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June 17, 1997. Marketing in the Internet Medium
The most prevalent use of the Internet today is that of a marketing and advertising medium. Ever since the advent of the browser which brought point-and-click simplicity and multimedia graphics to the Internet, the medium has exploded into the public sector. It has come into its own as the new mass medium, touching the lives of a global audience far more expansive than any that could be reached by traditional media such as television, radio, or print. Almost overnight, we see web addresses next to or in place of (800) numbers on commercials, billboards, magazine ads, t-shirts, and sides of buses. Businesses are frantically working to develop presences on the Internet.
But how is the advertising and marketing in this medium different from advertising in more familiar media? Does this medium provide some unique advantages not easily achieved by the other media? In this article we will examine several examples of marketing in the Internet medium. Each example will illustrate how companies have successfully used this medium to attract, inform, and serve their customers in ways simply not possible before by other media.
Most websites in existence today serve the simple function of providing information by displaying static webpages like a brochure. Companies can now showcase their products and services to a global audience in a medium that is universally accessible by any computer anywhere. Also the ease of updating and speed of delivery compared to traditional paper-based media mean that these companies can reach a far greater audience and still save time, labor, and money. For example, if a company has some breaking news or limited-time special offers, they would not have to re-print brochures and do another mass mailing. They simply make the changes once on the website and every single audience member will have access to viewing the updated information. The key to using the Internet medium for this kind of marketing is to ensure that people visit the online site. Banner advertising is by far the most prevalent method of "driving traffic" to websites. There is also the opportunity to cross-sell or up-sell complementary services and products. For example, U.S. Robotics which sells the popular Palm Pilot can cross-sell Now Software¹s contacts manager software package called Now Contact. But beyond simply providing "brochure" information, which other media can do, the Internet can be uniquely valuable in other ways.
Some companies have ventured to use the medium for more than advertising. Companies like FedEx and UPS were among the first to use the medium for customer service functions. Customers can now come online at any time to track their own packages, get pricing information and answers to frequentlyasked questions, and give feedback. Using the Internet medium, these companies have saved significant amounts of time and money by using fewer human representatives to service these repetitive types of inquiries. American Airlines now has a site where people can come online to book their flights, manage their frequent flyer miles, and get sundry information about travel destinations, special offers, etc. By giving the customer the tools to serve themselves, these companies have achieved more customized and immediate customer service, while cutting costs. In the continued effort to serve the customer more completely, the marketer also needs to get better information about their customers.
There are many websites that ask visitors to fill out online forms in which they specify personal information and preferences. This information is extremely valuable to marketers, and was not easily gathered by other media. But even in the Internet medium it is sometimes difficult to "extract" accurate information about each user. Several sites have done so successfully, though. For example, the Pepsi site uses a creative narrative in which the user fills in the blanks to complete the storyline with his own personal information. The story is about a "squatter" (the user), what he does for fun, his spending habits, food preferences, how much Pepsi he drinks, and other information. Another example is the Firefly site which recommends movies and music to users by comparing their stated preferences with those of other Firefly members. In this example, they used straightforward electronic forms to collect the demographic and preferences information. But it was successful in collecting audience demographics because the members are incentivized to provide accurate information in order that they get accurate information in return. Other websites such as Riddler or Sandbox have devised extremely creative interactive games to extract demographic information from users. In these scavenger-hunting games players are encouraged to trade their demographic information for clues.
The interactive nature of the Internet medium makes it uniquely capable of collecting valuable information about the audience. However, care must be taken to ensure that accurate information is collected; otherwise the additional information could be more misleading than the lack of such information. That being said, it is always true that with a better understanding of customers and their preferences, marketers can target certain demographic interests and better satisfy the customer.
Narrowcasting and Pointcasting
With good information about the customer the marketer can narrowcast or even pointcast. Narrowcasting refers to marketing, which sends highly targeted advertisements to a narrow segment of the audience, which has a common interest or characteristic (e.g. males between 18-35 who like sports). Pointcasting refers to marketing which targets individuals with products and services meant to satisfy individually stated preferences and needs. Narrowcasting has been the buzzword and focus of many websites to date. Similar to the evolution of cable TV, where the generalist cable channels gave way to specialized cable channels (e.g. The Weather Channel with 24 hours of weather), websites which started out providing information about every conceivable topic has found it more lucrative (and necessary) to focus on a specific topic or a specific audience, where their core competencies lay. Highly successful examples of such narrowcasting include the following: 1) Disney¹s Blast, which focuses on kids, 2) ParentSoup, which focuses on parenting for moms, 3) Physicians Online, which is a community of certified and registered physicians, and 4) Yahoo, which targets narrow audiences as they self select by clicking down into deeper and deeper subcategories of topics during a search.
The next wave encompasses pointcasting, in which individuals are targeted. Some initial attempts include the push technologies which aim to deliver highly personalized content directly to the individual, based on stated preferences. Some more advanced technologies can also observe online behavior patterns to deliver more personalized information without asking the user to fill out a lengthy online form. The medium of the Internet uniquely allows this high degree of targeted marketing. If the marketer can provide a product or service that is highly relevant and highly useful to the narrow audience or the individual, then there is a high probability that the group or individual would act (e.g. to make the purchase).
By providing the ability to make the purchase immediately online, some websites can now complete the entire sales cycle by capturing the sale. No marketing effort is complete until the sale is made. In the medium of the Internet, there is the opportunity to integrate the entire sales cycle from initial introduction through the close of the sale. This could not be done by any other medium. By providing the convenience of online commerce to the customers, a greater percentage of impulse purchases is captured and fulfilled immediately and a wider audience than can be reached by traditional channels (e.g. stores) is served.
Creating or Extending Brand
Beyond just creating the possibility of a sale or even completing the sale immediately online, the medium is especially useful in extending a brand¹s reach and increasing its accessibility (people can come to the website 24 hours a day 7 days a week, at their convenience versus being at the right channel at the right time to catch a 30 second spot on TV). In cases where real product differentiation is small but brand image is "everything," the Internet medium is a great branding tool. For example, there is very little physical difference between a clear alcoholic beverage like Zima and an amber alcoholic beverage like Budweiser. But Zima has created the image of a subculture of "Z Tribe" members and Budweiser sports everything from racecar sponsorships to Budweiser apparel for the American "everyman." The Internet medium is accessible 24 hours a day, 7 days a week on demand. It is not limited to 15 or 30 second spots on particular channels at specific air times. Users can come to the site to interact with others who share similar interests, play games, satisfy cravings, or buy branded merchandise. Branding is a matter of staying at "top of mind." And all the attributes of this medium make it uniquely powerful in creating or extending brand.
Leveraging New Technology
The new technologies of the Internet have already been shown to provide a more compelling presentation of information through the use of multimedia. Specific examples of how these technologies are used in the marketing effort are the following. General Motors has used QuickTimeVR to present 360-degree views of the interiors of their automobiles. Sony, Warner Music, CDNow all use streaming audio and video technologies to deliver sample clips of the music products they sell. Toyota uses Java applications to help the user calculate car payments for leasing and purchasing options. Online travel agencies can not only supply the customer with images and sounds of a vacation destination, they can also allow customers to choose their seat on the airplane using technology that interfaces with airline reservation systems. The rapid rate of technological innovation will lead to other uses of this medium that are not even conceivable now. As the technology continues to evolve, the applications and uses of the medium will also continue to evolve.
Enhancing Overall Value to Customers
Most importantly, companies are using the Internet medium to increase their overall value to customers. For example, ESPN can provide hourly sports updates on TV, but their website ESPN Sportszone can provide up to the minute scores and information. CNN can report news on regularly scheduled broadcasts on cable television. But their website CNN Interactive can provide news on-demand and links to related information that supplements their stories. Software vendors can now provide upgrades, troubleshooting assistance, related information on their website to service the customer and even develop good customer relationships.
In conclusion, we have seen the Internet medium in action. We have used examples to illustrate how the medium is similar to other traditional media and how it is different and more powerful. The Internet has its own value proposition, but it is a complementary medium which works in conjunction with other media to deliver an integrated marketing package. Companies must identify and use this medium for its strengths. And by doing so, the Internet medium will be a vital tool for companies to attract, inform, and serve their customers.
___________________________________________________________________ 1997, Dr. Augustine Fou
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