Effective online marketing—the key to e-commerce success

Effective online marketing—the key to e-commerce success

Online marketing

The Internet can be a very powerful marketing tool for companies that know how to exploit its potential effectively. The World Wide Web provides global reach for marketers and offers a variety of options for promoting a business, from the standard web site to online advertisements and sales. In addition, the Web offers companies the ability to target specific markets and personalize their marketing messages based on the needs of distinct customers. With such benefits, it's not surprising that online marketing is predicted to grow rapidly over the next few years. Indeed, according to Forrester Research, business marketers will move as much as 10 percent of their marketing spending to the Web by 2004, which will translate to $8.7 billion in business ad revenue.

The web site as marketing tool

Visitors to a company web site should be able to obtain information quickly and easily

A major tool of online marketing is the web site. A well-designed web site should be rich in content, providing consumers with all the information they require about a company's products or services. In addition, visitors to a company web site should be able to obtain information quickly and easily. This means that a site should be fast to download. Delays in a site downloading are usually caused by large graphic file size—complex corporate logos, multiple icons, and fancy backgrounds all have the effect of slowing down a site's performance. This can be a major source of frustration for a site's users and certainly does not create a positive public image for a company.

Ease of navigation is another important component of effective web design. A well-designed web site will enable visitors to find their way around with ease in order to locate the information and services they require. Even if a site offers the best products at the best prices, it will fail to attract and retain customers if not equipped with an effective and intuitive navigational interface.

With a well-designed web site, a company's marketers can target specific customers. Customer information, such as past purchases and product preferences, can be obtained from registration or order forms on a company web site. Such information can also be obtained by using tracking software, which can record important data about customers, such as what products they buy, which web pages they visit, and how long they spend there. The company can then use this data to customize its web pages to suit individual consumers. This ability to provide personalized, one-to-one contact with customers is the greatest marketing strength of the Internet.

Search engines and directories

Search engines allow users to search for sites using keywords or phrases

An effective way for a company to reach its target audience is to get its web site listed on a search engine or directory. Search engines, such as Yahoo!, Google, and AltaVista, allow users to search for sites using keywords or phrases. Directories organize information about sites into hierarchical lists, with an overall topic and layers of subtopics. Some search engines allow companies to license keywords that link directly to their web site, thereby increasing traffic to the site.

Advertising online

Once a company has established an online presence for itself, it needs to advertise itself on the Web. In general, Internet advertising is either multimedia-based or text-based. Multimedia-based advertising uses interactive methods, such as banner advertisements, to target customers, while text-based advertising uses such text-oriented media as e-mail to target customers.

Banner ads

A company pays for the amount of time its banner ad is seen on a site

Banner ads are the most prevalent form of advertising on the Web. Essentially, banner ads are rectangular advertisements that run on the top or bottom of web pages with the aim of promoting and linking to a particular web site. In general, banner-ad placement is priced in views, which means that a company pays for the amount of time its banner ad is seen on a site. However, there is no guarantee that simply seeing a banner ad will prompt a user to click through to the site being advertised. This has led many people to question the effectiveness of this type of online advertising.

Companies can increase the number of click-throughs on their banner ads by placing the ads on sites visited by people interested in the products or services being advertised. For example, a banner ad can be placed on a specific site or on a search engine, such as Yahoo!, which will show the ad when a surfer carries out a search using specific keywords. A company can also increase the effectiveness of its banner ads by joining a web ring, which is a community of sites that relate to a specific interest. Each site in the web ring agrees to place banner ads for the other sites, thereby increasing traffic to those sites. However, web rings tend to be casual affairs and are not particularly popular among commercial web sites.

E-mail

A form of web-based advertising that is increasing in popularity and prevalence is e-mail. In fact, some reports maintain that e-mail marketing will overtake banner ads as the high-growth online advertising medium. According to Forrester Research, for example, by 2004, marketers will send almost 210 billion e-mails per year at a cost of $4.8 billion. This is largely due to the fact that e-mail is a less costly and more targeted way of reaching customers than banner ads-rather than running a banner ad that everyone sees, marketers can target e-mails to specific customers who are interested in what they are selling.

Marketers can develop their own lists from customer information gathered on the company web site

In order to use e-mail effectively as a marketing tool, marketers require an e-mail list of potential customers. This kind of list can be obtained from an e-mail service provider, such as YesMail.com or NetCreations.com, which store lists of customers who have agreed to receive e-mail about certain products and services. Alternatively, marketers can develop their own lists from customer information gathered on the company web site. It is important for marketers to ensure that any customers they e-mail have actually agreed to be e-mail recipients. Unsolicited e-mail, or spam, constitutes an invasion of privacy and is a major source of irritation for many customers.

Used properly, however, e-mail can help marketers to keep customers informed about new product developments, news, and customer events; to provide a follow-up to customer queries or orders; and to carry out customer surveys.

Online marketing—the challenges

That negative publicity about a company can spread faster than ever before

Marketing online presents companies with some challenges. Although a company can promote itself with ease on the Web, so can its competitors. In addition, the Web makes it a lot easier for consumers to compare competing companies side by side. Consumers can also use the Web to voice their grievances about a company's products or services. Internet-enabled media, such as e-mail and chat, provides consumers with a new, global forum for their opinions. This means that negative publicity about a company can spread faster than ever before. However, if a company takes care of its customers and provides good products and services, positive feedback should outweigh negative comments.

Despite the challenges it presents, the Internet is emerging as a major marketing tool. Indeed, with consumer online e-commerce sales projected to grow to $108 billion by 2003 and business e-commerce sales expected to reach $1.3 trillion in the same period, online marketing is set to become an important component of the business strategy of most companies.