NONE: ONLINE-ADS>> Day 1 - Forrester Forum Coverage by ClickZ
ONLINE-ADS>> Day 1 - Forrester Forum Coverage by ClickZ
richard_at_tenagra.com
Wed, 7 Oct 1998 13:31:51 -0500 (CDT)
Below is a special mailing to The Online Advertising Discussion
List about the Forrester Forum, written by Ann Handley,
editor-in-chief of The ClickZ Network. You will receive these
reports in addition to your normal Online Ads posts/digests.
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Forrester Forum:
Making Internet Marketing Pay Off - Day 1
Friday, October 2, 1998
Ann Handley
Editor in Chief
The ClickZ Network
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>From the start of its internet marketing forum, which kicked
off yesterday in New York, Forrester made it clear that it
would offer up specifics to the (mostly) Fortune 500 crowd
in attendance. The marketers in the audience wanted answers
to the who's and how's. And nearly without exception,
Forrester delivered answers to critical questions like: Who
is online? What sort of experience are those users looking
for? How do marketers best reach them? How do you avoid
stupid (and costly) marketing mistakes?
Consistent with the nature of its business, Forrester didn't
exactly offer how-to advice; the content of the Forum was
more strategic than tactical. But it dished out lots of food
for thought that attendees could take home in virtual doggie
bags, and apply to their own efforts to tap their virtual
audiences and turn them into real customers.
"What we are on the cusp of is a fundamental change in how
you are interacting with your customers," pointed out
Forrester's Bill Bass. The media companies have always
controlled traditional marketing efforts -- for example, to
reach a critical mass of customers in the greater Boston
area, advertisers have been beholden to the likes of the
Boston Globe and its media brethren.
Not so with the web. "Now, marketers have a direct
connection to their audience," Bass said, "giving a new
level of importance to how web marketers interact with their
audience."
What's really different about the market is that the diffuse
web audience has certain expectations about its online
experience. Users expect real-time experiences -- would-be
car buyers contacted within a day of expressing interest in
a certain make and model are five times more likely to buy a
car than those who are left to languish for two days or
more.
"If you're not ready to respond within a day," Bass implied,
"it's time to pick up your ball and go home."
Itching For Commerce
So what's it going to take to get people to really embrace
the web as a commerce vehicle? You know the phrase... time
indeed does heal all wounds. As more and more people come
online and mature into the medium, they'll naturally
progress to the next stage of buying their books, music,
clothes, and -- yep! -- cars online, said Forrester's
Shelley Morrisette.
Of course, the perennial issues of privacy and security
perceptions also contribute to a buying gap. And part of the
problem, too, is access. The higher the modem speed a user
has, the more likely he or she is to transact, Morrisette
said.
But certain segments of the market represent real growth
potential online. Specifically: some 38 million
higher-income career-minded technoids, "new age nurturers"
who represent a rich market for online groceries and
children's software, and 20-somethings seeking entertainment
in cyberspace, Morrisette added. It's all a matter "of
tapping into their motivations," he said.
The Good, The Bad And The Ugly
Which sites do commerce right, and which sites are wannabes?
According to Forrester's Maria Kadison:
Doing it right: iQVC.com (http://www.iqvc.com/)... clear
navigability, excellent options.
Wannabe: Hallmark.com (http://www.hallmark.com/)... site
navigation based on two methods -- confusing and
frustrating.
Doing it right:NECx.com (http://www.necx.com/)... easy to
research electronics goods.
Wannabe: Wal-mart.com (http://www.Wal-mart.com/)...no less
than 8 clicks and plenty of irritating prose to complete an
online purchase. Roxy.com
(http://www.roxy.com/commerce/roxy.cgi)...does not know how
to close the gap online.
Doing it right: CDnow.com (http://www.CDnow.com)...kicking
butt in the music arena.
Wannabe: (http://www.TowerRecords.com)
TowerRecords.com...downright chicken to undercut its
brick-and-mortar stores. Online, for example, the Lilith
Fair CD was more than $5 more than the CDnow or its in-store
price.
>From The Seller's Mouth
A Q&A session with two online retailers,
J.Crew (http://www.jcrew.com/) and N2K
(http://www.n2k.com/index.html/), was both revealing and
instructive. As the audience fired questions at the pair,
Forrester organizers wisely decided to abandon the planned
audience discussion forum and let the obviously hungry
audience fill up on answers to their questions.
Some highlights:
Brian Sugar of J.Crew.com believes a portal affiliation is
critical to really get serious selling on the web.
Especially, he said, an AOL affiliation. When J.Crew.com was
featured on the Welcome screen into AOL for a single hour,
sales for that day doubled that of J.Crew's top-producing
retail store...for any day in the retail store's history.
More love notes for AOL came from N2K's David Packman. N2K
paid $18 million for a three-year slotting fee to be
included in AOL's shopping channel, yet it still believes it
underpaid for the value that spot delivered. Why? AOL
customers convert two to three times faster than the average
customer, because AOL has done such a good job educating its
customers about online shopping. Said Packman, those in the
online commerce market "have to cover half your market." You
have to get the beachfront real estate.
Packman also calls email the "killer app" of the web. It's
the most cost-effective way to market, and by far the most
effective...when it's done right. Web-wide, the rate of
conversion to sales is roughly 2 to 4 percent. But targeted
email can see conversion rates of 30 to 60 percent, Packman
said.
Forrester Fun Facts
Size of online market: 55 million
Those who use email: 46 million
Those who perform searches: 37 million
Those who research online: 25 million
Those who access the 'net through media portals: 16 million
Do you have a global message? Approximately 30 percent of
traffic to US sites originates internationally, breaking
down thusly:
...36 percent European
...28 percent Asian
...26 percent Canadian
....6 percent Latin American
Number of households online: 27 million
Number of households who regularly transact commerce online:
6 million
The More Things Change...
Most trafficked sites worldwide:
Yahoo.com (US) (http://www.Yahoo.com)
Yahoo.fr (France) (http://www.Yahoo.fr)
Yahoo.jp (Japan) (http://www.yahoo.co.jp/)
Valuing Your Audience
How do you value your database of names and addresses that
is the core of your business? Forrester's Bill Bass
recommends that businesses ask themselves what it would cost
to replicate that database without the internet? If a
business has 1.6 million individuals in its database, for
example, it would need to contact 80 million individuals to
replicate that reach (based on a 2 percent response rate).
At a buck a name for the original list, that 1.6 million
name database is worth a cool $80MM.
Marketing Redefined
"creeping registration" -- The preferred approach to
collecting data from visitors to a site. With creeping
registration, visitors move through the site, releasing
tidbits of information about themselves without needing to
be confronted with an initial registration form.
"data dude"-- An information-gatherer of data online
Quotes Of The Day
"More money is lost in bank robberies in LA each year than
is lost online [in commerce transactions]."-- Shelley
Morrisette, Forrester
"We have to be careful with that database. It's a little
like stalking a consumer. It's like someone showing up in my
garage and saying, 'Hey, I saw you at the supermarket, I saw
you at the school, and those sure are cute girls you've got
there'... I mean, we'd freak everyone out." -- Bob Pittman,
AOL, speaking about the use of the datamine of information
available to his company
"Speed is a feature. It's not a service." -- Bob Pittman
"I'd like to be able to pair the latest wool roll-neck with
a Pearl Jam CD. Partnerships are key."-- Brian Sugar of
J.Crew.com, speaking about affiliation among online
retailers
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Copyright (C) 1998 ClickZ Corporation. All rights reserved.
May be reproduced in any medium for noncommercial purposes
as long as attribution is given.
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