|
 THE FUTURE of marketing and advertising is there for anyone to see --just log onto the Internet. Few entities have been as dynamic as the World Wide Web, which, in less than a decade, has been transformed from a research enclave to the Main Street of the world. The Internet is a subject of intense discussion around the globe, and the rate of change on it is amazing--nothing seems to stand still. Accordingly, we have the luxury of watching a process unfold in what seems like time-lapse photography.
While much has been written about the social impact of the Internet, its powers of isolation and connection, and even its role in political life in places like China, less has been said about the impact on the economy, except for the stock market. The transformation of the Internet from a medium of personal expression to one of economic opportunity has been steadily unfolding.
Although the Internet is not yet equal with other forms of marketing media in terms of returns, it has the enviable position of being the most positively dynamic. The last half-decade saw declines of around five percent in the amount of hours per week Americans watched network television, listened to the radio, and read newspapers. A few media--magazines and books, for example--grew at about the same rate of five percent. Only cable TV showed serious growth over this period, with an increase of approximately 50%.
In contrast to these other media, the research firm of FIND/SVP determined that the Internet rose from eighth to about fourth place among consumer media over the past five years, representing a fivefold increase. Part of that increase was fueled by the growing use of credit cards on the Internet. According to MasterCard International, the most-often purchased products were software (41%), followed by books (29%) and computer hardware (18%). Smaller, but growing, categories include cards, food, airline tickets, CDs, flowers, and clothes. One Internet advertising agency, the Double Click Company, believes that, worldwide, Web users now total 150,000,000, and this may be conservative. The World Wide Web, in spite of some resistance from those who treasured its earlier more-academic and free-spirited nature (back when "everything on the Internet was free"), has become a booming marketplace. Web advertising is expected to reach $9,000,000,000 annually by 2002. PCMeter says that business users spend almost two-thirds more time on the Web than home users, and 71% of online consumers utilize the Internet to get information about products they buy. One of the goals of marketing is contacting potential customers directly, without investing in a big ad or research budget. With the Internet, this is almost magically possible. While banner ads on websites sometimes get no more than one percent response (compared to five-seven percent for direct mail), the cost is dramatically less. A website may cost $5 for each 1,000 individuals who view a marketing message, while direct mail could average $50 to reach the same 1,000 sets of "eyeballs." In mail and phone media, marketers must decide how detailed their targets need to be since, the more specific they are, the more expensive the process becomes. On the Internet, though, it is possible to test advertising banners on a variety of sites at relatively little cost, then continue with those that produce the best. While it is possible for marketers to manage this feedback process themselves, a number of entrepreneurial firms have sprung up to provide this and related services. One longer-term practice--if "long-term" can be used in relation to the Internet--is the use of banners, which advertise a website on other sites and provide a quick link. This widespread use was due in part to the practice of the link exchange, where sites advertise each other. The trouble with banners is that other companies advertising on one's own site encourages continued travel vs. getting potential customers to stay and act. A now-popular tactic for increasing the volume of potential customers is buying search engine listings, which are priced by the popularity of search terms. For example, in the travel industry, the word "travel" would be one of the most-popular terms, as are more-devious terms, like a connect when any search uses the word "sex," one of the most-expensive listing terms. If you are on a right budget, you can get "leftover inventory" cheaply, such as "Bora Bora," but this is usually much less effective for capturing "qualified traffic" who will actually spend money at your site. While the advertising banner is still a prominent feature of most websites, it has become increasingly clear that the Web is a natural direct marketing vehicle in other ways. As opposed to broadcast or print advertising, which "casts its seed on the waters" and hopes for good results, direct contact establishes the most likely marketing targets prior to communicating its messages. In contrast to more-passive advertising, which aims to create awareness or make an impression, the direct marketer can get immediate feedback using an electronic format. There is a wide range of up-to-the-minute data being developed that allows a marketer to see clearly the success of a specific marketing approach. Stated succinctly, the goal of direct mail is to encourage action--e.g., to get a recipient to pick up the phone, mail in a reply card, or place an order. A wide range of Internet response measurements--such as matching of server logs and URL (uniform resource locator) of origin to consumer behavior (type and amount of purchase, etc.)--allows marketers to adjust ad buys and refine messages in "real time" as they move through a marketing campaign. This is dramatically different from past approaches, which, at best, allowed a post-mortem at the end to balance costs and benefits. One of the leading assessment techniques is the use of dedicated satellite sites, placed away from a company's main site, to handle specific marketing programs. Another is the utilization of a marketing network, where alliances of sellers and advertising banner sites feed each other data on traffic, usage, and sales decisions. As a result, Web spending on specific advertising sites can be assessed in real time, allowing marketers to determine what mixes of creative banners, animation, and offers produce what levels of sales or qualified leads. Accordingly, decisions can be made on what websites to buy from, based on cost per response or traffic levels. Making use of this information, many Web marketers are moving to shorter-term buys of ad space than were possible for print or broadcast media--for example, in units of two weeks or less. The present industry wisdom is that Internet marketing is running at 50% of other direct marketing in terms of cost per qualified lead, making it very practical for smaller and start-up companies. The Internet continues to evolve along its unique track with configurations not found in other contexts. For instance, a rather intense discussion continues among Internet observers over whether net users are active tool users or passive receivers, like a TV audience. Patrali Chatterjee of the Marketing Department at Rutgers University says that TV users respond to saturation ad exposure with a gradual "wear-in" growth in awareness, but net users have more control and so make a yes/no decision upon the first viewing of an ad. Therefore, TV ad response rates rise after first exposure, while Internet ad response rates drop. A significant challenge for advertisers has been how to measure use in website advertising accurately. Initially, the use standard was a "hit" on the page, but this merely measures the opening of a file, which can be each major graphic image on a page. Therefore, a single user visit can result in numerous hits. A more useful measure is the "impression," or one view of the whole page. Another measurement approach is counting "click-throughs," the use of internal links to get from the website entry point to the Web page. This indicates actual use of the site and level of interest. E-mail marketing In electronic media marketing, e-mail presently stands at the spot that website marketing did a few years back. Just like with the World Wide Web, the biggest question facing e-mail marketers is a cultural one--i.e., who "should" you send marketing e-mail to. Email is still perceived as a personal and private message system between friends and business associates, where third-party intruders are not welcome. As the old marketing maxim goes, "Nothing is more powerful than good will, unless it is ill will!" The industry has developed a number of principles for initiating successful e-commerce, which are similar to the general roles for direct mail ad copy: * Like an envelope, an e-mail needs to be opened to do its job. Use the Subject Header as the headline, so that it will inform and grab the reader. * Don't ask for too much in an unsolicited email. The best tactic has proven to be to direct the recipient to a relevant website. The ideal is a unique site where the response is tested and the results are tracked. You can incorporate the Web address in the e-mail through an html (hypertext markup language) link or a cut-and-paste address. Keep this dedicated website clean--e.g., don't use a lot of animation or other bells and whistles--and deal with those nervous about using credit cards on the Web by providing a manned 800 number. * All in all, e-mail marketing must follow the same principles as any other marketing. The focus has to be on the recipients, in terms of the benefits they will receive, the wonderful offer being made to them, and the emotions that will be produced by this opportunity. * Finally, the 40-40-20 Rule of Mail Campaign Success must be followed. This states that the copy, graphics, theme, and other "creative" issues comprise a mere 20% of the strength of the campaign. The rest is 40% consisting of the right price, product, deal, and selling party (brand)--combined with 40% audience (the right list, media, and/or advertising forum). There is certainly no question about communication potential, but marketers must understand to whom they are talking. To avoid unwilling recipients, marketers must know whether the builder of their target list included a viable opt-out mechanism, making it easy to remove one's name from the list as it was being compiled. They should be able to identify the names that came by way of an opt-in procedure (where consumers ask to learn more about a product), which then leads to a fully enthusiastic list of potential customer names. Then, marketing becomes a partnership between those offering a product or service and those interested in obtaining it. The experience of an informal e-mail campaign for a new book promotion which went from wildly successful to wildly unsuccessful in a few short weeks based on the level of unsolicited intrusiveness of the e-mail communications is a great lesson on the dangers of "guerrilla marketing" when its limits are poorly understood. While a TV commercial has 30-60 seconds to influence a potential customer, on the Web, the average is merely five-10 seconds before the potential customer clicks away to another page or site. Website advertisers are starting to look at how to gauge responses vs. click-throughs, but website technology initially only allowed small and static ads, which don't catch surfers' attention. "Streaming" technology allows incremental delivery from startup after the first few increments, so the piece is viewed as downloading continues. Another innovation is "live banners" with video and audio clips and interactive modules (like product specifications). Cross-media campaigns continue to hold their own in this Web-addled marketing environment. It has become a common practice for high-technology enclaves such as Silicon Valley to be covered with "Internet billboards" along commuting routes, touting the virtues of this or that new media startup to venture capitalists and potential employees as they travel the endless California highways. Other cross-media strategies include using old favorites in new guises, such as direct response television (e.g., the Shopping Channel), which remains a powerful medium. Half-hour infomercial slots on cable shopping channels started off almost free, but now are prohibitively expensive, although short-form (two minutes or less) versions still are affordable for use in product sales, lead generation, or product demonstration. Technical challenges When managing incoming orders for products or services on phone, fax, and/or e-mail, the worst problems are not the consumer's, but the company's. The goal is to juggle the various inputs equally, so that customers can quickly reach the company through the media they choose. The challenge is supplying useful and persuasive information to any inquiry response and then following up in a timely manner. Accordingly, marketing by e-mail needs as much attention as a written letter, including to its quality, clarity, coherence, and timeliness. This is tree as well for any communication on a website, especially the directions that lead the customer through a site, known in the trade as microcontent. A website design must be responsive to all contingencies, including unexpected levels of success. A national nonprofit organization launched a website with a very effective media campaign, including a White House mention on CNN/CSPAN. Within the first 24 hours, it had nearly 1,000,000 hits, and this success soon became problematic. The single http (hypertext transfer protocol) server froze (too busy), and some of the initial public enthusiasm was dissipated as the site shut down repeatedly. The lesson there for marketers is to think in terms of unexpected success and redundant systems whenever budget allows it. Of all the failures in the Internet marketing world, the most frustrating is a failure from too much business. Over time, the Web has much better potential than any other medium for building databases that match consumers to past choices through looking at customer behavior within a website--e.g., what they look at, for how long, and what actions they take. This could bring an entirely new level to the practice of developing consumer "hotline" lists of most-recent purchases. These could then be rated by the recency, frequency, and average monetary value of the purchases of a specific consumer within specific product categories. In most cases, past behavior is a far better predictor of future behavior than most demographic profiles. Getting consumers' attention in the midst of an information explosion isn't as easy as it once was. A productive first step for a marketer is to establish safe and effective routes through the clutter of the Internet. This builds trust and distinguishes the site. A next step could be to develop alternative exercises that create connections with customers through innovative means. A leading goal of Internet marketers is to increase the number of hooks that online companies can sink into online customers. Amazon.com did this by asking existing customers to "Help us build your dream video store," as it also did for its music site. As a result, these customers are more likely to use the site in the future. A growing perception on the Internet is that the "low-hanging fruit" is disappearing as the marketing scene gets increasingly crowded. As a result, the concept of competition in an open and collegial atmosphere appears to have turned a corner as competitors begin to "eat each other's lunch." One example of this is the trend for companies to purchase keyword rights on portal browsers that relate to competitors, including trade names, product descriptions, etc. Then, when a search is initiated, an advertising banner for their own company's competitive product pops up with the search results. At least one lawsuit is under way on trademark grounds, but the practice illustrates how the tone of Internet marketing is shifting. Gone is the "opening of the West" feeling that there are an unlimited number of customers, and enough for everyone to share. The Internet is a moving target, but a few patterns are already evident. The dynamic of this entity most resembles that of complex, self-organizing systems. The size and fluidity of the Internet allow it to respond to a range of interactive "change drivers." One factor that can override price is "branding," which can be summarized as the building of consumer trust relationships. A good example is Amazon.com, which often does not offer the lowest price for books, but continues to enjoy high sales, though it took until the beginning of 2002 to show a profit. This trust building process can include positive media exposure in a range of contexts, connection to other trusted institutions through marketing alliances, and a longer-term existence before entering the Internet market. The Internet continues to be a tug of war between New Age cooperation and cutthroat competition. Which one will predominate, only time will tell. Although complex system theory states that cooperative systems are healthier and prosper over the long term more often than highly competitive ones, humans continue to be short-term creatures in many situations. Nevertheless, the basics of marketing continue to hold true. Consistent success is not possible without at least one, if not all, of the classic elements of a quality sales offer: something new (unique, surprising), something useful (essential, fundamental), and something motivational (touching emotional bases). As long as the Internet continues to enhance human growth and offer the promise of prosperity, it will continue to extend into all aspects of modern life. It is clear that the process is just beginning and, like any new technology, a number of surprises still lie ahead. Tim Mack is a principal in AAI Research, a Washington, D.C.-based marketing research firm, and a board member of the MIT Enterprise Forum, which advises technology start-ups.
http://articles.findarticles.com/p/articles/mi_m1272/is_2682_130/ai_84184865 COPYRIGHT 2002 Society for the Advancement of Education
COPYRIGHT 2002 Gale Group |
