What is Internet Marketing?

Internet Marketing: Internet marketing is the process of communicating marketing and sales information using the internet. To be successful at Internet Marketing, it doesn’t matter if you are an expert in marketing or a novice. However, it does matter that you can identify, setup, and test different marketing campaign and programs.

Some of the advantages of using internet marketing programs include rapid response, the ability to precisely measure customer interactions with promotions, the ability to control of how and where money is spent, the ability to precisely target who sees promotional materials and cost effective marketing programs.

Internet Marketing Advantages

Advantages of internet marketing include getting rapid response from marketing campaigns, tracking interaction with promotional materials, flexible spending controls, precise targeting and cost effective marketing program.

Rapid Response

Internet marketing program often can have measurable results within days or hours compared to other forms of media such as radio broadcast, direct mail or media publications. The ability to measure rapid response also allow for the content or promotion to be changed or adapted in mid-promotion increasing the overall effectiveness of the program.

Tracking Interaction

Unlike traditional marketing, Internet marketing offers the possibility to track almost every action a visitor or potential customer takes in response to marketing messages and how they navigate through their buying cycle. Tracking codes can be inserted into links and stored in cookies to find out how web site visitors and email customers react to your marketing programs.

Spending Control

Internet marketing programs commonly have threshold settings allowing limits to be established for campaigns. The program is run until the budge threshold is reached the promotion slots are give to other promoters. This allows merchants to budget and test multiple campaigns where other forms of media such as magazines require a single promotion that reaches many people. Some Internet marketing programs also have pay for performance programs such as affiliate marketing where the cost of promotion only occurs when sales or qualified sales leads have occurred.  

Precise Targeting

Internet marketing programs can use precise targeting by placing ads only in front of potential customers that have a much defined set of characteristics. This means that the ads can be adjusted for those types of customers (micro targeting), making the ads more effective. For example, an airline can promote special airfare rates between cities where airline customers have repeatedly traveled. The ad can be customizing to show the cities where the special rates apply which closely match the interests of the potential customer.

Cost Effective Marketing

Internet marketing can be cost effective (not always). The cost to communicate with potential customers through the Internet is low, which allows the promoter to cost effectively reach customer in large geographic areas. Internet marketing can have a higher cost per transaction (such as advertising on search engines) with a lower overall promotional cost. This is because the advertiser may pay for the transaction cost rather than the presentation, which can result in lower overall marketing costs.

Changes in Internet Marketing

Since many of the Internet marketing programs and metrics where introduced in the 1990s, they are still relatively new and continuously changing Marketing techniques that may have worked well in the late 1990s may have decreased in effectiveness or even be not usable now.

Promotion Saturation

Promotion saturation is the over promotion of a product or service. When consumer is overwhelmed by media promotions, they become desensitized and ignore or bypass advertising promotions. This results in much lower response rates. An example of promotion saturation is the overuse of banner ads. As a result, the click through rate for banners ads has decreased to below.

Customer Ad Filtering

In response to over promotion, customers are setting up ad filters (such as SPAM filters) to remove unwanted promotion messages. This means that it is getting much harder to reach prospective customers even when the ad is actually sent to their address.

Shift to Pull Marketing

Marketing programs are shifting from one-way broadcast promotions (TV, radio, and magazines) to interactive advertising (Internet portals ads and search marketing). The revenue streams for pull marketing programs are increasing by more than 70% compared to stagnant or decreasing marketing dollars spent on traditional broadcast media.

Increasing Internet Marketing Costs

An example of increasing Internet marketing costs is the pay per click cost trend in adword marketing programs. When they were introduced in the early 2000s, the cost per click was low (about 5-10 cents per click) and the response rates (2% to 5%) were high. As adword marketing programs evolved, the cost per click has increased (now over 50 cents per click) along with the cost of fraud while the response rate (about ½% to 1%) has decreased.

By Lawrence Harte