Net Effects

Jun 01, 2001 9:30 PM  By

Online contents, sweepstakes, and real-time instant-win games will attract customers by appealing to the ‘what’s in it for me’ mentality

It’s easy to be skeptical about the future of online marketing, considering that just 18 months ago, pundits were predicting an endless Internet boom rather than the ongoing dot-com shakeout. But rather than get caught up in the doom and gloom pervading the Internet economy, marketers should proceed with cautious optimism in embracing emerging online technologies and trends.

At the same time, you don’t want to dismiss the relevence of current tactics and tools to your future business. Keep in mind the childhood saying “Make new friends, but keep the old. One is silver, and the other’s gold.”

That said, let’s look at the tools and techniques that will define — or continue to define — online marketing:

  • Banner and interstitial ads Many Web users view them as an annoyance or an interruption. Nonetheless, it’s unlikely that the banner ad (a long rectangular ad that typically measures 468 pixels by 60 pixels and appears at the top of a screen) and its cousins — buttons (smaller ads, measuring 60-90 pixels by 120 pixels), badges (square button ads), pop-up interstitials (mini-windows), and even the newly defined “skyscraper ads” (large ads, measuring 120 to 160 pixels by 600 pixels) — will be going away anytime soon. In fact, in February the Internet Advertising Bureau came out with the above specifications to try to standardize graphic advertisements — as sure a sign as any that the ads are here to stay.

    True, the click-through rate of banner ads has declined from an initial rate of 5%-10% to a current rate of 0.25%-0.5%. But this click-through rate is unlikely to get any lower. Besides, online ads have become an important component of branding campaigns — and click-through rates can’t measure improved brand awareness.

  • Pay-per-performance campaigns Traditionally, advertisers have paid a flat rate based on how many viewers see the ad. But more and more often, advertisers will compensate for online ad performance — paying a fee every time someone clicks on an ad or makes a purchase. Whether based on sales alone (cost per action) or leads (cost per click), these types of ad campaigns will become the norm. Peter Zophy, vice president of e-commerce for Hampstead, MD-based men’s clothier Jos. A. Bank, predicts that “even large portals will eventually have to agree to performance-based ad programs.”

  • Contextual advertising “Content and commerce are going to move closer together,” says Lee Frederiksen, founder/CEO of Falls Church, VA-based The Frederiksen Group, an electronic direct response consultancy. Contextual ads are positioned next to related content on a Website or in e-newsletters. For example, the marketer of a child safety seat might request that its ad be placed next to an online article about child safety in automobiles. This is the same rationale behind the technology that enables marketers to place relevant ads on the results pages of keyword searches (for example, when a consumer searches for “bicycles,” an ad for a bicycle manufacturer may appear on the page along with the search results).

  • Geo-targeted advertising Online geo-targeted ad campaigns, which allow advertisers to home in on viewers in a specific geographical area, are finally possible. For example, a cataloger of plants and seeds specifically for warm-weather regions wouldn’t want to advertise above the Mason-Dixon Line — and now it may not have to. Most of the major online ad networks are at least getting their feet wet by providing localized ad-buying capabilities. Geo-targeted advertising, which can also be used with e-mail campaigns, offers the side benefit of providing regional legal compliance — particularly important considering that states’ laws regarding unsolicited e-mail vary.

  • Partnering and cobranding Strategic partnerships — the pairing of two companies offering complementary products and services — can help marketers save money, increase visibility, and identify hot prospects. For example, eBags.com, an online marketer of luggage and handbags, has enlisted a travel agents’ association as a partner. EBags pays agents a commission for each new customer they refer. So now the marketer has a nationwide sales rep organization funneling it solid leads with virtually no up-front costs.

  • Co-registration When it comes to obtaining leads, new subscribers, or e-mail addresses, co-registration — in which companies share the names of customers who opt in to receive e-mail offers and newsletters — is hot and will only get hotter. There are many variations on the co-registration theme. For example, one-shot multiple newsletter registration sites such as TipWorld.com enable the consumer to sign up for a variety of newsletters by inputting his name just once. In another variation, a visitor to an e-commerce site, upon requesting to receive the marketer’s newsletter, may be offered the opportunity to receive e-mails from the site’s marketing partners as well.

  • Online promotions Contests, sweepstakes, and real-time instant-win games will attract customers by appealing to the “what’s in it for me” mentality. Using such promotions judiciously — for instance, entering the names of all site visitors who opt in to receive e-mails into a drawing for a $100 gift certificate — can help you build a permission-based e-mail list.

  • Real-time personalization To anticipate customer needs and suggest appropriate solutions, a company must understand the customer on the individual level. You can do this with real-time personalization, in which a marketer establishes and analyzes a customer’s needs as the consumer is interacting with a site. The result is that the consumer receives the most-relevant products or services at that moment in time. For example, if a customer is buying a shirt on your site, click-stream analysis and personalization tools can enable your site to generate pop-up windows suggesting coordinating pants.

    But for online personalization techniques to work, you need to earn consumers’ trust and reassure them that not only will you not share their data but also that you will protect the data. The recent rash of credit-card security systems being hacked is a good example of how to lose a customer — fast — if you don’t properly handle a situation.

  • Rich-media e-mail Now that e-mail is as much part of everyday life as snail mail, we’re going to see more bells and whistles attached to it. Marketers will use capabilities such as instantaneous chatlike dialogue, one-click e-mail ordering, and lots of rich content to attract and interact with recipients. Some e-mail services providers even predict the emergence of embedded interactivity such as forms and surveys that won’t require a click-through.

  • Mobile commerce Wireless technology is touted as the next big channel for sales. Amir Hudda, president/CEO of Arlington, VA-based mobile applications company Emtera, says that buyers can use mobile technology, “to obtain store, company, or product information, in-store shopping tools like wish lists and gift registries, buyer reviews, and care instructions. They can even use it to conduct instantaneous research and request feedback.”

Already, marketers such as general merchandiser Amazon.com and chocolatier Godiva are beginning to use m-commerce. For example, an Amazon.com customer can now access the online marketer by cell phone or PDA, sign on using her account ID, and search for products. Once she is ready to make a purchase she can just click a button. Her credit card will automatically be billed, and the package will automatically be sent to her address, which Amazon already has on file.


Hollis Thomases is the president of WebAdvantage.net , an Aberdeen, MD-based online marketing, promotions, and public relations firm.