Randomness, material I wrote for a class

For a class on Online Marketing, I had to dig up and review to articles on some elements of online marketing that interested me. I've purposefully decided to post one of my reviews here, as the article was very interesting (showing how spam can be profitable)

Bibliography - The Value of a Name - Arthur Middleton Hughes

(I'd like to add an alternative title: "Why spam is profitable." On a flight of fancy, I decided to seek out articles that provided a profitability comparison between direct mailings in the physical world, and digital direct mailings (email, possibly spam). I found this article to be an excellent discussion).

Hughes (2002) presents an analysis of direct mailing as compared to emailing, for the purpose of increasing revenues, both directly and indirectly. Hughes initially presents the problems behind existing data mining (including privacy, as relative value of information). Hughes then brings in an anecdote that spurred this paper into existence, and uses it provide an initial example on the value of data mining, as well as a simple calculation of the value of some mined data.

For the bulk of the paper, Hughes dives deeply into the calculations to find the value of some aggregate data, but then does well by tying it back together in an intelligible fashion. Hughes has a brief diversion to note that the value of the data may be significantly higher when market segmentation is brought into play, but does not expand further on this. Hughes' math continues for an analysis the value behind an improved retention rate, as well as specific marketing that is enabled by email (low cost products and last minute specials).

Hughes also gives special concern to the value of specific retention and followup communication, to help keep a customer. Hughes then also ties in the value of viral marketing with email (potential for a very high response rate), as well as newsletters. Hughes also covers a somewhat dark field of emailing marketing, namely renting out email lists. This is treading into the territory of spam, and provides a quick view of why spam is so profitable. (Hughes entirely avoids the mention that renting out lists can be a shady and possibly unethical business.)

Finally, Hughes ties up the article by noting that most companies can benefit from at least half of the practices he described to gain at least $15 of value out of every email address that the company has. Additionally, Hughes points out that it seems no company has worked out the value of emailing marketing with any degree of precision, and that further email address collection will positively impact any company.

References

Hughes, A.M. (2002). The value of a name. Journal of Database Marketing; December 2002, Vol. 10 Issue 2, p159, 16p