The evils of mass marketing

By Thane on Wed 01 June 2011

Reading a post about the death of Usenet, a thought on mass marketing was sparked by the second paragraph of the article:

Of course, in the last decade of Usenet's life, it became increasingly emaciated and diseased, robbing many of us of those fond memories. Legitimate users flocked to newer mediums and all that was left was the infectious spam.

McAfee commissioned a report on the environmental impact of spam a few years ago which was quite interesting. Among their key findings:

Globally, annual spam energy use totals 33 billion kilowatt-hours (kWh), or 33 terawatt hours (TWh). That's equivalent to the electricity usage in 2.4 million [American] homes, with the same [greenhouse gas] emissions as 3.1 million passenger cars using two billion U.S. gallons of gasoline.

The magnitude of this is rather shocking. To add to it, some academics point to the misuse of technology contributing to "information overload", spam being a major factor (Allen and Wilson, 2003).

Why do we have spam? All it is, at the end of the day, is unsolicited mass marketing. Why do people push out billions of spam messages a week? Because they do seem to get a bit of a return. According to a Yale University article, the top three most effective types of spam are:

  1. pornography (5.6% click-through rate),
  2. pharmaceuticals (0.02% click-through rate - most of which seems to me to be viagra-related marketing),
  3. Rolex watches (0.0075% click-through rate).

Just Google'ing "e-mail marketing" brings up a plethora of companies offering "direct marketing" and "e-mail marketing" services. Spam, anyone? Do the tremendous click-through rates above (sarcasm intended) justify your company spending tons of money on e-mail marketing campaigns which, at the end of the day, bring you very few new customers, annoy your good customers, and pollute the environment? Thankfully, e-mail marketers face an uphill battle today with all of the fancy artificially intelligent spam filtering systems available. I'm certainly eternally grateful to Google's spam filtering technology for saving me from information overload.

There are probably entire textbooks dedicated to market segmentation, but at the end of the day they will probably all say the same thing: get to know your customers and their needs and wants. If you can't speak to them face-to-face, which I would consider first prize but is not always possible when you have millions of customers, come up with some kind of clever way of figuring out who they are and what they want. Amazon seems to be quite good at this - take notes.

Finally, regarding commissions, why is it that we see Google AdWords on every damn site on the internet today? It's because of commissions. Web site owners get kick-backs for every person that clicks on those ads (albeit an extremely small commission, generally unjustifiable if you don't expect hundreds of thousands of users to be visiting your site). A large number of "e-mail marketing" companies offer what they call "affiliate programmes", which give people the opportunity to get commissions based on, essentially, how much spam they facilitate in one form or another. There are a variety of examples of where incentives drive behaviour, including the unintended consequences arising from those incentives - just read Freakonomics.

My question to businesses today is: instead of pushing products, fighting with increasingly advanced spam filtering technology, and having to deal with the negative unintended consequences of extremely wasteful mass-marketing practices, why not focus on creating value for customers?

I'm sure we'll all be able to breathe a little easier.