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The Marketing Concept | The 4P's on the Web | The Marketing Plan
Marketing Information | Marketing Metrics
Challenges to Effective New Media Marketing
Open Marketing in the New EconomyWeb Marketing Models
B2C Marketing | C2C (aka P2P) Marketing
B2B Marketing | MarketplaceE-Sources Software vendors | Customer Relationship Management
Gonzo Marketing | Case Study: Ad Partners
branding and partnering | advertising and promoting
personalizing and customizing | community building
making Web content accessiblethis page
vocabulary | information as bits
e-commerce | types of marketing webs
background
Content needs to be sold. Whether webs are selling goods, services, or ideas, they're competing for people's attention. In the new information economy, that's more precious than money.
In the lingo of marketing, it's called customer relationship management. In the lingo of the Web, it's called community building.
What works online? So far, if it's faster, easier, and cheaper, it's starting to work. If it's one or two of those, it's not as compelling. If it's none of those, but only "kewl", then it doesn't seem to last very long.
According to common theories about diffusion of innovations, it also helps if the new thing is consistent with existing values and past experiences. That is, it can't be too different. Can it be tried out first? How visible are the results?
These terms are new and changing rapidly. Two years ago, i-business and i-commerce were as common as e-business and e-commerce. Now, I don't hear the i-words at all. But I'm starting to hear the m-words: m-business for mobile business.
It is thus even more important that we share a vocabulary. To communicate effectively about new media marketing, we need to always know the answer to three questions.
Is the product or service we're talking about made of atoms or
bits?
Is delivery
done online or offline?
Is payment
made online or offline?
Any Internet-enabled business process, such as marketing, training, or supply-chain integration. Includes virtual private networks (VPNs) and intranets (LANs behind corporate firewalls using TCP/IP). Does not include legacy proprietary networks such as Lotus Notes and Novell.
Manufacturers
Preach Teamwork
by Chuck Moozakis
InternetWeek, October 26, 2000
DaimlerChrysler Corp. is embarking on a multimillion-dollar
project to bring together design engineers on a Web-based collaborative system
dubbed FastCar that executives say could shave billions of dollars off the cost
of car development over the next few years.
Those savings will primarily come from eliminating miscommunication that
can arise as teams of engineers and designers work to build specific models,
executives say.
Do you see the faster, easier, cheaper?
Internet-enabled transactions, that is, sales of goods and services, and business processes directly supporting sales. Includes advertising, promotion, brand management, customer service, sales force automation, customer relationship management. Includes off-line processes such as print advertisements and 800-numbers directly in support of a Web site where transactions are made. Learn more below.
In retrospect, this is a fascinating article:
Enron
Feels The Power
By Robert Preston And Mike Koller
Internet Week, October 30, 2000
Most e-businesses -- even the visionaries -- tap the
Internet mainly to enhance what they already do. Then there's Enron Corp., a
15-year-old energy company that's seized on the Net to redefine its entire
business and the industries it dares to dominate.
In fact, the Internet is transforming Enron so fast that its executives aren't
quite sure how to describe the company anymore.
Mobile business and mobile commerce, aka wireless.
M- is similar to e- except you'll be connected to the Internet instead of to the wall. Always on. Embedded in devices everywhere. The future.
WalkandSurf's The Case For M-Business
Don't think so? Well, in a "complete reversal" of strategy, Michael Armstrong broke up AT&T in October 2000. Partly, this move will increase short-term shareholder value and partly, it will position some remnant to survive. Why? Because the phone company's century-old business model is built on controlling the wires, both the phone lines and, recently, the cable TV lines. It sets up a separate circuit for every phone call. A wireless (wire-less) packet-switched network makes that obsolete. AT&T's board is smart enough to feel the breeze and indeed, one of the new entities will be AT&T Wireless. Bet on it.
Who else? Check out Developer.com's Wireless/Mobile Development Articles, Tutorials, Discussions, and Other Resources and E-Business Strategies' Mobile Business Portal
According to the U.S. Department of Commerce's definitions of terms used to describe electronic business:
A consumer visits a bookstore and inquires about the availability of an out-of-stock book. A bookstore employee downloads a digital copy of the book and prints it along with cover. Not an e-commerce retail transaction by the consumer since agreement to purchase did not occur over an electronic network. However, the right to access the digital archived copy is an e-commerce service transaction by the employee.
A consumer uses Internet to research the purchase of a computer, but calls a toll free number and places the order with an operator. Not an e-commerce transaction because agreement to transfer ownership did not occur over computer-mediated network; neither telephone was computer-enabled.
The key is "Internet-enabled" or online. If you drive to Circuit City and pay cash for browser software and a modem, is that an e-commerce transaction? What if you did all the research for that purchase decision online?
We've had commerce for tens of thousands of years and computer-aided commerce for the last thirty years. In the mid-eighties, we started seeing network-aided commerce in the form of electronic data interchange (EDI). Now that the Web has reached critical mass, we have indirect commerce (online payment, offline delivery) and full-fledged direct commerce (online payment, online deliver).
Many companies put computers into things and write the software to make the things work. The computer-based high-tech industry has been around since 1950 and especially 1970, when the microchip got small, fast, and cheap enough to fit inside other tools. Many of these processes are now Internet-enabled.
The largest employers are IBM (300,000), Electronic Data Services (120,000), Compaq (85,000), Seagate (82,000), and Intel (70,000).
The infrastructure and service industry provides the plumbing and connectivity for the Info Highway. It's common to date the Internet industry from 1984, when transmission and naming protocols were standardized.
Internet Week's 100 Index divides the industry into five groups, listed here with two examples each of publicly traded companies.
communities: AOL, Lycos
e-bellweathers:
Ingram Micro, Autobytel.com
intelligence:
Jupiter, Scient
platforms: Sun, Oracle
plumbing: Cisco, Qwest
The dot-coms, sometimes called the "pure play" companies, are the obvious part of the Internet economy. We should also include the bricks-and-clicks and keep an eye on the bricks-and-mortars watching on the sidelines. The Internet economy, as opposed to the Internet culture, dates from around 1994, when the U.S. government opened the Internet to commercial development. A more precise beginning might be December 1994, when the relatively easy-to-use first version of the Netscape browser lowered the Geek line sufficiently.
Please note that we are entering only the sixth holiday marketing season because I don't think 1994 is worth counting. Other folks don't start counting until 1998, making 2000 only the third.
Moral of the story: if there indeed is an Internet economy, we don't know very much about it yet.
The University of Texas' Center for Research in Electronic Commerce published The Internet Economy Indicators in 2001. It described the parts of the Internet Economy:
What started out as an
alternative marketing channel has quickly turned into a complete economic system
consisting of:
> ubiquitous, low cost communication networks using Internet technologies and
standards,
> applications and human capital that enable business to be conducted over
this network infrastructure,
> interconnected electronic markets that operate over the network and
applications infrastructure,
> producers and intermediaries providing a variety of digital products and
services to facilitate market efficiency and liquidity, and
> emerging policy and legal frameworks for conducting business over the
Internet. ...
Perhaps more importantly, the potential scope, size and overall economic impact
of this economic system is much larger than what we can comprehend today.
All economies change over time. If you make the appropriate comparison, every economy is new. The question isn't, Do we have a new economy? The question is, In what context do we have a new economy?
The micro-economic impacts are ubiquitous and undeniable. I'm not so sure about any macro-economic utopia of low unemployment, low inflation, high growth, high and rising measured productivity, high and rising corporate profits and soaring stock prices.
The phrase does give us a way to collectively talk about the Internet industry and the Internet economy. A significant tipping point for dating purposes would be 1980. That's when the U.S. information workforce (white-collar office workers) exceeded the production workforce (blue-collar factory workers). The computer as a fancy typewriter was one thing. VisiCalc, the first spreadsheet -- the first "what-if" software -- came out a couple of years later and office work has never been the same.
Wired's Encyclopedia of the New Economy
When we talk about the new economy, we're talking about a world in which people work with their brains instead of their hands. A world in which communications technology creates global competition - not just for running shoes and laptop computers, but also for bank loans and other services that can't be packed into a crate and shipped. A world in which innovation is more important than mass production. A world in which investment buys new concepts or the means to create them, rather than new machines. A world in which rapid change is a constant. A world at least as different from what came before it as the industrial age was from its agricultural predecessor. A world so different its emergence can only be described as a revolution.
How does it help the business?
Managers make strategic decisions. In an ideal world, each decision is questioned: why? The business case is the succinct answer to the Why Question.
tip | Start with "It's easier, faster, cheaper to ... ".
How do you acquire new customers? How do you make money?
A model is not a complex strategic plan. It's closer to the 15-word MacGuffin that appears in the newspaper's TV listings. It's the one page you leave with the potential investor. If the words on the page explain a diagram of the players, products/services, and revenue streams, you're doing yourself a favor. KISS.
Learn more about Web marketing models.
American Marketing Association's (AMA) Definition of Marketing
Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals.
atoms
an Internet presence, brochureware and some email links, but no transactions or extensive customer service or other e-commerce.
mixed bits and atoms
(also bricks-and-clicks) some e-commerce to supplement their traditional business model.
bits
no off-line revenue; no physical presence beyond offices and perhaps some warehousing. Will use traditional physical distribution channels for atoms.
Retail
E-Commerce Sales In Fourth Quarter 2002 Were $14.3 Billion, Up 28.2 Percent From
Fourth Quarter 2001
Census Bureau (update coming May 2003)
U.S. retail e-commerce sales for the fourth quarter of 2002,
not adjusted for seasonal, holiday, and trading-day differences, was $14.334
billion, an increase of 28.2 percent (±5.0%) from the fourth quarter of 2001.
...
E-commerce sales in the fourth quarter of 2002 accounted for 1.6 percent of
total sales.
Note that this is retail only. Retail e-commerce is dwarfed by business-to-business e-commerce.
Measuring The Electronic Economy
Main Street in The Digital Age: How Small Businesses Are Using
the Tools of the New Economy (.pdf)
by Patricia Buckley and Sabrina Montes
U.S. Department of Commerce, February 2002
The term "new economy" was coined to describe an economy with surging productivity due largely to investment and use of information technologies like computers, software, and networks. If we are indeed in a "new economy," we would expect to see diffusion of these critical IT tools to businesses of all sizes throughout the economy. This report finds that small- and medium-sized businesses in every industry are investing in information technologies and exploring the potential of these technologies. However, this research also shows that the smaller the firm, the less it invests in IT equipment on a per-employee basis.
Digital
Economy 2002,
summary of the Commerce Department's
annual report
February 2002
Despite the decline in sales of IT producers in 2001, the U.S. economy has continued to build its IT capital stock, add jobs in key IT services industries, and thereby create the foundation of a stronger economy.
A Nation
Online: How Americans Are Expanding Their Use Of The Internet
NTIA and ESA, February 2002
(based on September 2001 U.S. Census Bureau’s Current Population Survey)
Rapidly growing ... across all demographic groups and
geographic regions.
Not only are many more Americans using the Internet and computers at home, they
are also using them at work, school, and other locations for an expanding
variety of purposes.
In the last few years, Americans’ use of the Internet and computers has grown
substantially.
The rate of growth of Internet use in the United States is currently two million
new Internet users per month.
More than half of the nation is now online. In September 2001, 143 million
Americans (about 54 percent of the population) were using the Internet — an
increase of 26 million in 13 months. In September 2001, 174 million people (or
66 percent of the population) in the United States used computers.
Children and teenagers use computers and the Internet more than any other age
group.
Ninety percent of children between the ages of 5 and 17 (or 48 million) now use
computers.
details: Percent of U.S. Households with a Computer and with Internet Access
Nua Internet Surveys:
E-Commerce
searches for latest; first two results on April 8, 2003
Sweden has overtaken the US to become the
leading nation in terms of ereadiness.
Worldwide B2B ecommerce revenues will surpass USD1.4 trillion by the end of
2003.
The UCLA Internet Report: "Surveying the Digital Future"
Year Three
UCLA Center for Communication Policy, February 2003
(240K PDF)
Highlights from pages 7 - 12:
Almost one-quarter of respondents (24.1 percent) have more than one working computer in their homes. Nearly 10 percent (9.5 percent) have three or more working computers.
Home networking of computers is a growing trend; 32 percent of respondents with two or more computers at home have networked them.
Many Internet users say they waited months or years before buying online. Almost half of Internet buyers (49.3 percent) waited more than two years after going online before making their first purchase. One-third waited more than three years.
The 28.9 percent of Americans who did not use the Internet in 2002 expressed a range of reasons for not being online. The primary reason is lack of the technology; 31.9 percent of non-users say they either do not have a computer or their current computer is not adequate.
Because Rogers' curve assigns 16.5 percent to laggards, then for Americans as a whole, the 28.9 percent puts us still in Rogers' Late Majority phase of Internet adoption.
Be careful using the US Census Bureau ecommerce statistics.
Measuring The Electronic Economy
E-commerce data are collected in
four separate Census Bureau surveys. These surveys use different measures of
economic activity such as value of shipments for manufacturing, sales for
wholesale and retail trade, and revenues for service industries. Consequently,
measures of total economic and e-commerce activity differ in concept and
definition among these sectors, and the total should be interpreted with
caution.
The Census Bureau’s e-commerce measures include the value of goods and
services sold online whether over open networks such as the Internet, or over
proprietary networks running systems such as Electronic Data Interchange (EDI).
information about selection and price
transactions (atoms: pay now get later | bits: pay now get now)
service
Models | Example: Amazon.com
Napster; content syndication
Defined narrowly as 3rd-party sites to connect multiple manufacturers and their suppliers, there are maybe 1,500 sites, according to an October 2000 Wall Street Journal article (not available without a subscription). Because of the small size of this "space" (that's jargon, so watch out), it can be studied more closely. See Marketplaces below.
Defined broadly as any marketing between companies throughout the supply / value chain, there are hundreds of thousands of sites doing far more business by every measure than B2C. Because of the large, fluctuating size of this space, it cannot be studied or characterized as easily. It blends with e-business as I'm defining it above.
What I'm calling marketplaces or exchanges are close to the narrow B2B definition above. Online marketplaces are a faster, cheaper, easier form of intermediation than the pile of print catalogues collected at a trade show or the request for proposal (RFP) process done by paper and telephone.
Models | Examples:
Software vendors: providers of enabling technology, that is, products and services needed for e-business and e-commerce: e-payments, e-signatures, encryption, authentication, privacy, rights management.
If you have a lot of time to turn the battleship in the harbor, a lot of patient employees willing to re-train, and a lot of money to spend, you have entered a whole new industry: Customer Relationship Management. It's slow, hard, and expensive, so you can probably predict its future.
One company, ideas.com, is the only company I can find who is promoting consumer to business transactions.
Webs need to be sold. Whether they're selling goods, services, or ideas, they're competing for people's attention. In the new information economy, that's more precious than money.
In the lingo of marketing, it's called customer relationship management. In the lingo of the Web, it's called community building.
Learn more about marketing models, marketing research, and the transformation of marketing on the Web.
marketing/sales/distribution - trends and CRM
The online book industry is a case study in cornering a market online via first-mover advantage.
How can this be? The barriers to entry are low. Books are selling briskly online. There are plenty of bricks-and-mortar players. So how can we explain the Amazon-Barnes & Noble duopoly online?
Challenges to Effective New Media Marketing
Open Marketing in the New Economy
Gonzo Marketing: The Wit and Wisdom of Christopher Locke
Case Study: Ad Partners
cognitive dissonance
People are intrinsically motivated to reduce inconsistent cognitions.
cognitive load
Experts have schemes, that is, mental models that let them categorize problems according to solution modes. Novices, without schemes, have no alternative other than general techniques such as trial-and-error.
What does it take to build a successful business online? InfoWorld profiles companies using the Internet to breathe life into their business models.
American Bar Association's Safe Shopping -- how secure is your transaction, how will you maintain your privacy, how are you paying for the item, what do you know about the seller, what are you buying, what are the legal terms, when can you expect delivery, how should you keep records, to whom can you complain?
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