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Online Marketing: For Performance, Transaction or Branding

NEW YORK — Speakers representing major Internet advertisers at the Jupiter Online Advertising Forum yesterday were divided about their approach to the medium even as digital marketing was a year into a new era of austerity.

Michael Sands of travel site Orbitz said he expected performance from online marketing, and Lewis Goldman of Citigroup valued it for its transactional value. But fellow panelist John Henderson of Sony Pictures Digital Entertainment said online marketing is ideal for branding.

The three executives and Jupiter senior analyst Marissa Gluck were on a panel addressing about 300 executives at a session called “Digital Marketing in the New Austerity.”

“There has been a cleansing of this industry from the publishers' side, which means there are fewer of us and there will be more clarity for the advertisers to choose,” Henderson said.

He said advertisers have gone through a lot of trials and testing in the past 12 months. “I see this as the beginning of not new austerity but new prosperity,” he said.

Henderson is vice president and national sales director at Sony Pictures Digital Entertainment, which is repositioning its online properties as a branding medium instead of promising impressions.

But Sands, vice president of marketing at the 2-month-old Orbitz, differed with Henderson. He cited the example of Orbitz, which tested hundreds of messages and ideas, combined with offline research.

The Internet cannot be equated with television and radio, which do not offer the same measurement for advertising, Sands said.

“Travel is a very rational purchase” based on price, he said. “It wasn't an emotional sell, it was a rational sell.”

In fact, Sands went so far as to say that online marketing helped launch Orbitz, regarded by many analysts as one of the few recent e-commerce successes. Orbitz is owned by several major U.S. airlines.

For Citigroup, the Internet is more than just getting a marketing message across, said Goldman, who is executive director of business development and partnerships at Citigroup's e-Consumer group. He said the group looks for click throughs and unique visits as crucial to selling financial products online.

“We view online not as a branding medium, but as a transactional medium,” Goldman said.

If publishers want to be taken seriously, they need to provide more information on frequency and uniqueness, more documentation and a gauge of the intent to purchase, Goldman said.

“Our view is that the offline medium is more effective to branding and online is to close the transaction,” he said.

But not every publisher offers content conducive to enabling transactions.

“I think it's incumbent upon the publishers to get out in the market to better educate the advertisers about the publishers' value proposition,” Henderson said.

Henderson drew analogies between Court TV, other channels and CNBC. Tracking firm A.C. Nielsen measured all other channels by at-home audiences. But CNBC is viewed in offices or vacation homes, so the network had to educate advertisers about the unique value proposition.

He encouraged more collaboration between advertiser and publisher.

“Between the publisher and advertiser, can we help you and sit down as a partner?” Henderson said.

Packaged goods in particular might use online marketing for branding, but sectors such as financial and travel services require more performance and metrics to gauge response.

Besides, it would be folly to compare the Internet with mass media such as TV and print, according to Sands.

“The dangerous thing is to try to compute tonnage, tons of eyeballs for TV and magazines,” Sands said. “Whether you like it or not, math is going to overtake branding.”

He said the Internet's most important task was to generate trials, whether they are test drives of BMW cars or sales of Citigroup products.

“Our job as a marketer is to drive that transaction,” Sands said. “Then the product has to do the branding.”

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