iMarketing - changing trends

The incredible thing about the web is that it is evolving so rapidly. The growth rate of Internet technologies has reached an unprecedented level. It is estimated that the number of web users will grow from 125 million today to more than 1 billion by the year 2005. Not surprisingly, new devices for connecting to the Internet are sprouting up like weeds. Technologies for shaping the user experience are being developed just as quickly -- both on the client-side and enterprise-side of the computing transaction.

Capitalizing on the new marketing and media landscape is a business critical issue for companies large and small, new and old. Given the rate of change, it makes sense to restrict the timeframe used for analysis marketing investments and e-commerce trends. Trends on the web are being shaped quarter-to-quarter. It is, therefore, risky to use outdated market data as a baseline for determining future marketing strategies. From a strategic marketing perspective, latest information is best.

Let's take a look at some interesting imarketing trends:

"Hybrid marketing", involving integration of traditional offline broadcast media and online advertising represents a popular strategy among the dot coms.

According to data compiled by Competitive Media Reporting (CMR), the three industries topping the list for spending in traditional broadcast advertising media (television, radio and print, etc.) includes: financial services (specifically online brokers), e-tailers and Internet media companies.

New growth companies are investing in brand awareness advertising in conjunction with the launch of new Internet sites and online products. This is a strategy straight from the Marketing 101 textbook: 'Gain share of mind and you will gain share of market'. Brand awareness messages are more prevalent than product differentiation messages. However, some companies are focusing on obvious differences between the new Internet experience and the old unreliable sales and distribution channels involving intermediaries (e.g. agents and brokers). While the broadcast advertising medium is somewhat weak from a targeting perspective, it is an effective "push media".

First movers are getting the first shot at making first impressions. Leading Internet companies are employing state-of-the-art e-commerce technologies and strategies. With every interaction and every transaction, customers are leaving something of themselves behind, which then enables these companies to serve them even better the next time.

It is clear that companies staking out the high ground are doing more than generating brand awareness and one-time transactions. Fostering customer loyalty is the end game.

It is significantly less expensive to re-sell, up-sell or cross-sell an existing customer than to acquire new customers. Marketing 101 once again! Over the next several years, customer loyalty, fostered by effective e-commerce strategies and technologies, will serve as a tremendous competitive advantage and barrier to entry into a market space where few sustainable technology advantages and barriers exist. Further, repeat customers act as a multiplier, increasing the return on investment for advertising expenditures.

For "old growth" companies, brand loyalty is at risk. Advertising is being used to encourage the public to explore newer and better shopping and product options. In doing so, they are actively re-evaluating relationships with familiar brands.

Jupiter Communications, a leading Internet research firm, has forecasted a major shift in the banking industry comparable to the shift-taking place in the brokerage industry. The number of online banking households will increase from less than 10 million in 1999 to over 26 million in 2003. In the bygone years of the banking industry, relationships were based almost exclusively on geography. The introduction of ATMs changed all that. The Internet is changing it yet again

It is not likely that new competitors will seek to win a ground war for customers by opening brick and mortar branches. Competition will be an air war and the Internet will be the channel of choice, offering greater reach and consistent delivery of a broader range of financial products.

With few exceptions, banks have not been recognized as being marketing savvy. And yet, they have been successful at cultivating a solid customer franchise. Given the dynamic shifts in the financial services marketplace, it is doubtful that leading banks can afford to remain on the sidelines for much longer.

Online advertising is a different "beast". It is a critical part of the integrated marketing mix.
Return on investment for traditional offline and emerging online advertising share common factors, principally cost per impression among targeted customers (i.e. advertising efficiency). For companies that live and die on the web, online impressions are more valuable than offline impressions. Obviously, these customers are Internet enabled-whether it is from home or the office.

Online companies, or at least the ones that are going to flourish, are prepared to close the loop with the customer. They can turn awareness into interaction and then into transactions at the click of a button.

As we develop marketing strategies for the future, it will be important to select the right data to serve as the foundation of strategy. It will be critically important to: Concentrate on fresh data-more recent statistical/market data should be weighted more heavily; rely on credible sources-the more independent the better; strategize and then synergize-the field of dreams approach to marketing.

Clearly, the Internet is prompting a shift in shopping preferences and buying patterns. Product pricing is coming under pressure due to increased competition, elimination of intermediaries and middlemen and the introduction of self-service models. Internet companies, with their virtual inventories, revolutionary distribution and service strategies, can offer cheaper goods.

And if, as some experts have suggested the Internet subsumes as little as 15% products and service sales over the next few years, the landscape of brick and mortar businesses is going to be very, very different. So buckle up, keep your eye on the road and be prepared to change directions.