developer of social networking applications for families and for genealogists. My background is in subscription marketing. I co-founded Ancestry.com in 1996 and it approached 1 million subscribers in the next 10 years to its massive genealogy database library. And now WorldVitalRecords.com has passed 25,000 subscribers and our rate of growth is increasing.

But as everyone knows, most social networking sites are free (Ryze.com was an exception, and it claimed to be the first profitable social network, back in like 2003) and rely on advertising revenue to grow. In order to generate advertising revenue from our family apps and widgets, and from our own social network (which have attracted more than 2.3 million users in the past 4 months), it will be useful to understand what brands and products are used based on family recommendations.

So yesterday, we asked some of our customers what brands they are loyal to because of their mother. Here are the top 28 responses:

1. Tide
2. Ivory
3. Clorox
4. Campbell’s
5. Crisco
6. Dove
7. Crest
8. Kraft
9. Comet
10. Quaker
11. Hellman’s
12. Dial
13. Palmolive
14. Colgate
15. Arm and Hammer
16. Heinz
17. Gold Medal (flour)
18. Dawn (dish soap)
19. Oil of Olay
20. Folgers
21. All (laundry detergent)
22. Wisk
23. Kleenex
24. Windex
25. Jello
26. Clabber Girl
27. Cascade
28. Ajax

Tide actually had more than twice as many responses as the next highest, Ivory. So the brand marketers there must have been doing something terribly right all these years.

I heard a projection at CES that 1.2 billion people will be using social networks by 2012. And since so many people try or buy products and services based on word of mouth recommendations, and since we hope to have tens of millions of families using our applications, we will invest a lot of time and energy into understanding how viral marketing (or what we called “genetic marketing” back at MyFamily.com) works within families–both within nuclear families as well as extended families.

I need to make it clear that our survey was not scientific. We got about 1,000 responses in a day. But with our reach growing larger every month, we will use surveys and quizzes to become experts on family word of mouth.

If any of the brand managers of the brands listed above (or any other major brands) want us to do some research for them and discover the genetic marketing quotient for their product, we’d be happy to work something out. We have a Facebook audience of ~2.3 million users and a genealogy audience of more than 500,000 monthly visitors.

Social Networking Strategy for Utah Companies

I recently organized a Facebook group called Utah CEOs with a Facebook Strategy. Now I wish I had named it better. It should be something like Utah Executives who Have or Want to Have a Social Networking Strategy. The first event had more than 30 attendees. One of them blogged a summary of the Facebook Strategy lunch that we held this week, and said it was very worthwhile.

If you want to join this group which already has 125 members so you can be notified when we schedule our next event, click here.

As we (at FamilyLink.com) increase our expertise in building applications and making them both viral and scalable (which has taken us months of effort and investment) we are planning to select some key strategic partners–companies who have content or services in the family space–and develop some co-branded applications with them. These applications can generate revenue and click-throughs for both our partners and our own web sites.

We will sign our first co-development deal next week and announce the application shortly thereafter. We believe this new application is unique and will spread to millions of Facebook users, and that is related to our business of connecting families. Our We’re Related application has had more than 2 million installs, and our next two applications are growing very, very quickly. Both should reach into the hundreds of thousands of installs within a month.

If you are interested in talking about partnering with us, please use the Contact Me form on my blog, and I’ll get back with you shortly.

Facebook Strategy Lunch for Utah Executives

I organized a Facebook Group for Utah CEOs who have a Facebook strategy or want to develop one. I wish I could change the name of the Facebook Group, but Facebook doesn’t allow that. I can see why. What if someone set up a group called “Mothers Against Drunk Driving” and got a million members, and then arbitrarily decided to change the name of the group to “We Love Beer.” The creator of a group can control a lot of things, but can’t change the name after people have joined it.

If I could change the group name I would broaden it to include any Utah Executive (not just CEOs) and also to broaden it to include Facebook, OpenSocial, and other major web sites such as Yahoo that are opening up their platforms to third-party developers.

At CES I heard a forecast that 1.2 billion people will be using social networks by 2012. On Wikipedia’s excellent list of social networks I count 26 that have nearly 10 million users already.

There are opportunities everywhere you look to build social networking applications or widgets that can spread throughout the web. And there are companies that can help you get started:

  • Widgetbox, a VC-funded company (Hummer Winblad), helps companies build and distribute widgets. They claim that 10% of the Facebook applications started as widgets that have migrated to Facebook. They announced last week a Bebo accelerator that can help a widget turn into a Bebo application. (Bebo is a massive social network that opened up last week to third party applications, just like Facebook.)
  • KickApps has raised $18 million to date. It provides widgets and social networking components for a fee. I spoke with a KickApps executive at CES. He said they charge for their applications and widgets based on page views/usage. So if you need a video player with social networking functionality built it for your web site, you don’t have to build it from scratch. It also appears that they can provide you with your own white label social network like Ning.
  • Ning allows anyone to quickly build their own social network on its platform. Founded by Marc Andreesen, Ning reached 100,000 social networks hosted back in September.
  • FBFactory.com claims to be the first company that exclusively builds Facebook apps for customers. They have a growing list of applications they have built.

    So, if you are a Utah Executive and you would like to learn more about how to develop a strategy that can help you reach the 1.2 billion people who are going to be using social networks in the next 4 years, and how to do it inexpensively and virally, sign up for this Facebook group, and plan on attending our lunch meeting next week in Provo.

Catching the Geni that’s out of the bottle: introducing FamilyLink

On January 16th, an amazing, innovative, well-financed company (especially now, after raising $10 million!) launched a brilliant, web 2.0 based online family tree building tool called Geni..

After getting TechCrunched more than once, Geni caught the fancy of many bloggers and started spreading through word of mouth, but more powerfully, its innately viral application started attracting thousands of users very quickly. (Geni’s Alexa chart doesn’t look great, but Geni’s Quantcast chart looks better. No “addicts”, however, which comprise 38% of Ancestry’s traffic.)

I was both thrilled and disappointed. You see, I want interest in family history to spread all over the world. The family is fundamentally the most important unit in society, and modern societies with the ever weakening family are bring hosts of problems that will never be solved by government, which relies on force to tax people and create policy. The Old Testament ends with two haunting verses: “Behold, I will send you Elijah the prophet before the coming of the great and dreadful day of the LORD; and he shall turn the heart of the fathers to the children and the heart of the children to the fathers, lest I come and smite the earth with a curse.” (Malachi 4:5-6).

Getting families to pay more attention to each other is important not only to those who believe in the Old Testament. Phillip Longman, author of “The Empty Cradle” which decries the falling birthrates in industrialized countries from an economic standpoint ends his book with these powerful words: ” If free societies have a future, it will be because they figure out or stumble upon a way to restore the value of children to their parents, and of parents to each other.”

Even the Soviet Union, when its birth rates kept declining, spoke out. Andrei Kirilenko, the ideology chief, said at a Kremlin rally in 1979, “Our common responsibility for the country’s future requires us to strengthen the family, to elevate the prestige of motherhood and to increase the demands made on the parents as to how their children are growing up.” Note how the language implies the power of government (which is always coercive) to get parents to do better. (Cited by Longman)

So I was thrilled by the launch of Geni, the best free online family tree building tool since MyFamily.com/Ancestry.com launched its free online family tree building tool back in 1999, and excited by the new attention that was being given to the family history category by the blogosphere. The first time ever really, since Ancestry.com/MyFamily.com are rather mature web sites and The Generations Network, which owns both of them, is more in its “monetization phase” than in a “build the market” phase. The blogosphere has never gotten all that excited about what Ancestry.com does and since MyFamily.com hasn’t been free since 2001, it has experienced “negative population growth.”

(Speaking of negative population growth, no less a thinker than Peter Drucker said that negative population growth is the single biggest issue facing civilization today. So on my recent trip to Europe it was very interesting to read “The Empty Cradle” completely and to consider the factors there that are leading to fewer children. Italy used to have a million births a year–now it’s 500,000.)

Not that Geni or MyFamily.com or any site that connects families is going to increase the worldwide birth rate. We’ll leave that job to matchmaking sites like eHarmony.com.

The CEO of eHarmony.com spoke at Stanford on Valentine’s Day, and casually pointed out that on any given day, 200 marriages occur where the people met on eHarmony, and that by the end of this year, there will have been 100,000 babies born to couples married because of eHarmony. No wonder he says doing any other job seems trivial compared to this most-satisfying company. Maybe the solution to worldwide negative population growth is to make sure eHarmony rolls out worldwide as quickly and inexpensively as possible!

Okay, so back to Geni. I was disappointed by Geni’s appearance because I had decided late last year to stop running my Provo Labs incubator, and start focusing on just one company, and turn that company into a raging success. I had chosen to focus on World Vital Records, along with the very talented team that is already there, for many reasons, one being that we felt we could be the first genealogy company to launch a social network for family history, and social networks are generally the fastest growth web sites today.

We were planning to do something entirely different than what family history web sites have done before, and we still are. But Geni’s launch has caused us to change our time table for many of our product features.

To be honest, my disappointment has entirely faded. It’s been swallowed up by an overwhelming feeling of excitement about family history sweeping the world, about families actually using technology to connect, rather than to disintegrate. The Geni launch, as well as all the great moves that Ancestry.com is doing (like launching international sites, kicking off its first-ever integrated advertising campaign — worth $10 million — to boost interest in the brand) and the newly formed alliance between werelate.org (see what Dick Eastman said about werelate.org last June) and the Allen County Public Library, the second largest family history library in the country — all of these things add to the level of excitement.

Anyway, the big question is can another family history social network take off? Can anyone catch Geni?

I’m not going to answer that question, because I simply can’t predict it. And it really doesn’t matter. Geni provides a great service to people who want to build their first family tree and to invite family members to collaborate on it. Geni is obviously great at listening to customers (Geni blog, Geni forum) and at responding to their requests quickly.

And of course Ancestry would certainly dispute the need to “catch Geni” in the first place. Ancestry is loudly defending its leadership position in this space. They have made it clear through recent press announcements that the Ancestry family tree software is attracting millions of records, photos, and more. And with revenues of $150 million per year, they have a very good chance to defend their leadership position.

So where does World Vital Records stand? How we can think that we have a chance to compete in this venture-capital driven world of online genealogy?

The key for us is to attract millions of users to our new free social network for family history which we call FamilyLink. We are some days away from our beta launch, and we can hardly wait. Our site will offer unique and valuable help to every serious family history researcher, and it will nicely coexist with all of the TGN web sites as well as Geni.com.

Our team is cautiously optimistic about our initial launch, and wildly enthusiastic about the long-term potential that we have to provide value to family historians worldwide. And we believe that by adding new databases every day to our World Vital Records web site, that our revenue will be able to keep up with our expenses. It won’t be cheap to run FamilyLink. But World Vital Records continues to generate record revenue each month and we are getting ever closer to being a sustainable business.

Thanks to the GEDCOM standard for data exchange, anyone who downloads a family tree from familysearch.org or Ancestry.com or Geni will be able to import their family data into virtually any genealogy software program or upload it to sites that accept gedcom uploads. And based on Geni’s March 15th blog post, any gedcom upload site that gets 100 uploads of family trees with at least 1,000 names in them, will end up with bigger trees than Geni has right now.

Of course, the magic in Geni is not in the size of its trees, but in its virality. Reid Hoffman of LinkedIn says he keeps a list of 12 people in the world who truly understand viral marketing (and he is one of the 12.) I wonder if anyone at Geni is on that list. Probably so, given the common PayPal connections. I doubt that anyone from TGN is on his list. But I hope that FamilyLink might convince him to add one more name to this list…and soon.

You can visit FamilyLink today and sign up for the beta. We’ll let you know when it is available. It won’t be long.

The long term cumulative impact of guerilla marketing

In December a panel of internet entrepreneurs shared their stories and their keys to success with my BYU marketing and Provo Labs Academy students.

One young woman told how she had teamed up a few years ago with her brother to start an ecommerce site, selling a very unusual niche product. They did almost $1 million in revenue last year.

One student asked her how long it took for her sales to take off initially. Her answer surprised me: she worked for an entire week before she had her first sale.

How many people would work a full week, generate one sale (probably under $30) and still be willing to stick with it? Yes she worked for a full year before generating enough sales were to pay her a living wage.

Now, after many years of hard work, she and her brother are doing very well.

Her story reminds me how important it is to be patient and persistent with your online business. Online businesses almost always start with a small trickle of visitors, a few sales, and then over time turn into a stream of traffic and a river of repeat customers — but only if the founding team keeps at it.

Even eBay started this way. When the auction site was first launched, a small number of checks started coming in. The stream of checks turned into a torrent, all while Pierre Omidyar was working at General Magic in his cubicle. EBay was profitable from the beginning, because
there was really no overhead and the site was incredibly viral and revenue ramped quickly.

But most of the ecommerce sites listed in the Internet Retailer Top 500 (it takes more than $3 million in annual sales to make that list) probably started much more slowly than eBay. But their teams kept promoting their products, they kept at it, until revenue reached the millions.

The most important book I had when starting all of Ancestry.com and MyFamily.com’s marketing efforts was Guerilla Marketing Online Weapons: 100 Low-cost High Impact Weapons for Online Prosperity.

A lot of the tactics are now obsolete, but it is the mindset that matters the most. It’s a rare mindset but a really valuable one.

As my World Vital Records team watches our small stream of visitors grow, I want to remind them how important it is to market our company’s products at every opportunity, in every possible channel, using every possible tactic.

As our marketing team grows, I want every one of them to understand the power of guerilla marketing compounded over time.

Let’s do the math.

Suppose you hire a marketing employee at $10 per hour, and assign her to do guerilla marketing and PR using dozens of online marketing tactics. There are literally hundreds of legitimate tactics.

Let’s say that her first day she gets a link from another site that will consistently deliver 3 visitors per day from now on. This could be a link on a blog roll, or an entry in a web directory, or a link on any other site.

Not a very successful day, right. In eight hours, she cost $80, and delivered 3 visitors and no sales.

With an average conversion rate of 2% and an average sale price of $50, the marketing employee failed on day one. Result: loss of $80.

But imagine that she works every day using guerilla tactics such as posting answers to questions on Yahoo Answers, appropriately advertising on Craigslist, submitting her site to search engines and directories, commenting on blogs and participating in message boards, putting offers up on freebie sites, publishing press releases, syndicating articles, and asking bloggers to review her site or link to her. Let’s say her efforts bring an additional 3 visitors per day from links that are semi-permanent and will consistently generate 3 visitors per day from now on. (Many links have a long life span and therefore individually have a long tail.)

So after 30 days her links are now bringing in 90 visitors per day and generating 2 sales a day, or $100 in daily revenue.

Now all of a sudden the economics start looking really good. She’s generating $100 in sales with labor costs of $80. Depending on the cost of goods, she will soon be a profit center for the company, if she can continue focusing on these online marketing tactics and overcome boredom, and the lack of management understanding about what she is up to.

If she is creative enough to keep finding new ways to get permanent links from other sites that will consistently deliver 3 new visitors per day, then within a year, her efforts will be bringing about 1000 visitors per day or 20 sales per day, which would be $1000 per day, or
$30,000 per month. The second year, her results would be double.

This is how internet companies actually succeed. Ask the founders of Backcountry.com to tell you how they spent the first few years basically getting as many links from other sites as they could (even before it mattered for SEO purposes) and how over the years the cumulative impact of all these links (including from their paid affiliates) yielded tens of millions in annual revenues.

This is how it works. There are employees in every successful internet company (usually underappreciated) who are in the trenches every day, gutting it out, getting a link here and a mention here, and an affiliate here, finding webmasters or bloggers or journalists anywhere who might take an interest in their products, writing new content, finding new keywords to market around, generating some sales and some positive word of mouth, until the cumulative impact of all their efforts is generating a consistent daily stream of sales.

Since most corporate executives (unless they were there from the start) have no idea how this stuff actually happens, they don’t give much credit to the trench workers (such as when Ancestry.com laid off its only affiliate manager back in 2000 when she was merely responsible for personally recruiting 9 of the top 10 affiliates, and generating, at one point, a very significant percentage of the companies new daily sales), and they stop investing in the daily guerilla and online marketing tactics that have this cumulative impact.

When their businesses seem to plateau or peak, they panic and spend more and more dollars on paid marketing, and the guerilla stuff goes by the way side.

You can still be profitable when you are spending money to get every visitor to your web site, but not nearly as profitable as when you use a nice combination of paid marketing, guerilla and viral.

For me and my team at World Vital Records (and genealogy is extremely diverse and viral, so we have a lot of opportunities to spread the word in creative ways) the question is this: how many employees like the one I described above can we find, train, and support, before they are duplicating efforts and stepping on each other’s toes.

If our market can handle one such employee, and she can generate links every day that will bring us 3 clicks per day from now on, then in a year, we’ll have one employee generating the $1,000 per day that I described above.

But if there are enough tactics involving enough web sites from enough countries and we can have 10 employees doing this guerilla marketing stuff, then at the end of a year, this team will be generating $10,000 per day in revenue. That would be better: a $3.65 million annual revenue stream from our guerilla marketing/affiliate marketing team. But what if we could support 20 such employees, or eventually 50. The numbers start looking very good.

And it all starts with just 3 visitors a day.

PS. I just thought of a new metric for guerilla marketing. We all use unique visitors, unique visits, page views, and sales. But what about this: unique daily referring domains. I wonder if anyone has ever used that.

A guerilla marketer or a team of them could keep track (this would be an easy report in Omniture) of the number of unique domains or unique URLs that brought at least one visitor each day. If the team is doing their job and getting enough attention and links from other sites, this number would grow every day. This would indicate how horizontal their efforts.

Of course a good online or guerilla marketer will try to get prominent links on high traffic web sites that will generate hundreds or thousands of visitors per day; but my point is that you don’t have to have huge wins like this to succeed–you can do it with small wins every day over a long period of time.

Grudgingly Accepting Defeat, Utah Fan Devin Thorpe Sings BYU Fight Song on YouTube

Move over, William Hung!

Utah’s own Devin Thorpe has posted a video of his incredible rendition of the BYU Cougar Fight Song.

I think you’ll enjoy Devin’s video even more if you first relive the excitement of the final seconds of the BYU victory over Utah. Check out this YouTube video that someone show from the stands.

Better still is this television broadcast video showing the final play of the game. (It has more than 15,000 views already!)

Devin has more talent than I anticipated. And he went the extra mile by travelling to Provo to shoot the video adjacent to BYU Campus. Nice effort, Devin!

Devin and I had a public challenge going about who the winner of the recent BYU-Utah Football game would be. He promised what he would do if BYU won; and I countered with a couple commitments of my own.

Thanks to the last second touchdown pass from John Beck (#2 rated NCAA passer) to Johnny Harline (see this amazing photo of Johnny on his knees waiting for the ball to arrive–as a gift from heaven) in the best BYU-Utah game of all time, Devin gets to blog about my blog every day for a week, take me to a restaurant of my choice, and upload this video.

Please visit Devin’s post and Digg it (if you aren’t a registered user of Digg.com it takes only seconds to sign up) so that more people can enjoy the singing talents of Devin Thorpe. Make it a favorite on YouTube as well. Let’s see how many thousands of people all over the world can enjoy Devin’s public humiliation.

Go Cougars!

MyFamily.com Alexa Chart

It is interesting to look at the 5-year Alexa chart of MyFamily.com–a web site that was a high-flying pioneer in user generated content, photo sharing, free voice chat, and viral marketing; but which has been neglected in both development and marketing for nearly 5 years. Now that MyFamily.com has opened an office in Seattle and is recruiting web 2.0 developers and experienced internet marketers, you wonder if this web site will make a resurgence.

While we’re at it, here is the chart for Ancestry.com, the chart for Rootsweb.com, the chart for genealogy.com, and the chart for familysearch.org from the LDS (Mormon) Church.

It would seem that people are losing interest in genealogy. ;)

I hope not, because WorldVitalRecords.com launched its subscription web site today. Starting with several dozen databases, WorldVitalRecords.com is seeking to become a significant player in the genealogy industry over the new few years. We add at least one new database to our web site every day. The subscription fee is only $49.95 per year; but since we are just getting started, we are offering a 2-year subscription for $49.95 during the month of October.

We have a wonderful content acquisition team and advisors who are finding databases around the world that we can digitize or license. We also have on our team the two engineers that wrote the original search engine at Ancestry.com and prepared the first 3 billion records that Ancestry.com has online. We are excited to re-introduce many of the original ideas and practices of Ancestry.com and MyFamily.com to see if we can help people worldwide connect with their families.

Our current effort is small, but with the support of customers who believe in what we are trying to do, and of partners who want to provide access to their content to our customers, we hope we can make a mark.

We will be starting our search engine marketing and affiliate marketing programs in the coming weeks, and launching some incredible new databases and features — so stay tuned.

Please check out our vital records databases, tell us how you like the online mapping features that we have associated with most of our databases, and let us know what you’d like to see us do next. We have hundreds of ideas that we hope to implement in the future, but your input matters most to us. So please tell us what you want to see!

Note: I have not been associated with MyFamily.com in any official capacity since leaving the company in February 2002.

Influencing Key Influencers

While I was on vacation last week, I caught a USA Today article (I love USA Today) entitled “Using Blogs for Buzz” by Kim Hart. You can find her original article about getting bloggers to write about your product on the Washington Post web site.

When Nokia Corp. released its camera smartphone last fall, the marketing campaign cut back on news releases and flashy ads. Instead, the company sent sample products to 50 tech-savvy amateur bloggers with a passion for mobile phones.

The tactic paid off, as word spread online about the N-series phone, driving up sales and contributing to a 43 percent profit boost for Nokia last quarter.

We are thinking about a similar strategy for LDS Media. We have been considering offering full access our LDS search engine (with more than 3,300 full text books) to key influencers. There are probably hundreds of LDS bloggers who would love a free subscription. All we would ask is that whenever they quote someone, that they link back to the ldslibrary.com web site. We also want to find ways to provide subscriptions to other groups, including, for example:

    • columnists for Meridian Magazine or LDS Living
    • webmasters
    • Education Week speakers
    • Seminary teachers (there are 40,000)
    • faculty at religious educational institutions

We need thousands of influencers who are using and citing and talking about the new LDS Library web site, so that everyone in the LDS community hears about our search engine.

Question is: how do we reach them and get them full access to our web site. It might be best to start with the bloggers and give the bloggers full access if they are willing to blog about the full access offer for these other customer segments.

Another Provo Labs company is marketing a great new product to help kids do their chores without whining: it’s called Children’s Miracle Music. Last week we had record sales. But we are just doing pay-per-click and email marketing. (We will soon be using SEO, online video (through 10Speed’s online video affiliate network), and traditional affiliate marketing as well.) We haven’t yet implemented a blog-based marketing strategy.

We are seriously considering finding every major mom blog on the internet and sending each blogging mom a free copy of Children’s Miracle Music, with no strings attached, just because we know so many moms love this product and the blogging moms are going to reach a lot more people with their enthusiasm than the non-blogging moms.

What do you think?

What is the best way to use the blogosphere to start a viral campaign? What other case studies exist besides the Nokia example?
Nokia hired Comunicano Inc. to develop their blogging program. What other firms are doing this?

What would you do if you wanted to kick of a viral blogging program for your company? Would you hire a PR firm with a blogging expert, or would you do it in-house?

If you’ve tried giving away your product or service to bloggers and saw an impact from it, please share with the rest of us! (I’m adding the Nokia example to the Strategy Tree wiki’s blogging page.)

YouTube hailed as advertising medium of the future – vnunet.com

YouTube hailed as advertising medium of the future – vnunet.com

My next Connect magazine article will focus on the power of online video in marketing and advertising. (I’ve been working on it today.) So I was glad to discover this article quoting Leo Burnett’s Chief Creative Officer saying YouTube is the ideal advertising platform of the future.

Seth Godin Live

Last Thursday in New York I heard Seth Godin
in person for the first time. I’ve been learning from him for many
years, ever since I read “Permission Marketing,” which is still my
favorite Seth Godin book — a must read for anyone doing business in
the age of web sites and email.

I like a lot of things about Seth. For one, he is a family man. A
friend of mine tried to get him to speak at a Utah convention, but he
rarely travels west of the Mississippi — it takes him away from his
family for too long. I really enjoyed his presentation.

He told a story about playing with a bathtub toy to entertain his kids.
It was one of those suction toys you stick on the sides of the bathtub.
But he decided to stick it to his bald head and wiggle his head around
to entertain his kids. They loved it, but when he took it off his wife
noticed a big red circle on his head, and he realized that the suction
from the toy burst all the blood vessels in his head. He said the mark
took months before it went away.

Then he warned the advertising industry that they will all leave a
permanent ugly red mark on their careers if they don’t stop spamming
and interrupting potential customers — they need to enter the era of
permission marketing and grassroots spreading of ideas.

So his talk was basically about how to spread ideas in this century. In
the past, buying TV was the key to success for many brands. For
example, Charles Revlon bought TV ads starting in 1946 — the first
cosmetics company to do so — and it led to distribution and to
billions in revenue.

But he says the TV-Industrial complex is ending. The era of
interruption advertising is coming to a close. Seth wants the
advertising industry to change before it dies.

Today, 83% of people with a Tivo skip *every* commercial. Anyone who wants to ignore you (an advertiser or marketer) can.

He says advertisers are spammers, poking people over and over and over
again, trying to get our attention in a world increasingly full of
clutter.

He said every major brand that has launched in the past five years has not relied on television
to build their brand. Instead, they have done something remarkable,
something to get customers to make remarks about them, something
noteworthy and different and better.

He mentioned JetBlue. Their customer satisfaction and word of mouth
advertising is unprecedented in the airline industry. They keep adding
more planes and filling them up (with a greater than 77% load factor)
while the bankrupt airline companies just keep doing TV ads.

Why? TV in every seat helps. So does their snack policy. Other airlines
cut the freebies to save money, but JetBlue invests more in snacks. [I
can vouch for this: I took my first JetBlue flight to NYC last week and
I jokingly asked the stewardess for “one of each” — they had about 7-8
different kinds of snacks — and she said “sure.” Of course I really
only took one, but the fact that they were willing to be generous
impressed me.]
Seth said humans hunted for thousands of years but would have gone
extinct if it weren’t for farming. Today advertisers need to stop
“targeting” users, which is a hunting term, and instead, “work the
grapevine”, by getting everyone talking about their products.

He gave lots of examples of companies that are built by word of mouth,
and by getting their ideas to spread. The Atkins diet got people
talking. OFoto (photo sharing) got people sharing with each other. He
said the iPod won because everyone saw the white headphones and it
marketed itself.

Today, marketing tools are more powerful than ever before, but what
marketers have to do is tell a story, an authentic story, that gets
everyone talking about and sharing their ideas with others.

He calls this the Fashion-Permission Complex (which will replace the
TV-Industrial Complex). He said tell your story to your best sneezers
(people who love your products or services) and make it easy for them
to share you story with everyone else.

Here’s a great example.

In 1990 a man named Don ran Hallmark card and gift stores. Heavy card
users would buy about 50 cards a year. Don came up with an idea to sell
“collectible Christmas ornaments in July” — their slowest month. They
priced them at $10 each.

Hallmark got permission from customers who bought ornaments the first
year to notify them next year when the ornaments were available. Year
after year the permission base grew.

In 1999, the Wall Street Journal wrote an article about this Hallmark
success story. That year Hallmark made $100 million in Christmas
ornament revenue without spending any money on advertising. All they
did was send an anticipated, relevant, personalized postcard to all the collectors.

After Seth’s speech he took some questions from the audience.

During Q&A I learned that he personally answers every email that he receives. Very cool.

Also, he said he gets tons of email from Turkey. A woman in the
audience who was from Turkey wants him to go there to speak. Clearly,
his ideaviruses are spreading all over the world.

He also told advertisers to work with engineering and not just to take
a finished product and try to advertise it. He said, “go upstream,”
talk to the chemists, help them create a product that is worth talking
about. Engineering is marketing.

He said the role of agencies will become consulting with R&D so
they can give you a remarkable product that will be easy to market.