OPINION: MILLS ON ... E-COMMERCE AND ADVERTISING

There it was, the headline on the front page of a national

newspaper last Friday: ’Vauxhall cuts car prices by pounds 1,000 on the

internet.’

But which paper? Well, not the Financial Times which, perplexingly,

carried not a mention of the story, nor any of the broadsheets.

No, the paper in question was the Daily Mail, the senior executives from

which were by complete coincidence starting an awayday on the internet

that very morning at the Royal Crescent Hotel in Bath. Joking apart,

however, what is remarkable is that not only that the Mail put the story

on the front page but that it considered it more important than an

exclusive about Posh and Becks’ new pounds 2.5 million mansion.

Indeed, the day a mid-market tabloid puts a business story about the

internet on its front page must be some kind of landmark. Why should

this be? The Mail, as ever, has put its finger on the pulse: the

internet today is as much a mass consumer issue as a business one. The

real question, however, is not about the Mail’s news agenda but how a

story like this will play in Middle England. I suspect that the majority

of Mail readers will be aware of the internet as a medium for buying

books and buying direct from supermarkets. Most likely - certainly if

they’ve used it for supermarket shopping - they’ll see it more as a

convenience tool than a way to buy things cheaply.

Don’t get me wrong, that is one part of its appeal - and everybody knows

that there is a trade-off between convenience and price. What they won’t

be aware of is how the real effect of the internet is to force

transparency of pricing into various markets. This isn’t a state secret

- it’s just that up till now you’ve only been able to read about in the

business pages.

Putting Vauxhall on the front page of the Mail could change all that

because the consumer doesn’t have to a genius to realise that if you can

cut pounds 1,000 from the price of a car just by selling direct off the

internet, then something extremely strange has been going on in the car

market for a long time. And after cars, well who knows what questions

consumers will start asking about what product areas.

This is where it becomes interesting for advertising. If the internet is

driving prices down, is it then desirable to use advertising to protect

or build a premium-priced position in the market? Or will advertising

become primarily concerned with producing volume sales that allow lower

prices? If it’s the latter, is brand advertising redundant?

On the other hand, you could argue that just as the Mac, by lowering the

entry barriers, allowed anybody to set up their own publishing

operation, the internet too has become the great equaliser. In a context

where everybody has low prices, branding becomes even more

important.

The answer, I suspect, is that you have to do both. Price and branding

advertising are not mutually exclusive. Unfortunately, there are few

case histories to prove this - and there isn’t much time to learn

either.