Why Every Marketer Should Understand the Permission Curve
Elie Ashery, Gold Lasso
The concept of permission marketing has been around since commerce met the Guttenberg Press, but wasn't defined as such until Seth Godin penned his famous book 14 years ago, encapsulating the concept in its title. Ever since, marketers have flexed the meaning to accommodate their ideologies and justify budgets. However, the practice of permission marketing continues to be complex and elusive for one simple reason: the challenge of getting consumer permission in the first place.
In an age where the proliferation of digital marketing channels has helped to tear down permission acquisition barriers, new technologies continue to emerge that enable consumers to better filter marketing messages than ever before. The RegReady Permission Curve (chart below) is a framework marketers can use to better understand the tradeoffs between consumer permission and marketing effectiveness.
This dichotomy between direct channel access and filtering is demonstrated best in mobile use, and SMS marketing budgets in particular. The average U.S. consumer spends roughly 4.4% more time using their smartphone than reading and writing email (3 hours/day smartphone vs. 41 minutes/day email). However, in 2011 (2012 statistics are not available yet) U.S. companies spent 3.6 times more money on email marketing than SMS marketing ($443M vs. $1.6B).
Considering the ubiquity of both SMS and email features on mobile phones, why is there such a disparity between their respective budgets given their usage times? There are many arguments to this question, such as cost differences and the overlap of usage time of email on smartphones. Although most of these arguments have merit, they lack the simple explanation of marketer access. Unlike SMS, email's permission system is murky at best where marketers define permission that best suits existing needs. With SMS, permission is distinct, federally regulated, and controlled by mobile carriers. Simply put, the smartphone, hyped as a bleeding-edge direct marketing channel, also affords consumers unprecedented control of message filtering resulting in permission as a natural starting point for marketers.
Even though technological filtering started with direct channels such as SMS and email, it would be unwise for marketers to think it will stop there. Other channels typically reserved for display and branding such as television, apps, and websites will one day become vulnerable, as well, and will force the industries to rethink their long-term business models. Consumers are starting to adopt filtering technologies for these channels, such as browser plugins that block ad tracking to Dish Network's AutoHop ad skipping feature. Even grassroots efforts are springing up through the likes of Kickstarter, where a group of engineers effortlessly raised $213,392 to manufacture a product called AdTrap, billing itself as “a small, zero-configuration device that removes ads from your Internet connection before they reach any of your home devices.”
Since new filtering technology and techniques help to preclude channel access for marketers, the RegReady Permission Curve can help to better understand the different types of permission marketers engage in and their overall effectiveness versus the complexity of access. Based on research from RegReady, a new startup that helps companies acquire marketing permission through community efforts, the “Permission Curve” they coined has four types of consumer permission that ultimately determine the degree to which marketing efforts are most successful.
Explicit Permission: When a customer or prospect directly and explicitly gives a company permission to market to them. Examples of this include when customers or prospects request product and service information, registration for special deals and incentives, newsletters, and alerts. This is the best and purest level of permission a customer or prospect can give. Explicit permission provides the greatest results but is usually the most complex to acquire.
Implied Permission: When a customer or prospect gives a company permission to market to them by their actions, such as completing a sweepstakes form, making a purchase, or through general website and product registrations. In its purest form, traditional marketing channels such as television, radio, and periodical advertising are based on implied permission. However, with digital channels, marketers need to be more aware of some of the negative repercussions of implied permission. Implied permission tends to deliver relatively good results as long as marketers align content and offers closely with the customer or prospect's implied action. An important thing marketers need to be acutely aware of with implied permission is that when it's acquired using incentives, its effectiveness is extremely diluted.
Secondary Permission: When a company, a customer, or prospect gives their permission to sell or rent their information for marketing purposes. Secondary permission is often included in list and data purchasing, lead mills, affiliate marketing, and list rentals. Secondary permission is usually incentivized by intermediaries, opaque to the prospect or customer, and is often abused by marketers. Secondary permission is relatively easy to acquire but yields marginal results compared to explicit and implicit permission. However, it has proven effective when reserved for unique markets and demographics.
No Permission: When a company tries to engage prospective customers without a prior relationship or affiliation. No permission is the premise of most direct mail, telemarketing, Web and mobile tracking, and is existent in some email marketing and list and data purchasing.
Applying the Permission Curve framework to one's marketing budget is a relatively easy exercise. Simply group the dollars to be spent according to the activities that match the permission descriptions. From there, compare the ROI of each activity. Your results, by the type of permission required for each marketing activity, should come close to the curve. By applying the RegReady Permission Curve, marketers will have another data point in their arsenal to better understand the effectiveness of their marketing efforts. More important, marketers now have a framework to find new and creative ways to acquire customers and prospects' permission.
Elie Ashery is CEO of Gold Lasso.