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The Internet as a Marketing Medium

(originally published by Booz & Company)
The Internet offers a startling set of advantages as a marketing medium. Technology advances, consumer familiarity and vendor innovation will inevitably drive both marketing programs and customer interaction to center on the Internet. Marketers need to begin now an active exploration of their key initiatives in light of where and how to apply the Internet's power.

The Internet is already an important, and perhaps transformational, marketing medium for business-to-business and business-to-consumer markets. Executives and entrepreneurs must understand how and why this is so by answering these questions:  

  • How does the Web compare to traditional marketing vehicles?

  • What relationship will emerge between the Web as marketing medium and traditional vehicles?

  • How will advances in technology and increased usage affect the Internet's capability for marketing?

There are criteria that characterize the applicability and power of any marketing medium, whether we define marketing abstractly as the "conception, creation and sustenance" of customers, or more pragmatically as a "purposeful system of activities intended to promote the market exchange of goods or services."


The marketer's first task is to communicate key messages to the full set of targeted prospects, customers and influencers. As a medium, the Web has quickly achieved very broad reach, and will soon pass broadcast and cable television as the medium with the broadest consistent reach.


For optimal results, the marketer wants to be able to select the precise group with whom to communicate. Both the Web and the closely associated technology of e-mail will eventually provide extraordinary ability to target in both business-to-business and business-to-customer markets. Already the Internet provides more ability to target than many media, such as broadcast, cable or print; only direct mail, telemarketing and direct sales provide more.

Three likely changes could make the Internet the medium with the greatest ability to target. Societal norms for acceptable privacy policy will develop as consumers demonstrate by their actions which targeting information and techniques they see as "net positive." Databases of Internet users' demographic, psychographic, purchase, "anonymous profile" and other behavioral information will grow and be augmented with the enormous existing information available in the non-digital domain. Interactive profiling and mass customization technologies will mature from their currently raw state to deliver consumer experiences that will seem more personal than most other marketing media or sales contacts.


The ideal marketing medium allows the targeted prospects or customers to talk back right now - to identify themselves, to declare interest and readiness to purchase and even to criticize or complain. Internet and e-mail offer outstanding interactivity, comparable to direct sales at a fraction of the cost per contact. Today only telesales can compete. It is likely that increased ease of use and consumer familiarity will make the Internet the most interactive of marketing media.


Marketing media have traditionally served only one or two steps of the Awareness-Interest-Desire-Action cycle (A.I.D.A.). For example, advertising can lead a consumer to action, but cannot generally consummate it. Many marketers believe that this inability to span the complete A.I.D.A. cycle is the major cause of "wasted" marketing effort. Consumers who have been motivated to continue in the purchase process are "lost" when they fail to navigate to the next step, which requires engagement in a new medium ("pick up your phone now and call").

The Internet offers unique power here. A customer can move easily from initial awareness through purchase. Only the beer vendor at the ballpark has as powerful an ability to raise awareness and execute the sale in one fluid motion!

Maintaining an accessible recollection of these interactions actually allows an exchange between the user and a Web site to continue for some time, spanning the time delays of the physical world. For example, the Amazon site has a better ability to pick up a "conversation" about a problem with the book ordered last week than do most humans working at a chain bookstore.


Ideally, the marketing process should function as a learning system. Database marketers, for example, have made a science of the "closed loop," in which programs are conceived and executed against a database that has been segmented using analytical profiling and predictive applications. The database and even the applications are then updated to reflect the actual performance of the particular marketing program.

Today, only the expensive direct marketing methods - direct mail, telesales and direct sales - can serve easily as a foundation for quantitative marketing learning. Measuring traditional advertising and public relations, for example, relies on subjective assessment and sampling techniques such as Nielsen ratings, which are both expensive and of doubtful usefulness in the smaller segments that characterize so many markets.

In contrast, the Internet already enables unprecedented learning in its ability to capture site navigation information; information retrieval and purchase behavior, and user-supplied preference and profiling information. It is also proving to be an excellent vehicle for conventional market and customer research.


Responsiveness to marketing messages is closely correlated with the "freshness" and applicability of the information conveyed to the recipient. While direct sales and telesales offer the ability to present a timely message, the Internet is vastly superior to all other media in the capacity to deliver messages that are not only timely, but immediately relevant to the recently displayed interests or actions of the customer.


Seth Godin, founder of Yoyodyne and author of marketing books, argues persuasively that the volume of marketing information aimed at customers has necessitated that we no longer market "to" the customer; instead, we need to market "with" the customer. Practically, this means seeking the customer's permission to begin and then continue a dialogue that will extend beyond one sales transaction.

While direct sales and telesales provide these options, the Internet enables the "permission" decision to be made at lower cost to the vendor and with less inconvenience to the customer.


The Internet has a unique ability to function as a platform or vehicle for a variety of program types. Using the Web and e-mail, we can run awareness advertising, send targeted mail, fulfill collateral requests, conduct a seminar, drive a public relations campaign and offer a premium for an immediate action.


The Internet has another unique ability: to provide virtually unlimited information to the seriously interested user, without cluttering simpler messages to a wider audience. The end user can easily navigate his or her way to more and more detailed information and toward a closer relationship with the supplier. It is as though an advertiser could enable a print reader to touch the page of a wordless "branding" ad and instantly receive a mail packet of the appropriate product brochures, specifications, competitive comparisons and local dealer contact.

But the Internet has weak points as well that must be considered.


It sometimes takes sizzle to engage a sated consumer, and that can mean high-quality graphics, motion and sound. The weaknesses of the personal computer as a multimedia vehicle, combined with inadequate access bandwidth, mean that the production values achievable in Web marketing lag other media significantly. While broadband access, PC improvements, and Internet appliances will inevitably address this issue, it will be at least three years before a mass market emerges that can experience TV- or magazine-quality communications over the Web with reasonable performance.


While an Internet "opt-in" session can be wonderfully compelling for vendor and customer alike, Internet broadcast vehicles - principally conventional banner ads - are far weaker than broadcast advertising in commanding the prospect's attention. It is more difficult to tune out a well- executed TV or radio spot than to ignore a good banner ad.


While the Internet offers great capability for the marketer to be responsive during a customer interaction, it also puts new control of the experience into the hands of the customer.

Traditionally, marketing operated under the assumption that the prospect could be led through a progressive process of information disclosure and purchase commitment. On the Web, this illusion is destroyed - the customer is in control. He or she can dig deeper, or leap to a competitor's site, in a single click.

Thus, we must design our marketing communications for access under customer control. More importantly, a new urgency is created - at every moment, the prospect is free to abandon the process. For example, the inconvenience associated with walking out of a store at the moment of purchase, "upsetting" the sales clerk, is completely absent.


Clearly, the strengths of the Internet as a marketing medium far outweigh the negatives. Companies grappling with the issue of whether to market via the Internet are already behind. Companies attempting to build a coherent Internet marketing strategy must begin to believe that the Web is likely to be the center of their marketing future, not simply an adjunct to traditional marketing methods.

Reprint No. 99401

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