Electronic Marketing: What You Can Expect

Article excerpt

The e-marketing industry has a bright future out watch out for some underhanded tactics.

The future of marketing is there for anyone to see--just log onto the Internet. In less than a decade the World Wide Web has changed from a research enclave to the Main Street of the world. In spite of resistance from those who treasured its earlier academic and free-spirited nature (back when "everything on the Internet was free"), the Web has become a booming marketplace. In the years ahead it will continue to shift from a medium of personal communication and expression to a place of economic opportunity.

While some writers, such as David Brin in his science-fiction novel Earth, predicted the sweep and pervasiveness of the Web, its social and economic impacts continue to surprise us. The rate of change on the Net is amazing--nothing seems to stand still. In contrast to Moore's Law, where computer speed and capacity double every 18 months, the Internet seems to double in capacity (if not speed) every 18 weeks. Accordingly, we have the luxury of watching a process unfold in what seems like time-lapse photography.

The World Wide Web was still a novelty to many marketers even 18 months ago, but Internet marketing is now coming into its own. U.S. consumers spent at least $2.3 billion over the Internet during the 1998 Christmas season alone (and were expected to spend $9 billion in 1999). Eight and a half million U.S. households purchased holiday gifts online in 1998, up from 2 million in 1997, according to The Wall Street Journal. Online clothing sales tripled to $330 million from 1997, The New York Times noted, and are expected to continue growing at a similar rate.

Although the Internet is not yet equal to other forms of marketing media in terms of returns, the research firm FIND/SVP determined that the Internet rose from eighth to about fourth place among consumer media over the past five years--a fivefold increase. The last half-decade saw declines of around 5% in the amount of hours per week that Americans watched network TV, listened to the

radio, and read newspapers. A few media, magazines and books, for example, grew at about the same rate. Only cable TV showed serious growth over this period, with an increase of about 50%.

Part of the Internet's increasing popularity is fueled by the growing use of credit cards online. According to MasterCard International, the most often purchased Net products were software (41%), followed by books (29%) and computer hardware (18%). Smaller but growing categories include food, airline tickets, CDs, flowers, and clothes.

One Internet advertising agency, the Double Click Company, believes that Web users now total 150 million worldwide. This estimate may be conservative. For example, about 14 million Japanese now use the Internet, but many analysts predict that figure will rise to 27 million by 2001. That would mean e-commerce in Japan would jump from 200 billion yen annually today ($1.8 billion) to 1 trillion yen in 2001 ($8.5 billion).

What does this mean for you, the

Web surfer, e-mail writer, and potential e-consumer? What can you expect to see when you walk down the Main Street of the world in the years ahead? Here are some likely possibilities.

Expect More Ads

Marketers want to contact you, the potential customer, directly, without investing in a big advertising or research budget. With the Internet, this is almost magically possible. Web advertising will reach $9 billion per year by 2002, according to Jupiter Communications, a leading Internet research firm. While banner ads on Web sites sometimes get no more than a 1% response (compared with 5%-7% for direct mail), the cost is dramatically less: A Web site ad may cost $5 for each 1,000 individuals who view it, while direct mail could cost $50 to reach the same 1,000 sets of eyeballs.

On the Internet, companies can test advertising banners on a variety of sites at relatively little cost and continue with the most-effective ones. …