--------------------------------------------------------------------------- Guardian Unlimited (C) Guardian Newspapers Limited 1999 --------------------------------------------------------------------------- http://www.guardian.co.uk/Archive/Article/0,4273,3850829,00.html Thursday April 8, 1999 Online: Second Sight Melissa is a marketing tool By Esther Dyson Guardian Unlimited Most right-thinking people hear about Melissa the virus and shudder. But a few politically incorrect marketers are marvelling at her ability to reach the masses overnight. Imagine attaching your marketing message to such a virus. In fact, that's what marketers are already trying to do. When this works so well that it clogs e-mail systems, it's called a virus, but when it happens with the active involvement of the human carriers, it's called viral marketing. The best viral marketing is not just word-of-mouth, as some people carelessly assume. Nor is it multi-level marketing, where Juan sells to Alice and then gets a cut of whatever Alice sells to Fred. It is when users actively recruit other users, not for pay, but because they benefit from a larger user pool, just as virus DNA benefits from the spread of a virus. As with any new concept, anyone can define the term. Steve Jurvetson and Tim Draper of Silicon Valley venture capitalists Draper, Fisher, Jurvetson, are the foremost proponents of the technique. They have even posted an essay about it on their website, mostly describing their success with Hotmail, one of their best investments, sold to Microsoft last year for upwards of $300 million. Each Hotmail user, who signs up for free, markets the service to others because of the sig file attached to each Hotmail message: "Get Your Private, Free Email at http://www.hotmail.com." Each time the user uses the product/service, he's promoting it to others. You could almost say that any campaign that gets the customers to flaunt a brand name is viral marketing. But getting people to wear your T-shirt is not viral marketing. Viral marketing, as I define it, is where the original user gets a benefit from the spread of whatever is being marketed. That is, it concerns products or services that benefit from so-called "network effects" - those same disproportional returns to early entrants that are the subject of so much discussion concerning Microsoft. That is why Hotmail can be viral in some cases, but not in others. In the wired world, where everyone has e-mail, Hotmail user Alice doesn't particularly benefit from Juan's using Hotmail, because she can reach him as easily at Demon or on AOL. In the less wired world, where most people don't have e-mail accounts of any kind, Hotmail can spread, well, like a virus. As Jurvetson and Draper say: "The Hotmail adoption pattern is that of a virus - with spatial and network locality. People typically send e-mails to their associates and friends; many of them are geographically close, and others are scattered around with clusters in areas of high Internet connectivity. We would notice the first user from a university town or from India, and then the number of subscribers from that region would rapidly proliferate. The beauty of it is that none of this required any marketing dollars. Customers do the selling." There's a delicate balance between ownership and reach: the ideal viral marketing product is semi-proprietary. That is, it needs to be generic enough for its use to spread quickly, but people shouldn't be able to interact with imitations. At first, Internet telephony didn't spread, because the proprietary systems meant you could talk only with a small group of people using the same provider. When Internet telephony meant you could talk with anyone who had a phone, it became much more useful, but the few who had it had less incentive to push a particular brand onto others. The current rage in viral marketing is relationship or networking tools - Six Degrees or PeopleLink. A couple of times a week I get e-mails from someone wanting me to join one so that I can make new friends. Do I need new friends and contacts? Maybe, maybe not, but enough people do that these services are spreading rapidly. The business model here is advertising. Of course, sometimes the marketer forgets about the business model: the goal is simply to sign up users, and then let someone else figure out what to do with them. That's what Mirabilis did with its ICQ instant messaging service. It acquired 12 million users before it sold out to AOL for $300 million. The best current example of viral marketing is the new range of Gizmoz from Zapa Digital Arts. Gizmoz enable you to build your own identity and then have other people link to it. Instead of static business cards such as Versit's (which simply sit in someone's "card" file and are sent to other people), Gizmoz work as live links. You send someone a link to your Gizmo; then, each time they look at it, they link back to the original (either at your site or at Zapa's) and get the current version. What's the benefit to Zapa? Well, in order to update your Gizmo - which could be kinds of biscuits you're offering for sale or of your need for a lift from Cambridge to London next Friday - you will want to go back to Zapa for new and improved graphics. This isn't viral marketing just for Zapa: it's viral marketing for Zapa's users, because it lets them spread their messages to others. In principle, you can "own" your own gizmo, but you can also share it. That keeps you and other users coming back to each other - and to Zapa for new shareable Gizmo components. So what's to keep everyone from using viral marketing? The backlash is already in sight as some vendors start moving towards multi-level marketing for products where there's no benefit to the redistributor other than a commission. But just as the difference between e-mail and spam is a delicate social matter, so is the difference between gifts that delight both giver and receiver, and using friends in a marketing scheme. So what is the value that Zapa is giving to its customers? In exchange for their attention, it is selling them the ability to get attention from other people. Marketers want attention so they can sell ads to people who sell products. People want attention because, well, they're human. They don't want marketers' attention, which they know is conditioned upon their eventually purchasing something. They want the attention of other human beings. Good on them! But I have to add: in the past, getting attention required nice clothes. Now, it requires nice Gizmos. Is that progress? Or is it just human nature, reinvented? Or am I just too cynical, and are Gizmos actually a tool for creative users to express themselves with? http://www.guardian.co.uk/Archive/Article/0,4273,3850829,00.html --------------------------------------------------------------------------- Guardian Unlimited (C) Guardian Newspapers Limited 1999 ---------------------------------------------------------------------------