I

4. Profile, measure and improve

Figure 1.9 A generic Internet marketing strategy development process

How do Internet marketing communications differ from traditional marketing communications?

Internet marketing differs significantly from conventional marketing communications because of the digital medium used for communications. The Internet and other digital media such as digital television and mobile phones enable new forms of interaction and new models for information exchange. A useful summary of the differences between these new media and traditional media has been developed by McDonald and Wilson (1999) - they describe the '6 Is of the e-marketing mix'. Note that these can be used as a strategic analysis tool, but they are not used in this context here. The six Is are useful since they highlight factors that apply to practical aspects of Internet marketing such as personalisation, direct response and marketing research, but also strategic issues of industry restructuring and integrated channel communications.

1 Interactivity

John Deighton was one of the first authors to summarise this key characteristic of the Internet. He identified the following characteristics inherent in a digital medium (Deighton, 1996) which are true for much online marketing activity, but not all:

• the customer initiates contact;

• the customer is seeking information (pull);

• it is a high-intensity medium - the marketer will have 100 per cent of the individual's attention when he or she is viewing a web site;

• a company can gather and store the response of the individual;

• individual needs of the customer can be addressed and taken into account in future dialogues.

Figure 1.10(a) shows how traditional media are predominantly push media where the marketing message is broadcast from company to customer and other stakeholders. During this process, there is limited interaction with the customer, although interaction is encouraged in some cases such as the direct-response advert or mail-order campaign. On the Internet, it is often the customer who initiates contact and is seeking information through researching information on a web site. In other words it is a 'pull' mechanism where it is particularly important to have good visibility in search engines such as Google, Yahoo! and MSN when customers are entering search terms relevant to a company's products or services. Note though, that outbound e-mail marketing and online advertising can be considered as 'push' broadcast techniques. Figure 1.10(b) shows how

Company

Push

Customer

Direct response

Traditional TV, print, radio media Direct mail communications

Interactivity

Dialogue not monologue

Company

Pull/Push

Intelligence

Customer

(b) Two-way feedback

Figure 1.10 Summary of communication models for: (a) traditional media, (b) new media

Podcasts

Individuals and organisations post online media (audio and video] which can be viewed in the appropriate players including the iPod which first sparked the growth in this technique.

Web analytics

Techniques used to assess and improve the contribution of e-marketing to a business, including reviewing traffic volume, referrals, clickstreams, online reach data, customer satisfaction surveys, leads and sales.

Personalisation

Delivering individualised content through web pages or e-mail.

Sense and respond communications

Customer behaviour is monitored at an individual level and the marketer responds with communications tailored to the individual's need.

the Internet should be used to encourage two-way communications, which may be extensions of the direct-response approach. For example, FMCG suppliers such as Nestlé (www.nescafe.co.uk) use their web site as a method of generating interaction by providing incentives such as competitions and sales promotions to encourage the customer to respond with their names, addresses and profile information such as age and sex.

Hoffman and Novak (1997) believe that digital media represent such a shift in the model of communication that it is a new model or paradigm for marketing communications. They suggest that the facilities of the Internet represent a computer-mediated environment in which the interactions are not between the sender and receiver of information, but with the medium itself. They say:

consumers can interact with the medium, firms can provide content to the medium, and in the most radical departure from traditional marketing environments, consumers can provide commercially-oriented content to the media.

It has taken ten years of the growth in use of individual recommendations, auction sites, community sites and more recently blogs and podcasts for the full extent of this shift to become apparent. In 2005, a Business Week cover feature article referred to the 'Power of us' to explain this change and showed that although relatively few consumers are creating blogs (low single-figure percentages), a large proportion of Internet users are accessing them.

2 Intelligence

The Internet can be used as a relatively low-cost method of collecting marketing research, particularly about customer perceptions of products and services. In the competitions referred to above, Nestlé are able to profile their customers' characteristics on the basis of questionnaire response.

A wealth of marketing research information is also available from the web site itself. Marketers use the web analytics approaches described in Chapter 9 to build their knowledge of customer preferences and behaviour according to the types of sites and content which they consume when online. Every time a web site visitor downloads content, this is recorded and analysed as 'site statistics' as described in Chapter 9 in order to build up a picture of how consumers interact with the site.

3 Individualisation

Another important feature of the interactive marketing communications is that they can be tailored to the individual (Figure 1.11(b)) at relatively low costs, unlike in traditional media where the same message tends to be broadcast to everyone (Figure 1.11(a)). Importantly, this individualisation can be based on the intelligence collected about site visitors and then stored in a database and subsequently used to target and personalise communications to customers to achieve relevance in all media. The process of tailoring is also referred to as personalisation - Amazon is the most widely known example where the customer is greeted by name on the web site and receives recommendations on site and in their e-mails based on previous purchases. This ability to deliver 'sense and respond communications' is another key feature of Internet marketing.

Another example of personalisation is that achieved by business-to-business e-tailer RS Components (www.rswww.com). Every customer who accesses their system is profiled according to their area of product interest and information describing their role in the buying unit. When they next visit the site information will be displayed relevant to their product interest, for example office products and promotions if this is what was

Mass customisation selected. This is an example of what is known as mass customisation where generic cus-

Deiivenng customised tomer information is supplied for particular segments, i.e. the information is not unique content to groups of , . , . „ ,. , users through web to individuals, but is relevant to those with a common interest. Personalisation and pages or e-mail. mass customisation concepts are explored further in Chapter 6.

Same message to all customers (or customers in each segment)

Same message to all customers (or customers in each segment)

Customer

Customer

Customer

Different messages to each customer (or customers in micro-segment)

Figure 1.11 Summary of degree of individualisation for: (a) traditional media (same message), (b) new media (unique messages and more information exchange between customers)

Different messages to each customer (or customers in micro-segment)

Customer

Customer

Customer

Figure 1.11 Summary of degree of individualisation for: (a) traditional media (same message), (b) new media (unique messages and more information exchange between customers)

Outbound Internet-based communications

The web site and e-mail marketing are used to send personalised communications to customers.

Inbound Internet-based communications

Customers enquire through web-based form and e-mail.

4 Integration

The Internet provides further scope for integrated marketing communications. Figure 1.12 shows the role of the Internet in multi-channel marketing. When assessing the marketing effectiveness of a web site, the role of the Internet in communicating with customers and other partners can best be considered from two perspectives. First, there is outbound Internet-based communications from organisation to customer. We need to ask how does the Internet complement other channels in communicating the proposition for the company's products and services to new and existing customers with a view to generating new leads and retaining existing customers? Second, inbound Internet-based communications customer to organisation: how can the Internet complement other channels to deliver customer service to these customers? Many companies have now integrated e-mail response and web site callback into their existing call-centre or customer service operation.

Company

Web

E-mail

Phone

Mail

Person

Customer

Figure 1.12 Channel requiring integration as part of integrated e-marketing strategy

Mixed-mode buying

The process by which a customer changes between online and offline channels during the buying process.

Some practical examples of how the Internet can be used as an integrated communications tool as part of supporting a multi-channel customer journey (Figure 1.13) are the following:

• The Internet can be used as a direct-response tool, enabling customers to respond to offers and promotions publicised in other media.

• The web site can have a direct response or callback facility built into it. The Automobile Association has a feature where a customer service representative will contact a customer by phone when the customer fills in their name, phone number and a suitable time to ring.

• The Internet can be used to support the buying decision even if the purchase does not occur via the web site. For example, Dell has a prominent web-specific phone number on their web site that encourages customers to ring a representative in the call centre to place their order. This has the benefits that Dell is less likely to lose the business of customers who are anxious about the security of online ordering and Dell can track sales that result partly from the web site according to the number of callers on this line. Considering how a customer changes from one channel to another during the buying process, this is referred to as mixed-mode buying. It is a key aspect of devising online marketing communications since the customer should be supported in changing from one channel to another.

• Customer information delivered on the web site must be integrated with other databases of customer and order information such as those accessed via staff in the call centre to provide what Seybold (1999) calls a '360 degree view of the customer'.

• The Internet can be used to support customer service. For example easyJet (www.easyjet.com), which receives over half its orders electronically, encourages users to check a list of frequently asked questions (FAQ) compiled from previous customer enquiries before contacting customer support by phone.

Offline

Online

Product evaluation

Decision to purchase

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