The Power of e Marketing

President and CEO eMarketing Association Robert Fleming

President and CEO

eMarketing Association

The Internet is Different A rare example of a modern functional anarchy No official censors, no bosses, no board of directors, no stockholders No one “owns” the Internet, there is no “Internet, Incorporated” The “Internet” itself, doesn’t even officially exist as an entity The “Internet” never charges for anything. Each group accessing the internet is responsible for their own machine and access

A rare example of a modern functional anarchy

No official censors, no bosses, no board of directors, no stockholders

No one “owns” the Internet, there is no “Internet, Incorporated”

The “Internet” itself, doesn’t even officially exist as an entity

The “Internet” never charges for anything. Each group accessing the internet is responsible for their own machine and access

Evolution Of The Internet Phase One: Portals Everywhere Phase Two: Simple Transactions Phase Three: The Digital Decade

The Internet Grows 600 million people access the internet worldwide (2002 est.) 2002 e-commerce 1 trillion dollars (est.) 68% increase in e-commerce 2000 vs. 2001 Over 1 billion web pages, 40 million sites

600 million people access the internet worldwide (2002 est.)

2002 e-commerce 1 trillion dollars (est.)

68% increase in e-commerce 2000 vs. 2001

Over 1 billion web pages, 40 million sites

Rapid Increase in Internet Use in the United States Across States –Over half the population Source: NTIA and ESA, U.S. Department of Commerce, using U.S. Census Bureau Current Population Survey Supplements August 2000 September 2001

Internet Use at Any Location, 1998 and 2001 As a Percent of U.S. Population Source: NTIA and ESA, U.S. Department of Commerce, using U.S. Census Bureau Current Population Survey Supplements

What are they doing online? More time More money More services Fewer sites

More time

More money

More services

Fewer sites

Online Activities 2001 – Internet users Age 3+

Time spent online Source: Jupiter Oct 1999 4.3 9 6 3 0 Oct 2001 8.2

75% of online customers say the Net makes their lives better 79% of Net users utilise it for information for offline purchases AOL online average minutes per day: 1999 2001 47 63

75% of online customers say the Net makes their lives better

79% of Net users utilise it for information for offline purchases

AOL online average minutes per day:

Impact of Internet on media consumption Source: (USA) Scarborough National Internet Study 23% Watch TV less often 9% Listen to radio less often 15% Read newspaper less often 20% Read magazines less often

23% Watch TV less often

9% Listen to radio less often

15% Read newspaper less often

20% Read magazines less often

7.00am 9.00am 11.00am 1.00pm 3.00pm 5.00pm 7.00pm 9.00pm 11.00pm Reaching consumers throughout their media day TV Breakfast News News, Ent, Sport Print Morning Paper Paper/Mags Leisure Mags Outdoor Journey To Work Out for Lunch Journey Home Radio Breakfast Show Drive Time Drive Time Online Check News/ Mail Messenger News, Sport, Finance Messenger Web Cast

e-commerce only represents a minor fraction of total GDP... e-commerce (3%) 2002 US GDP Projection Traditional retail (97%)

The Internet has to support Brick & Mortar Internet Contribution to Bricks and Mortar Initiate Relationship in Information Stage Increase Product Selection Develop Aftermarket Contact Develop Customer Knowledge Reduce Inventory Needs Reach New Customer Sets

… and Bricks & Mortar must support the Internet Bricks & Mortar Contribution to Internet Brand Reinforcement and Trust Capture urgent and impulse buys Facilitate Delivery Capture Aftermarket Profits Reach a larger customer base Place to touch and test-drive product

Customers must be able to move back and forth seamlessly ... Shop Research Buy Own Dispose/ Repurchase Awareness Internet Bricks and Mortar Shared Customer Info Role of Bricks and Mortar Transform Bricks and Mortar Integrated Systems

Marketing Employment Is Growing “ Employment of advertising, marketing, promotions, public relations, and sales managers is expected to increase faster than the average for all occupations through 2010 ” Source: United States Department of Labor

eMA Employment Survey 70% of all management level marketing positions require Internet abilities and/or experience.

70% of all management level marketing positions require Internet abilities and/or experience.

Internet Related Jobs Are NOT Just in I T Source: Center for Research in eCommerce, graduate School of Business, University of Texas at Austin

The Change in Corporate Culture 1996 – most web sites are managed by IT /MIS 2001 – marketing and IT/MIS manage web sites jointly (in some cases) Marketing needs to “own” web site IT/MIS are the mechanics – marketing the pilot Marketing becomes more collaborative and less autonomous

1996 – most web sites are managed by IT /MIS

2001 – marketing and IT/MIS manage web sites jointly (in some cases)

Marketing needs to “own” web site

IT/MIS are the mechanics – marketing the pilot

Marketing becomes more collaborative and less autonomous

Are the Following IT or Marcom Functions? Corporate communications Advertising Corporate identity Product positioning Market Research

Corporate communications

Advertising

Corporate identity

Product positioning

Market Research

IT/MIS Continues to Dominate Web Management Lack of technical understanding by marketers Fast changing technology can create confusion Corporate politics plays a role

Lack of technical understanding by marketers

Fast changing technology can create confusion

Corporate politics plays a role

Efficient Organization

Effective Organization

Outlook Increasing shift of web site responsibility from MIS to marketing Increased technical knowledge required from marketers Internet marketing accounts for 15% of all advertising impressions and only 5% of marketing budgets The gap will close between impressions and budget Marketer must understand new tools

Increasing shift of web site responsibility from MIS to marketing

Increased technical knowledge required from marketers

Internet marketing accounts for 15% of all advertising impressions and only 5% of marketing budgets

The gap will close between impressions and budget

Marketer must understand new tools

No Other Media Has All of the Advantages of eMarketing. Period. Cost effectiveness Global reach Interactive response Measurability Personalization Real-time feedback

Cost effectiveness

Global reach

Interactive response

Measurability

Personalization

Real-time feedback

But E-marketing Suffers From Lack of data – 5 years vs. decades for magazines, radio Lack of understanding of technology by marketers Fast moving and turbulent arena Changing technologies Lack of trained personal Senior management barriers Corporate culture

Lack of data – 5 years vs. decades for magazines, radio

Lack of understanding of technology by marketers

Fast moving and turbulent arena

Changing technologies

Lack of trained personal

Senior management barriers

Corporate culture

Online Marketing Tools Are Less Than 6 Years Old (That’s First Grade) E-mail marketing Site design for e-commerce Viral marketing Affiliate marketing Banner advertising Search engines Online publicity Research CRM

E-mail marketing

Site design for e-commerce

Viral marketing

Affiliate marketing

Banner advertising

Search engines

Online publicity

Research

CRM

Site Design for E-marketing Merchant account checkout Visitor expectations Surveys Content Technical considerations Color Plug ins Product descriptions Company information

Merchant account checkout

Visitor expectations

Surveys

Content

Technical considerations

Color

Plug ins

Product descriptions

Company information

What Works on a Site ? Common Influences on Online Purchase Shipping fees 92% Prices 92% Product availability 86% Special promotions or incentives 76% Selection 69% Order tracking 66% Clearly identified delivery time 65% Return policy 63% Ease of use 62% Site performance/speed 51% Source: Vividence

Search Engines Pay for position taking a strong lead Search engine optimization (SEO) critical Majority of users rely on search engines for navigation Targeted audience Accounts for over 70% of new site visitors Turbulent arena

Pay for position taking a strong lead

Search engine optimization (SEO) critical

Majority of users rely on search engines for navigation

Targeted audience

Accounts for over 70% of new site visitors

Turbulent arena

E-mail Marketing E-mail is the number one app with over 90% of internet users Issues such as browser differences, targeting, and privacy are critical Spam, creates a major negative for e-mail marketing, laws passed in 19 states Only 3 years of significant use

E-mail is the number one app with over 90% of internet users

Issues such as browser differences, targeting, and privacy are critical

Spam, creates a major negative for e-mail marketing, laws passed in 19 states

Only 3 years of significant use

Viral Marketing Hot Mail was one of the first examples of viral marketing Another “e” term for “word-of-mouth” advertising Bulletin boards, e-mail, chat rooms are the major conduits for viral campaigns What is “buzz”

Hot Mail was one of the first examples of viral marketing

Another “e” term for “word-of-mouth” advertising

Bulletin boards, e-mail, chat rooms are the major conduits for viral campaigns

What is “buzz”

Affiliate Marketing Partnership and affiliate programs are booming Cooperation between online companies Commission programs and banner exchange programs lead this channel

Partnership and affiliate programs are booming

Cooperation between online companies

Commission programs and banner exchange programs lead this channel

Banner Advertising Volatile history with sharply declining click through rates New forms such as java, active x, Pop-ups, pop-under and other new delivery methods are gaining acceptance Branding is possible with banners

Volatile history with sharply declining click through rates

New forms such as java, active x,

Pop-ups, pop-under and other new delivery methods are gaining acceptance

Branding is possible with banners

Research Log files ASP log conversion Metrics for e-marketing analysis Surveys

Log files

ASP log conversion

Metrics for e-marketing analysis

Surveys

Challenges Integration of e-marketing and conventional marketing creates a “blurred channel” Hybrid advertising Marketing mix Consumer expectations Technological limitations New innovations Legal issues

Integration of e-marketing and conventional marketing creates a “blurred channel”

Hybrid advertising

Marketing mix

Consumer expectations

Technological limitations

New innovations

Legal issues

Conventional Media Addition of web address creates hybrid advertising Web site can degrade or enhance conventional efforts Visitor experience becomes critical Diffused metrics

Addition of web address creates hybrid advertising

Web site can degrade or enhance conventional efforts

Visitor experience becomes critical

Diffused metrics

Technological Limitations Different browsers Online software (plug ins java –flash etc.) Screen resolutions Bandwidth speed Operating systems Server technology

Different browsers

Online software (plug ins java –flash etc.)

Screen resolutions

Bandwidth speed

Operating systems

Server technology

Legal Issues Privacy policies Spam International commerce COPPA 19 states have anti Spam laws Dozens pending in congress Online disclosure

Privacy policies

Spam

International commerce

COPPA

19 states have anti Spam laws

Dozens pending in congress

Online disclosure

Emerging Technologies. Wireless poised to triple over the next few years Smart chips could track BM purchases Higher bandwidth could allow for increased streaming media on sites MPEG4 – good enough for video? ???

Wireless poised to triple over the next few years

Smart chips could track BM purchases

Higher bandwidth could allow for increased streaming media on sites

MPEG4 – good enough for video?

???

80% Still Dial-up Source: NTIA and ESA, U.S. Department of Commerce, using U.S. Census Bureau Current Population Survey Supplements

One Example

One More

CRM

Digital innovations become an integral part of life Breaks down logistical barriers Offers greater flexibility and power Shrinks time and business Simplifies complex business processes Enables effective communication and collaboration Opens up new markets

Digital innovations become an integral part of life

Breaks down logistical barriers

Offers greater flexibility and power

Shrinks time and business

Simplifies complex business processes

Enables effective communication and collaboration

Opens up new markets

The 21 st Century Explosive increase in innovation Extraordinary dynamism of technology Exceptional increases in productivity Myriad new forms of business activity Expanding opportunities Level playing field

Explosive increase in innovation

Extraordinary dynamism of technology

Exceptional increases in productivity

Myriad new forms of business activity

Expanding opportunities

Level playing field

The eMarketing Association Accreditation body for CeMA and CeM Certifications Certifications now offered in over 250 schools Largest association representing e-marketing exclusively Recognized globally Extensive e-marketing resources

Accreditation body for CeMA and CeM Certifications

Certifications now offered in over 250 schools

Largest association representing e-marketing exclusively

Recognized globally

Extensive e-marketing resources

CeMA Certification Certification—a sign of competence and achievement in this field—is particularly important in a competitive job market. While relatively few advertising, marketing, and public relations managers currently are certified, the number of managers who seek certification is expected to grow. Source: United States Department of Labor

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Questions