What next for online marketing?

Marketers need to pay attention to strategic planning, experiment with new media, leverage technology investment and measure ROI,...

Marketers need to pay attention to strategic planning, experiment with new media, leverage technology investment and measure ROI, says Paul Griffith

Last month's edition of E-Business Review looked at some of the key findings of E-Marketing's recent benchmarking survey of online marketing in the UK, Online Marketing: Time to Unlock the Opportunity. This article will explore in more detail the strategic implications for the future, both for marketing specialists and e-business as a whole.

The first thing to take on board is that online marketing is here to stay because it's highly effective for building brands, creating customer relationships and generating revenue. Online marketing budgets are set to increase by an average of 63%, marketing directors will be hiring more in-house staff for online projects and they will be spending more on external consultancies. And the research, combined with our experience with clients, suggests that the number of companies undertaking online marketing for the first time will continue to grow rapidly in 2001.

Online tactics

One of the most important implications is that as online marketing assumes greater strategic importance it will become more fully integrated into the marketing mix. In the past, there hasn't been enough thought paid to strategic planning.

That will change as marketers realise how much more effective online techniques can be as part of a co-ordinated strategy that manages branding, messaging and special offers across every element of the mix. And this means that we will begin to see improved planning and control, not just between online and offline media, but also across the increasing variety of online channels.

Another important new trend is the willingness of marketers to experiment and the need to develop online strategies that work across more platforms than just the Internet. Innovative, successful marketers are establishing a two-way dialogue with consumers via email, wireless application protocol (the technology that enables wireless devices to access the Internet), text messaging, interactive TV and kiosks, as well as the Web itself. This will not only require a new level of content and branding management, it requires marketers to have a comprehensive understanding of the opportunities and limitations of each of these new channels.

The need to understand technology implications will place other new demands on marketers. Around 80% of respondents to our survey don't have the right technology for effective online marketing in place at present and the majority plan to invest significant sums to support their online marketing strategy over the coming months. The key questions here have to be whether they will make the right choice of technology solution and whether they will have the expertise to extract real value from their investments.

Technology has a vital role to play in many aspects of online marketing. In particular, it has the potential to deliver the 'holy grail' of the discipline - one-to-one marketing. With the right technology and expertise, an organisation can profile its customers, establish a two-way dialogue and adapt offers to them on an individual basis, thereby winning their long-term loyalty (and significant amounts of their cash).

A growing number of companies are already investing large amounts in complex data mining facilities, email engines and e-customer relationship management software. This investment has the potential to realise amazing results, but our experience, and that of organisations in the US, suggests that most marketing teams just don't have the skills and know-how to make the technology deliver. The answer isn't rocket science but it will require new expertise as well as significant cultural and organisational change, particularly for large organisations. In particular, companies have to re-assess how they handle and integrate their marketing, call centre, logistics, accounting and IT functions to create a new customer-centred focus that generates value from technology investment.

Investment

And what of the strategic options for companies that don't have upwards of £500,000 to invest on e-CRM technology? Our experience suggests that you can achieve results with significantly lower investment if you act smartly and develop a dialogue around consumer preferences for both information and purchasing. For example, it may be possible to use your database or CRM technology, combined with a limited investment in data analysis and email technology, to carry out simple customer analysis, market segmentation and tailoring offers to groups with common characteristics. It may not yet be full one-to-one marketing, but it still generates higher results than the blanket messaging approach, and not enough companies are making the most of these opportunities.

The final and most important strategic trend has to be an increasing emphasis on measuring return on investment in online marketing. We're already seeing this happen and, as I mentioned in last month's article, the technology makes it relatively easy to do. As the focus on tangible results increases throughout the e-business world, marketers have their part to play in demonstrating that online business really can reduce costs, increase sales and, above all, generate profit.

Paul Griffith is chief executive of e-business consultancy E-Marketing


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