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Will the Web Change All Marketing?

I’ve read with incredulity recent press speculation on whether the Internet is a viable marketing medium. Predictions of the imminent demise of Internet advertising abound, and the concerns have sent the stocks of Internet advertising companies plummeting in recent weeks. But while these alarms have gained a degree of morbid attention, they also have run contrary to the trends seen every day in the advertising business, both online and offline. Anyone who has spent time in either discipline understands that, to paraphrase a famous quote, the reports of the Internet’s death are greatly exaggerated.

On the surface, there appears to be good reason to believe the “sky is falling,” as naysayers cite the lack of branding power on the Internet as the culprit. This, in turn, ignites the debate about whether the Internet is a branding medium or a direct response medium — a debate that has been raging for decades about offline media. It is not a surprise that it has spread to the Internet.

The same flaws, however, in the branding vs. direct response argument exist both online and offline. The inherent problem is the either/or nature of the debate. Branding and response are inextricably linked, regardless of the medium. The main reason for branding is to build a bond to elicit an action — simply, to get the consumer to purchase a company’s product or service instead of a competitor’s. This is also the purpose of direct response marketing. Therefore, the major difference is the timing of the response. Direct marketing tends to look for an immediate response, while branding plants the seed for an eventual response.

To take the often-ignored synergy further, direct response marketing always has a branding component. When was the last time you got a direct mail piece or a telemarketing call that didn’t mention the company’s name, its reputation or its products and services? A number of companies — online and offline — have built substantial, well-respected brands with little more than aggressive, strategic direct marketing.

Where some companies have run into trouble with the Internet, thereby providing fodder for the gloom-and-doom crowd, is when they use it as a branding-only medium.

Even Jeff Mallett, president of Yahoo, a company that traditionally advocates branding, recently said of the Internet in The Wall Street Journal, “Is it a branding medium? No, not really. The traditional building of a brand, which is to create an image, create a feeling — [we’re] not there yet.”

Yet no one can argue that some very strong brands have been established on the Web. They are earned through repeated positive experiences that induce trial. Through trial, the branding message is delivered.

Will the Internet become a branding medium only when it offers the same sensory experience as television? The prophets of advertising foretell that the deep-pocketed offline advertisers will embrace the medium, and everyone will live happily ever after when broadband and streaming media mature. Though there is no doubt these emerging technologies will have an impact, the problem with this prediction is that it contains a major, possibly flawed, assumption.

This assumption, made much too often, is that Internet advertising will inevitably imitate offline advertising. But what if Internet advertising won’t mirror offline channels? What if it’s the other way around?

Is it impossible to believe that a young upstart can turn the tables on the veterans? That’s what the golf world used to think before Tiger Woods came along.

Despite all the hoopla surrounding it, the Internet is barely out of its infancy; yet its rapid consumer adoption and technological innovation are unprecedented. While Internet advertising may lack the scale of some offline media in terms of advertising dollars, it is gaining ground every quarter and surpassing traditional media. Despite this, it’s not just the technological innovation of the new medium that portends great change in traditional media; it’s the new beliefs and behaviors that it has introduced to the advertising world.

Consider the many options available through this medium: banner advertising, opt-in e-mail, search engine optimization, affiliate programs, viral marketing, sponsorships, interstitials, rich media, etc. How many offline media have developed so many unique and dynamic applications in a mere two to three years? All marketing channels will feel the pressure to reinvent themselves.

Then there’s performance-based advertising. With the eager acceptance of this concept by online advertisers and direct marketers, and the pressure it has put on the cost-per-thousand model that was borrowed from the offline world, how long do you think it will be before print and broadcast advertisers demand more accountability and cost-effectiveness?

The fact is, all media are changing. While there has been a great deal of talk about convergence, it has centered mainly on the device. The more imminent convergence is not about the equipment, it’s about the offerings, and it has already begun. The result is various advertising channels attempting to embody a “best of” approach — combining the best aspects of multiple channels into one place. The Internet has dramatically accelerated this evolution by combining the reach and sensory experience of television, radio and print; the ability to provide a great deal of information like print and direct mail; the interactivity of telemarketing; and the ability to transact like telemarketing and retail outlets.

To prove this hypothesis, look no further than the changes occurring in television. Witness DRTV, with the proliferation of shopping channels and their estimated $23 billion in annual revenues. Witness TiVo and ReplayTV, which are radically redefining the relationship among advertisers, programs and viewers. And witness Wink Communications, which enables television viewers to interact with the programs they are watching to request product samples, coupons, brochures and other offers from advertisers, to enroll in promotions and contests, and to make purchases instantly. These revolutionary changes to such a venerable medium were scarcely imaginable just a few years ago, yet they are surely indications of more transformations to come.

In a world where advertising appears on little bags of airline food, on taxis, buses and trains, and even in restrooms, it is clear that both advertisers and direct marketers will go where the people are in order to deliver their messages.

And with the unanimous predictions that Internet usage will continue on an aggressive growth curve in the coming years, the question of whether the Internet is a viable marketing channel seems more than a little shortsighted. The only real question is, what will it all look like? How will the advertising landscape change to adapt to the changes happening across all media? Regardless of where you stand in the debate, we all can agree that it will certainly be exciting.

• John Ardis is vice president of marketing at ValueClick, Westlake Village, CA, a global provider of performance-based Internet advertising solutions for advertisers and Web publishers. Reach him at [email protected].

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