Television is arguably the most effective mass advertising medium that has ever existed. More people have televisions in their homes than indoor plumbing. It is no wonder that e-commerce companies looking to build their customer base have turned to the power of television — it just makes sense. The question these companies now face is how to use TV effectively and efficiently to drive revenue. Here are three television marketing models used by e-commerce companies to reach consumers:
Model 1: traditional branding. A commercial is made to build awareness of a company or product and establish a brand image in the consumer's mind. The consumer, armed with this brand image, visits the Web site to purchase the product and becomes a customer. Examples of companies using this approach include pets.com and mothernature.com. Pets.com's now famous talking sock puppet speaks on behalf of the world's pets that cannot speak, extolling the virtues of buying products on pets.com and having them delivered right to your door. Mothernature.com features a woman who plays the character of Mother Nature. She is not the ethereal figure usually associated with the character. She is a modern woman who extols advice about vitamins and herbs available on “her” Web site.
Model 2: direct response television. A commercial or infomercial is made with the goal of selling a specific product. The consumer can either call an 800 number to order products or go to the Web site. Examples of this type abound in virtually every direct response spot or infomercial on the air today. When the advertisement runs, it has the URL listed adjacent to the 800 number.
Model 3: Web response television, or WRTV. This is one of the emerging advertising models now being used. In this model, the commercial is direct response. It gives people all the information they need to take an action. However, unlike traditional DRTV, there is no specific product offer. Rather, the response you are seeking is for a viewer to visit the Web site and take a specific action or sign up for a service. This is an emerging model that we'll discuss in the future.
This column is the first part of a three-part series discussing these three advertising models and what works, what doesn't and why. Because the traditional branding model is the most familiar, this is where we will start.
When we think of brands, hundreds stand out — Coca-Cola soda, Kleenex tissues and Nike shoes, to name a few. These companies are U.S. icons of industry and have created brands and images so strong and far-reaching that they cannot be confused. Part of their success is their longevity. These companies have had decades to saturate the market with jingles, promotions and products. So what does the Internet newcomer to the business world do? Copy the model and wait for success.
The problem is, it's not working. According to a recent study, dot-com companies spent $7 billion on advertising and generated $300 million in revenue in 1999. That equates to $21 of media to generate $1 of revenue. In the direct response industry, a more likely scenario is to spend $1 of media to generate $3 in revenue.
Here are three reasons traditional branding misses its mark of building a customer base:
Clutter. The promotion that was once a novelty is now lost in a crowd of other novel ideas. When the first Internet companies advertised during the Super Bowl, it was newsworthy and unique. This year, 17 dot-coms had ads. It is now almost expected that there will be e-commerce commercials during the Super Bowl.
The promotion doesn't fully explain the benefits and services of the product. The ads are clever and entertaining, but people are asking what the company does and what the benefits are of what it is selling.
A March 30 article in The Wall Street Journal titled “Where Have All the Gerbils Gone?” talks about the potential problem associated with traditional advertising for an Internet-based company. Unless customers know exactly what you are selling, your commercial is little more than entertainment to them. The “gerbils” reference was to an ad for the Internet company Outpost.com. The company created an expensive ad for this year's Super Bowl in which bean bag gerbils were shot out of a cannon. The ad was funny, but aside from the laughs — expensive ones at that, little more than humor was accomplished. Why? Because viewers had no idea what the company was about. Outpost.com didn't show people ordering electronics. People talked about the ad, and indeed it was mentioned three months later in The Wall Street Journal but not for its success.
The focus is on the wrong target. It sometimes seems that companies may be more focused on Wall Street than on the realities of driving customer traffic.
Branding a product or service is about making a promise to a consumer. If you try the product and it performs as promised, you will have created a customer who respects what you offer. To be effective, a branding campaign typically is built up over time. It's not about notoriety or entertainment. It is about meeting customer expectations time and time again. Don't expect branding to do something it is not intended to do. Branding is not able to drive traffic in an immediate and cost-effective way.
Next month: The DRTV commercial and its role in driving traffic to e-commerce sites.