Make the most of web marketing

Internet marketing is no longer the domain of upstarts and envelope-pushers. Today, it's a mainstream corporate initiative, and as such it's gotten more complex—and more difficult to be heard above the noise. And it's only going to get tougher to make an impression: Last year, Internet companies accounted for 69 percent of digital marketing, but Forrester Research predicts that by 2005 it will be traditional advertisers who dominate online marketing, accounting for 84 percent.

YES

Gone are the days of slapping up a few Web banner ads, or sending out blind batches of mass e-mail. These Net marketing ploys have lost their punch: Click-through rates for banner ads hover around 0.4 percent, and a glut of commercial e-mail clogs customer in-boxes.

To stay ahead of the curve, businesses are embracing a new crop of innovative technologies: market-optimization software that helps you make more informed decisions, wireless campaigns that transmit your message to handheld devices and cell phones, and e-mail messages that actually let customers complete a transaction without going online.

With the help of new software, marketers can target specific potential consumers more accurately than ever. Lee Cooper, a business professor at UCLA's Anderson School of Business, believes this technology-enabled marketing optimization is the most important trend in marketing. Several companies, such as Strategic Data Corporation, Net Perceptions, and Marketswitch, are perfecting such software. The applications use analytical models to provide real-time decision-making for Web-based marketing campaigns, such as e-mail and banner ad programs. In simple terms, Cooper says, "Think of these companies as automating the process of making marketing recommendations."

Other industries, including airlines, have used optimization technology for years, but marketers have only recently caught on. The software uses a mathematical formula to consider several variables that determine the effectiveness of a particular marketing strategy. For example, Marketswitch's optimization software, called True Suite, is designed to pinpoint the best marketing strategy—including what customers to target—as fast as possible. The program can even take into account business constraints, such as what inventory is in stock.

Savvy marketers are beginning to experiment with wireless technology too. Although tiny wireless devices like cell phones, pagers, and handheld PCs can't convey as much detail as a desktop PC, they can still be effective. With these devices, it's essential to grab the potential customer's attention quickly. "In wireless, you probably have only one chance to make an offer to a potential customer. You had better use technological levers to maximize your chance of success," says UCLA's Cooper.

Advertising.com is a leader in the emerging wireless advertising field. Its service for handheld devices offers pricing based on cost per acquisition (CPA), so advertisers pay only for the customers that purchase a service.

Camino Real, a luxury hotel chain with 16 hotels scattered throughout Mexico, went to Advertising.com with the goal of increasing the number of U.S. travelers visiting its upscale resorts. Through Advertising.com, the hotel purchased 2,000 clicks on AvantGo's Travel Channel (AvantGo is an Advertising.com partner). Here was precisely the type of audience Camino Real wanted to target: young professionals with an average income higher than $100,000. When an AvantGo user browsed the Travel Channel's News section on a handheld PC, a Camino Real advertisement appeared. Clicking on the advertisement took that person to an offer for two free nights at the hotel chain.

Of the 2,000 clicks Camino Real purchased, 14 percent provided potential customers' e-mail addresses. Advertising.com sent additional information about Camino Real to these people via e-mail.

E-mail has long been a staple of Internet marketing, but with the volume of permission-based commercial e-mail expected to rise to some 226 billion messages by 2003, according to eMarketer, new ways of using it are in order. Enter so-called transactive e-mail. Because it does not require users to visit a Web site, customers can more quickly and easily complete transactions.Radical Communication has developed this new twist on e-mail marketing with its RadicalMail product.

HTML-based messages let a customer make a purchase directly within an e-mail message by simply entering his credit card information. The transaction is as secure as one completed on a Web site, since it uses Secure Sockets Layer, or SSL, encryption. Even better, the customer can forward the message to friends.

Zagat.com, a publisher of restaurant guides, chose this new technology for its holiday promotion last year. Working with RadicalMail, Bigfoot Interactive used transactive e-mail featuring slick graphics to offer 40 percent off the publisher's ZagatPacks, bundled packs of Zagat guides and maps to multiple cities. The promotion also encouraged recipients to forward the message to three friends. Zagat's conversion rate for this program was five times higher than usual.

Kate Leahy, director of marketing at Bigfoot, says the campaign was successful, but points out a drawback of this method: "Transactive e-mails are cutting-edge. Some customers might not be comfortable with the new technology." But she thinks conversion rates will rise as buyers accept that the method is as secure, and data as private, as it is over the Web.

Get consent.
Make sure any marketing campaigns you undertake are permission-based and targeted with explicit instructions for unsubscribing. Take your campaigns wireless. Go after customers who aren't tethered to PCs. But use wireless where it makes sense—such as when you're targeting business travelers.

Enhance your e-mail initiatives.
Drab text-based e-mails often go ignored. Try HTML-based e-mail or transactive e-mail with eye-catching graphics or streaming media that help your message stand out.

Establish partnerships.
Look at co-branding to supplement your marketing strategy—or as a stand-alone alternative.

Try new channels.
Integrate more than one marketing tool into your overall strategy. Rather than focusing solely on the Web, try a wireless campaign. Or combine your e-mail strategy with co-branding.

Not every company has tens of thousands—let alone millions—of dollars to devote to online marketing strategies. Fortunately, there are still affordable ways to use the Web. LatPro.com, a growing 12-person company based outside Fort Lauderdale, Florida, that used to outsource its marketing needs, now manages them in-house. The company relies predominately on co-branding with related Web businesses.

Founded in April 1997 as an online career center for Spanish and Portuguese-speaking professionals, LatPro initially pursued a co-branding strategy at the suggestion of Terra Networks, a site geared toward the Latin American and U.S. Hispanic market that wanted to include job listings.

LatPro embeds its content on other sites where visitors are likely to be interested in its services. Dan Canning, LatPro's marketing director, says his company has broadened its distribution by putting LatPro's content on high-traffic sites. As of January, LatPro had partnered with nearly 40 sites. According to Canning, co-branded sites currently deliver about 30 percent of LatPro's total site traffic. Over the past five months, LatPro has generated 8,500 new registrations.

And LatPro's savings on marketing are impressive. Canning estimates that to achieve an equivalent amount of traffic, registration, and sales to the co-branding program, LatPro would have to spend $8,000 to $10,000 per month on traditional advertising, such as targeted business publications, or $7,000 to $8,000 per month on a Web affiliate program. Instead, the co-branding program costs only $1,000 a month—and most of that is salary expense for the program's part-time manager.

Siebel Systems Interactive Selling Suite
This suite of guided selling tools lets your customers explain their needs and configure a solution. The tools can make recommendations, calculate prices, and take orders. Engage AdManager AdManager offers targeted campaigns across multiple media types, such as banners, streaming media, wireless text, wireless audio, and even offline devices, including kiosks, gas pumps, and ATMs.

EyeWonder Eyeris
This streaming-media banner ad incorporates both video and audio. Eyeris ads can be delivered instantly to any Java-enabled browser, regardless of connection speed.

Lightningcast
Lets you insert audio ads into radio streams delivered through the Internet. Targets commercials to listeners based on several variables, including personal interests, gender, and age.

Advertising.com AdLearn
Calculates the performance of advertising creative, placement, and site performance so that an ad campaign can be automatically adjusted in real-time to generate optimum performance for the advertiser.