INTERACTIVE: BEHIND THE HYPE/ADVERTISING ON THE INTERNET; The secret of Net marketing: getting to know the consumer

Although net advertising’s being touted as God’s gift to marketing, Morgan Holt sees a possible minefield

Although net advertising’s being touted as God’s gift to marketing,

Morgan Holt sees a possible minefield

Believe the pundits and advertising in cyberspace will reach out to

individuals in a way not yet imagined. Yet companies persist in merely

converting paper brochures into Web pages where one message is supposed

to apply to everybody.

It is easy to forget that the Internet is just one more aspect of

interactivity alongside the fax, touch-tone phone and point-of-sale

kiosk. They’re all platforms that have a unique and distinctive appeal

but finding a use for the Internet other than shouting ‘I’m great; buy

me’ is proving difficult. Will your site be a personal space for each

visitor or one of the growing number of dead hoardings and ghost sites?

Backed by the American marketing guru, Don Peppers, a new mode of

Internet marketing is sweeping the Web as strategists find ways of

responding to what the customer wants.

Back to basics. Peppers restates the three rules of busines: know your

customers, ask them what they want, and give it to them. ‘The process of

‘interactively’ refining what the customer wants,’ he says, ‘ensures

that the customer is yours for life’ - and there’s no reason why the

Internet should be any different.

‘Get into the technology for the right reason. If you simply strap the

Net into your selling channels, you will inevitably fail,’ he warns.

‘The Net will never live up to the hype. It’s like strapping a jet

engine on to a railroad train to see how fast it will go. The jet engine

just wasn’t made to be part of a train.’

So companies looking for custom on the Internet should be aware that

there are rules to follow. ‘We’re in the age of information and the age

of customer information. When you embrace it, make sure you have a

customer bill of rights,’ he says. ‘Privacy is indispensable. It is

vital for customers to know their information is safe with you.’ If you

jeopardise it, you will never get your customers back.

Rule two is less simple. You can’t enter unless you know the identity of

the person who ultimately pays the money. Learning the identity of a

customer is more than getting a name and address. It involves learning

tastes and preferences by asking pertinent questions and watching what

people do. There is little point, for instance, in telling everyone what

great camera equipment you have when only a few will be interested. How

much better to find those few and tell them directly, perhaps offering

them some bargain deal for being so special.

The ideal focus for this information hunt is the cybermall, where people

will someday go shopping on the Internet. There are more than 700

already but each one is a daunting landscape of anybody and everybody.

The new brand of cybermall will be selective, personal and responsive.

First of the block will be the online service, Prodigy, in the spring,

closely followed by Virgin. Both will welcome you with some basic

offerings and gradually learn about you as you wander around. By the

time you register, your welcome page should reflect your hobbies and

personal interests.

Alex Dale, publishing director at Virgin’s Internet division, VNet,

says: ‘One of the biggest problems with the Internet is finding the

information, services and products you’re really looking for. This

[personal profiling] does it the other way round. It goes looking for

the customer.’

Adrian Wistreich, a director of the research specialist, Market Tracking

International, and author of the Campaign report, the Interactive

Future, says that ‘the majority of users already claim to have used the

Web to shop’.

Wistreich continues: ‘Forecasts of online expenditure of dollars 200

bilion by the year 2000 might seem wild, but it will still only be a

tiny share of total expenditure. Neither the current lack of intelligent

navigator software nor bandwidth will be limiting factors by then. The

Internet is ideally suited to the sophisticated loyalty club marketing

already widely used in mail order, and has many advantages over

traditional TV shopping channels.’

Few software companies have grasped this idea and the only one in Europe

so far is Broadvision Inc with its database that is tailored to what the

customer wants.

‘Changing the Web monologue to a dialogue is essential,’ Phelong Chen,

Broadvision’s president, says. Breaking away from ‘brochure-ware’ means

you can confidently say you own so many customers. That, and only that,

will draw the advertisers. ‘Gradually build a customer profile and

psychographic. Let the customers know they’re in control and that the

more information they give you, the more you can offer them. Then bribe

them,’ Chen adds.

Incentives are an important part of the customer profile. If customers

feel treated as individuals, they will reward you with their loyalty.

‘If you know your customer, you will cement your relationship forever,’

Peppers says.

Rewarding that loyalty with incentives - air miles, discounts -

sprinkles a magic dust: on the Internet, small companies can compete

just as effectively as the giants.

In 1980, 17 per cent of the US workforce was employed by the Fortune 500

companies. After a decade of eliminating whole layers of management, the

same companies have 10 per cent. Information technology and the personal

touch has opened a hole in the ground where economies of scale don’t

matter like they used to - and the larger you are the more easily you

will topple into it.

And knowing the customer works both ways. Advertising your latest lowest

prices also advertises them to your competitors. You have a momentary

advantage, but it is quickly matched and competition forces everyone to

offer the lowest price to everyone.

Peppers sees the Internet’s future as one in which after-sales matters

as much as getting value for money. When you know a customer, you’re not

just selling products, you’re selling a service.

The Interactive Future is available from Keely Baker at Campaign on 0171

413 4306, price pounds 495 (paper version) or pounds 595 (CD-Rom plus

paper version).