Wednesday, September 2, 2009

Internet Marketing

We are off to a good start in Internet Marketing. We distinguished between Internet Marketing, which is using the internet to facilitate the marketing process, and true interactivity, addressing the customer, remembering what they said, and addressing them in a way that is relevant to them. We discussed the relationship between direct and interactive marketing, particularly the use of databases and the ability to measure response. We also looked at the objectives of direct marketing versus interactive marketing and added to acquisition, conversion and retention the creation of value. The idea is to use information about the customer to create relevant offers and bind the customer to the brand. We gave the example of amazon.com and the way the website remembers prior purchases and makes offers that might be of relevance. The internet marketer can use the Internet "I's" to maximize use of this powerful medium (Interactivity, Immediacy, Involvement and Information-Intensiveness). If marketers keep these unique characteristics in mind, as well as the internet's roots in direct marketing, they will be able to leverage the medium to its best advantage.

We also talked about the history of the internet and the three trends that enable interactive marketing: Communication, technology and distribution. The internet originally was developed for government, particularly defense, applications. Since the creation of early commercial web browsers, such as MOSAIC, the opening up of the internet to commerical applications. Since then, the web as a marketing medium has exploded. Internet technology has been adapted faster than any other type of technology, taking just 7-8 years to be adopted by 30% of households.

I said that I have been teaching about the evolution from mass to direct to interactive communications for ten years, but this year I added another form of communication, collaborative communication. Web 2.0 means the many-to-many versus one-to-many communications that involve customers sharing information and opinion about brands and creating their own products and applications for products. We also discussed Moore's Law about computer power increasing and the cost decreasing, Metcalf's Law about the power of networks and the concept of the "Long Tail" in marketing, selling many products to the same person and not focusing on making money through mass marketing.

We will finish up this week talking about the value chain and positioning web sites.
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