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|Part 1||Online Marketing Strategy||1|
|1||Adding Online Power to Your Marketing Mix||3|
|2||New Paradigms of Online Marketing||19|
|3||Constructing the Online Marketing Business Plan||39|
|4||Corporate Policies for Web Site Content||63|
|5||Marketing Opportunities on the Internet and Commercial Online Services||71|
|Part 2||Online Marketing Tools||95|
|6||Market Research Online||97|
|7||Customer Service and Support Online||111|
|8||Competitive Research Online||123|
|9||Online Resources That Make You a More Effective Marketer||137|
|10||Measuring Results from Online Marketing||145|
|Part 3||Online Advertising||169|
|11||Understanding Interactive Advertising||171|
|12||Buying, Selling, and Creating Online Ads||185|
|13||Using Online Advertising to Build a Community||213|
|Part 4||Online Public Relations||225|
|14||Interactive Media Relations||227|
|15||Writing and Distributing Interactive Publicity Materials Online||247|
|16||Building Relationships with Reporters||265|
|17||Interactive Public Relations Strategies for Your Communities||273|
|18||Building Relationships with E-mail and Private Mailing Lists||283|
|19||Building Relationships with Newsgroups and Forums||299|
|20||Promoting Your Web Site||313|
|Part 5||Online Selling||367|
|22||Designing Your Web Site To Increase Sales||369|
|23||Strategic and Operational Issues for Online Selling||393|
|24||Selling Consumer Products and Services Online||405|
|25||Business-to-Business Selling Online||413|
|26||International Marketing Online||419|
|27||Building Brand Online||423|
|Part 6||The Future||429|
|28||The Future of Online Marketing||431|
|Janal Communications Seminars, Consulting||441|
Adding Online Power to Your Marketing Mix
market reports household use of online services and the Internet has almost doubled in the last year. Households using online services or the Internet now spend an average of 12.8 hours a week online compared to 6.5 hours a year ago. According to Odyssey's research, 48 percent of U.S. households with computers are now online.
years to judge the pioneers who set up stores, catalogs, and customer service and support centers on the Web. Ladies and gentlemen of the jury, the verdict is in: Companies are benefiting from marketing on the Web.
are saving money by providing sales and marketing materials that cut their costs of getting leads, educating customers, and making sales.
There are successes in selling to consumers as well as in the business-to-business marketplace.
and promotion, facts, figures, anecdotes, and case studies show that companies of all sizes reaching out to all markets are benefiting from being on the Internet.
his Web site makes $5,000-$6,000 a week selling supplies for hot tubs via his Web site. His 400-page site offers chemicals, pool covers, pump replacement parts, inflatable dolphins, and other supplies. The address is www.lihottubs.com.
its Web site with minimal employee intervention. "We just received the check and contract by Federal Express for a $50,000 notebook computer lease, from an inquiry on our Web site sent to Fisher-Anderson in Iowa, who approved it within two hours after we sent the application, for a major company with a foreign parent corporation. I never spoke to the person who signed the lease. I did this all over the Internet and Federal Express," says Kit Menken, president of American Leasing. "And this wasn't the first time we have gotten business."
$3.5-billion computing company, has leveraged its expertise in electronic commerce applications to create a comprehensive virtual automotive shopping mall with ADP AutoConnect, http://autoconnect.net. With more than 4,000 auto dealers online and more than 800 links to auto manufacturers and other sites, ADP AutoConnect is the largest collection of automotive information on the Internet and a great example of electronic commerce on the Web.
America's large companies, such as CUC International, a multibillion-dollar company (AutoVantage, www.netmarket.com). Yet the market seems to be so big that a third company, Auto-by-Tel, www.autobytel.com, also has a large presence on the Internet.
wave of discount brokerage firms set up business on the Internet and forced traditional companies like Charles Schwab & Company and Fidelity Investments to follow suit by offering steeper discounts than those given to their phone customers. A report by a securities industry technology analyst predicts the online stock trading market will account for 60 percent of the total commissions generated by discount brokers and 10 percent of all retail stock brokerage commissions by 2001. Bill Burnham, an analyst with Minneapolis-based Piper Jaffray, estimates those commissions will total $2.2 billion. He expects the online trading market this year will more than double from last to account for 30 percent of discount brokerage trading fees. He says online brokerage E Trade is rapidly expanding its online presence and that it is now the third largest, with 13 percent of the market. Charles Schwab is first, with 35 percent, and Fidelity Investments is second.
18,000 customer leads developed by its four-month-old Web site have turned into transactions, according to the president of the company, Alex Perriello. At least 90 percent of the company's inventory is available for review on the Web. The site offers customers convenient access to listings and information, he says, which gives customers "the freedom to contact us only when they are ready to see houses after doing some of their research online."
Investment Research, a well-known investment information company, has added a Web site and delivers three million impressions per month. Clearly, lots of people are on the Internet, despite the naysayers' protestations to the contrary.
consumers or provide them with the information and motivation to visit retail outlets to purchase products, but they are finding more and more customers are willing to buy directly online.
effectively. Wal-mart, www.walmart.com, sells 500,000 products on its Web site but only 80,000 in a retail outlet.
close a traditional sale, but on the Internet, many sales are finished in one sitting.
with computer products each day from sales via its hard-copy catalog, finds that four percent of its $19 million annual sales come from the Internet.
28 percent computer hardware and software ---------------------------------------------- 14 percent books, magazines, newspapers ---------------------------------------------- 9 percent clothing and personal items ---------------------------------------------- 3 percent entertainment and recreation ---------------------------------------------- 2 percent sports tickets and products ---------------------------------------------- 2 percent financial ----------------------------------------------
------------------------------------------------- Computer products $ 323* $ 2,105* ------------------------------------------------- Travel 276 1,579 ------------------------------------------------- Entertainment 194 1,250 ------------------------------------------------- Apparel 89 322 ------------------------------------------------- Gifts/flowers 103 658 ------------------------------------------------- Food/drink 78 336 -------------------------------------------------
*figures in millions
www.cdnow.com, which sells music online, reported sales of $2 million in 1995, $6 million in 1996, and $18 million in 1997. Reel, www.reel.com, sold a thousand movies in its first three weeks online.
according to Jupiter Communications, a research firm, www.jup.com. I say "even" because one would think that these would be the riskiest sites around. After all, you don't know if the buyer will send the money or if the product is in the condition promised. Yet people are willing to take a shot on this buying venture in numbers too large to ignore. Witness First Auction, www.firstauction.com, which has 20,000 members and sold $100,000 in product on its first day and $1 million in its first month. Another auction site, Onsale, www.onsale.com, expects to sell $100 million in 1997 from its 240,000 members!
you are wondering if people really are online, just look at Free Shop Online, www.freeshop.com. As of mid-1996, the company had processed two million orders since it went online in 1994. The site has given away 40,000 rolls of film from Seattle FilmWorks and 20,000 trial subscriptions to the Wall Street Journal. The company has 130,000 members in its Club FreeShop.
products a month and 100,000 people used their credit cards to make purchases, helping to erase merchants' fears that consumers won't use credit cards online for fear of security limitations.
Internet but are finding that it plays an "indispensable" part of the lives of 20 million people in the United States, according to a 1997 survey conducted by research firm Find/SVP. http://etrg.findsvp.com/internet/find.html. Some 9.3 million of those surveyed have logged on in the past year but do not consider themselves regular users and nearly half of all users believe the Internet is difficult to use and confusing. On the other hand, half of all regular users and 60 percent of e-mail users go online every day. Online shopping increased from 19 percent in 1985 to 27 percent this year; a third of these shoppers came from ad-clicks. The number of women online has tripled in two years to 9.9 million. Fifty-five million U.S. nonusers plan to go online in the next year. The Internet accounts for 20 percent of total news intake for regular users and use of television, magazine, and radio has drastically decreased for those users.
Vaidec's 1997 CyberShopper Survey showed that 98 percent of shoppers who purchased something online are satisfied with their purchase. The report conducted for the Internet Chamber of Commerce, based in Denver, showed 52 percent of respondents saying they are online one to two hours a day. They are watching less TV so they can stay online. The average cost of an online shopper's purchase is $142.
a year ago. Some 17 percent of those are online purchasers, more than three times the level of last year.
www.nua.ie/surveys/, or subscribe to its mailing list by sending e-mail mail to:firstname.lastname@example.org with the word subscribe in the body of the message.
of 1997, up 71 percent from 1996. The number will hit 268 million by the year 2001 (a 327 percent increase). See http://dqi2.dataquest.com/info/press/ir-n9744.html.
companies have set up Web sites and that companies connected to their customers via the Internet save 50-90 percent in sales, customer support, and distribution.
sure, but they are increasingly using the Internet to shop. Forrester Research says consumers spent $530 million in online transactions in 1996 and that total annual consumer sales will reach $7.17 billion by the year 2000. Business-to-business sales was put at $600 million in 1996 and is expected to reach $66.47 billion by 2000. Zona Research predicts sales of goods and services used to build and access the Internet will top $100 billion by the year 2000. See www.zonaresearch.com/newsreleases/II3Report.html.
knows how many people use the Internet to research products they buy in retail outlets.
well. A survey of European Yahoo! users, the Pan-European Audience Survey, shows that 23 percent of users in France, 39 percent of users in Germany, and 38 percent of users in the United Kingdom have made purchases on the Internet in the last six months. The report also disclosed that Yahoo! users in these countries have a higher-than-average income. In the United Kingdom user income was three times the national average (pounds sterling 44,000). In France, user income was 274,000 francs (150,000 francs is the national average) and in Germany it was 96,807 deutschmarks, 36.3 percent higher than the national average. The survey revealed Yahoo! users are keen cyberspace visitors, with 73 percent in the United Kingdom, 71 percent in France, and 70 percent in Germany logging on at least once a day.
significant number of purchasers are from other countries. This makes sense when you consider that American goods, especially books printed in English as well as craft items, might be hard to find in other countries.
online bookstore, has never existed outside the Internet. Within three years of operation the company went public and sold its shares on the NASDAQ stock exchange. Founder Jeff Bezos was worth $324 million on the day the company went public.
placement managed by investment firm Alex Brown. The retailer's president, Jason Olim, in a release announcing the infusion, said the money will help fund marketing plans that include becoming "one of the top advertising spenders on the Internet." Alex Brown managing director Thomas Mitchner said CDnow is a business in the right place at the right time. "With local music stores closing and consumers demonstrating more diverse musical tastes, CDnow is experiencing a real convergence of market place trends," he said in a statement.
Filo and Jerry Yang, founders of Yahoo!, the successful Internet search engine and directory. What started as a hobby for two Stanford graduate students during the infancy of the Internet is now a worldwide media venture, with versions available in French, German, and Spanish. Another sign of Yahoo!'s success is its plan to offer its own VISA credit card. VISA holds a 2 percent equity position in Yahoo!
forming marketing alliances. American Express took a minority investment in InfoBeat, a personalized e-mail service providing news, and financial and entertainment information to 1.5 million subscribers. American Express wouldn't provide details but said that it is a "primary" corporate investor, along with the media mogul Tribune Company.
watching the pioneers to see if they can actually make money. The verdict is in. Companies can profit handsomely by marketing on the Internet.
THE IMPORTANCE OF INTEGRATING THE INTERNET INTO YOUR MARKETING PROGRAM
Is your home page hot?
Is your Web page cool?
Does it really matter?
I am sick and tired of hearing these phrases!
What do they mean? Really?
Cool is a '50s term.
Hot is a '60s term.
progeny--know about marketing?
over the Internet.
technology has suddenly been transformed and reframed like the ugly duckling into a medium that is cool--or hot?
question: Does my Web site meet my marketing goals? Does it sell? Does it provide customer support? Does it build and enhance the relationship between customer and company?
marketing conference without hearing a speaker extol its virtues. Hundreds of thousands of people have been exposed to this pasta sauce through the Web and at conferences. But no one asks the vital question: Is anyone buying Ragu? Has its sales increased? Has its market share increased? Has even its share of the people on the Internet who buy spaghetti sauce increased? No one has these answers.
the integrated marketing campaign for Ragu? Why isn't her inviting, motherly face beckoning us from the label of the bottles in the supermarket shelves? Why isn't Ragu taking advantage of its most famous--cool--asset while she is--pardon the expression-hot?
to find out the answers and told them that I planned to write about the site as well as mention it in my speeches around the United States, Canada, and Mexico.
"We have had many requests on just these same questions. Unfortunately, due to confidentiality, we are unable to answer them."
wrote, "We are so glad that you liked our Web site. Unfortunately, we cannot respond due to the amount of requests received."
that prides itself on one-to-one marketing!
marketing program is like putting your architect in charge of designing your house without him bothering to interview you first. He puts in a spiral staircase. Why? Because he has the technology to do so. No matter that you use a wheelchair and prefer a one-story house.
www.sandiegozoo.org, an organization that understands the value of placing the Web into the integrated marketing program.
that include rich, full-color pictures of the inhabitants, easily understandable icons, plenty of useful information, upcoming event schedules, an online guest book, and a custom animal signature prints game.
Embery at the Zoo and Bill Toone at the Wild Animal Park. The conference was attended by students from two San Diego County elementary schools who asked questions about animals. Also participating were several elementary school students who had been using the Web site as a resource for study assignments related to wild animals.
advertising on National Public Radio to encourage listeners to visit their Web site.
information network and product sales by hosting a Web site, www.cartalk.com.
interest in acne treatments with a startling picture of a boy with a pock-marked face, then leads readers to find out more at its Web site, www.facefacts.com, or to call its toll-free phone number.
online chat on America Online.
under the name LiveConcerts.com with Progressive Networks, developer of RealAudio. This shows how one company is extending its brand identity to a new channel of distribution.
its print and TV ads on its Web site. The site goes beyond the traditional ads to give users control of site activities, and tries to build community by offering sections of drivers' favorite roads and extreme sports. The site generates e-mail, which staffers respond to within 24 hours.
within the company. Apple Computer sent e-mail messages to dealers alerting them to a repair-and-exchange program for a particular computer flaw. However, it failed to tell its telephone support representatives, which led to massive confusion and irritation.
Internet presence, fewer than 10 percent of Fortune 500 companies realize the importance of integrating their marketing efforts, according to a study by Matrixx Marketing, Inc., of Cincinnati. Some 60 percent of companies surveyed had not yet integrated the Internet into their customer service program. Instead, they think of the Internet only as a sales and marketing vehicle.
marketing does not and should not exist in a vacuum because the online component is but one part of the marketing solution--not the only solution. To conduct a successful marketing campaign, online services should be thought of as another distribution channel providing a service to prospects and customers. In that way, the key marketing messages of your company should be seen in the online advertising, publicity, and promotion that your company employs. Companies must use a consistent message, typeface, logo, and other elements of the marketing campaign.
has three components:
powerful tools for marketers to extend the integrated marketing program to the electronic media.
professional marketers will demand answers on the issues of accountability, return on investment, and message consistency. They will set up reliable tests, surveys, and benchmarks to justify their online existence and to provide the quality of service and information that their customers seek in a Web site.
ENTER THE FOURTH WAVE OF INTERNET MARKETING--WHERE'S THE BEEF?
We are entering the fourth phase of Internet marketing. The first phase was characterized by technicians who showed that text and graphics could be distributed over the Internet. The second phase was controlled by technicians who said that commerce could be conducted on the Internet, although they weren't very successful at it. The third phase was dominated by a mix of technicians and marketers posting advertisements and sales literature on the Internet, with mixed results. These marketers replicated the Wild West by charging whatever they thought they could get away with for creating home pages and for selling advertising space. No thought was given to measuring results or targeting audiences. This marketing model made professional marketers cringe.
have taken control of the Internet marketing mandate at their companies and are using the professional marketing techniques of testing and measuring activities to show the highest possible results. This phase will also be the one in which companies integrate the Internet into their marketing plans so that all marketing activities will help each other.
marketing were full of starts and stops and a lot of failing flat on the face. Companies went online and learned that not all of their marketing efforts paid off. For example, McDonald's placed two files on their forum on America Online in 1984. One video file contained the entire contents of a 30-second TV commercial that had yet to air. The executives felt that the Internet community placed a premium on seeing things before the general public. They thought this idea would be a hit. What they didn't realize was that it would take a consumer 45 minutes to retrieve the commercial--while paying America Online and the phone company for nearly an hour of connect time! This idea proved to be horrible.
disaster. The other file they loaded made up for the mistake. This second file was a coloring book that parents could download in about two minutes, which is an acceptable amount of time. Parents could print the coloring book on their printers and give a copy to their children. Look at the genius of this move: McDonald's created a positive relationship between the company and the parent; between the parent and the child; and between the child and the company. The coloring book was a brilliant idea! Only by trying new things will the Internet community learn what works and what doesn't in this brave new online world.
their heads. They thought they would become instant millionaires based on the promising demographics of the Internet, which showed the average online consumer to have above-average income and education. What these companies didn't realize is that marketing is as long and hard a process online as it is in the real world.
Internet. Millions of dollars are being spent on developing and maintaining Web sites, and advertisers are spending millions to promote their wares online. In the first three phases of Internet marketing, companies were so happy to be invited to the party that they didn't realize they were going home by themselves. In this fourth phase, Internet marketing teams will be held accountable for their budgets and for producing demonstrable results.
WHERE IS THE SERIOUS MARKET RESEARCH?
When I teach Internet marketing seminars at company locations and at the University of California at Berkeley, most people are only too happy to learn about the new strategies and marketing trends online. However, there are always two people in the class who ask questions like "Has anyone done a study of A-B splits of home pages?" and "Has anyone shown the effectiveness of promoting a Web page with direct mail advertising?" and "Has anyone tested pricing models on their home page?" In all these cases I say no. There is a distinct lack of reliable marketing research to create benchmarks for success on the Internet, rules of thumb for spending plans and returns on investment, and other measurable statistics that marketers can use to justify their online activities compared to other companies or to industry norms.
companies, show wide divergence in the number of people online and the growth of the online population. In fact, when I wrote the first edition of Online Marketing Handbook, every resource I checked, including unbiased journalists, said the Internet had a population of 30 million and was growing like a hockey stick, with one million new users coming aboard every month! At that rate there should be 48 million people online by the time this book hits the stands in January 1998. However, statistics released by several companies in the first quarter of 1996 show about 10 million people online, while another study says 18 million. A professional marketer would immediately question the validity of all these numbers and wonder if anyone really knows the size of the online audience. The answer is: No one knows.
plans, I hope it pushes online providers to create definable, measurable, realistic numbers. I hope we see an end to the hype and hysteria that marked the first three phases of Internet marketing. I know this must happen or corporate America will not continue its massive investment in materials and resources to profit on the Internet because the era of the professional Internet marketing manager has arrived.
The need to integrate online services into the marketing mix is important for companies that need to expand their sales base by building brand identity and awareness of the online world. The online program must tie into the goals of the traditional marketing program, not go off on its own tangent. Building brand identity is important for companies as the race to stake out claims in cyberspace becomes increasingly important because mass market consumers going online will look for familiar names. The online world offers many tools that can build relationships with these consumers, as the rest of this book will show.