A Little Perspective on Web Analytics and Online Marketing

I ask you to indulge my regression and let’s revisit the sector about a decade ago. The internet was booming and it was all the rage to attract “eyeballs” to your site. All one had to do was have buzz, sock puppets, and funny names.  Like new math, new marketing was the thing to do. Making money, well, it was all about that eyeball land grab. They figured out that the one with the most balls, won. We know that didn’t work, and eye banks are the only ones who need more eye balls!

We had lost our way.  We needed to monetize our efforts and show ROI. The earliest firms to recognize this, NetGenesis and Accrue, made some great efforts, but there was a missing ingredient: demand. The earliest systems were used by forward leaning retailers, some merchandisers, and direct marketers who understood “conversions” and the concept of utilizing empirical data to make decisions. But those demand agents were few and there weren’t enough early adopters to drive vendors to success. Some might argue that their untimely demise was based on how difficult the software was to use and cost. Others might argue that the demand side of the equation was not there. The truth is that both were correct.

Marketers were more concerned with brand, color, and font than conversion based on ROI. And few marketers then knew what to do with the emerging internet as an effective marketing channel. Business schools didn’t teach internet marketing at the time (and rarely do today) and most didn’t ‘get’ that the internet is inherently a direct marketing vehicle with brand promise as a secondary offering.

They only people who did buy these early systems were in IT.  They were interested in the technographic information about browser types, OS use and 404 errors. They were they only ones who could install the software, but they really weren’t interested in behavioral information and web site optimization outside of making sure that the pages rendered. In fact for most of them, the marketing data got in the way of doing their real job, keeping the systems and networks up and running.

During 1997 presentations I often asked the audience how many of them would consider themselves either a marketing person, broadly defined, or an IT person. Back then only about 2 or 3 out of a hundred considered themselves non IT. The last presentation where I bothered to ask the question, the numbers had flipped.

So, what had happened?  The first; ASPs allowed IT to get out of the loop and we saw a spike in the marketing adoption rate. But mainly, the dot com bomb forced clarity and sobriety. We needed to show ROI.   And the industry learned a remarkable lesson: there is a strong similarity between both on line and off line marketing "objectives."  So instead of hearing from a customer that they have “an information site” with un-clear monetization objectives, they began identifying site objectives around principal types: Media, Commerce, Lead Generation, and Self Service.   Like an off line business, each of these models has a clearly defined objective of making more money (selling), saving more money (streamline process), creating more “stickiness” (the media model) and creating greater customer loyalty and retention. That’s it. It’s not eyes balls. Slowly an industry was born, with new organizations, and colleges offering internet marketing courses as part of MBA programs.

That's enough history, I'll pick up here tomorrow and talk about the current state of the industry and the shared challenges we face.

Comments

[Eric DePaul]

I question how effective internet marketing currently is. I believe a couple of years ago it was very effective with its ‘specific to the consumer’ approach. Nowadays with the current bombardment of information we see, I question if the consumer pays attention. Just like the mass marketing mailings that we receive, internet marketing is beginning to be ignored. I close out the advertisement windows just like I would throw out my ‘junk mail’. I buy pop up blocker software, just like I would sign up for a ‘do not call’ list. Internet marketing has begun to be more of a disruption when individuals are working on the web. It maybe effective for marketing to individuals that ‘hang out’ on the internet, but I don’t see it as effective for people using the internet when they need it. The challenge for internet marketing will be the same as past ways of advertising, “how do we balance what we are trying to relay to the consumer without becoming a burden?”

[Steve O'Brien]

Eric, Great comment, but I think you're using an extremely narrow definition of "Internet marketing." You seem to equate it with online banner advertising and mass e-mail, both of which I think we all agree are losing effectiveness (thus the growth of search marketing). But "Internet marketing" includes targeted e-mails (like the great reminders I get from Amazon and Ticketmaster about things I would never search for -- I'm happy they know my musical taste well enough to remind me when the Barenaked Ladies are appearing in Boston or releasing a new CD). Or cross-channel marketing that uses the Web for fulfillment (check "geico.com to save 15% in 15 minutes or less" -- that's not an online ad, but it is part of Internet marketing!). And let's not forget that Search Engine Marketing, the largest fastest growing market there is, is just one part of "Internet marketing."

[Donna Konley]

Affordable search engine marketing that works. Like other marketing efforts for your business, you should have a plan that is well designed and executed. And like any other kind of marketing, you must weigh expense to return on investment (ROI) ratio for new business leads generated by higher traffic to your site.Internet Marketing

[Sibel Depaul]

When I compare marketing channels, I believe internet marketing is the one who leads the marketer to measure ROI easily and classify his/her customers and then personalize the delivered message. I agree that internet marketing is ignored from many and become annoying more and more. But the question “when?” should be asked. If internet marketing has been used as a way of mass marketing, yes, it is boring and people do not pay attention. But if, it is used after grabbing data and it is sent to the recipient with a personalized message, I believe it is more traceable than other channels. Consider print ads, outdoor or radio. Even if you put a deal, something that has a call to action message, it is nearly impossible to track what your customer does after seeing your ad. But instead, on the web, you can track easily your customer when s/he leaves your web site. Does s/he go to the competitor site or your partner site? Does s/he shop online or not? I believe internet marketing might facilitate the life of marketers in terms of personalize marketing and ROI.

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