People communicate with one another on the Net; they also seek out information on topics of specific interest to them. The challenge for marketers is not how to create communication but rather how to ride the wave. Take one popular form of Internet browser software. The package routinely asks users what kind of communications they want to receive. People will put themselves in affinity groups—they will sort themselves, segment themselves, find other people who share their interests, and initiate conversations—based on their own preferences.
The trick for marketers will be to find the groups that fit their target customer profiles and to ride the wave. Thought of in that way, the marketing potential of the Internet is enormous indeed. But it is not without pitfalls. Keep in mind the big picture. Instead, it is forced through various channels. There are the cable or modem channel, the telephone-company channel, the access-provider channel, and the software channel, to name a few. These channels threaten to become bottlenecks.
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Companies that control a channel have power. As long as we have competition, we can count on customer preferences to prevent bottlenecks—to keep single companies from monopolizing any given channel. If one provider is offering me limited opportunities to explore related subjects of interest, or it is only showing me ads for X company, I can choose a different one.
But without competition, bottlenecks will arise, and they will erode marketing opportunity for all those companies that are not themselves part of the Internet system.
They must be certain that, in the interests of short-term gain, they are not empowering an intermediary to trap them in a bottleneck later on. Donna L. Hoffman and Thomas P. They are also codirectors of Project , a research center at Vanderbilt studying the commercialization of emerging media. There are probably more than 25 million people in the United States over the age of 16 currently using the Internet—and this number is increasing by an order of magnitude on a regular basis. But although the numbers may indicate a commercial gold mine to eager marketers, not all these people are equally avid users of this new interactive medium and not all of them use the Web, which is currently the major focus of commercial efforts.
For example, in August , the most recent available data revealed that only 5 million or so of the then approximately About 6 million Internet users visited the Web only infrequently, and the remaining 5 million never had. If the goal is to make the Web reach critical mass as a commercial medium, then it is most important that marketers focus on how to turn light users into regular users and how to turn all Internet users into Web users as well.
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Accomplishing this is unquestionably an issue of how to make browsing the Web an entertaining, enjoyable, and worthwhile experience. Right now, for many people, the interactive experience is simply too intimidating. How can marketers fix the problem?
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The answer, we believe, lies in a concept called flow , originally developed by Mihaly Csikszentmihalyi of the University of Chicago and his colleagues. We define flow as what happens during network navigation when consumers find themselves interacting with a seamless sequence of responses the clicks and keyboarding that characterize interacting with the computer , having fun, becoming totally absorbed in the interaction, and enjoying the experience enough to want to do it again and again.
The benefits of being in flow include increased learning, more exploratory and participatory behavior, and more positive subjective experiences. In other words, consumers who are truly in flow are more likely to retain what they are exposed to on-line, to stay longer at the sites they visit, to visit more pages at a site, and to have a more positive attitude toward the interactive experience and the specific companies with which they are interacting.
In practical terms, this means that consumers who are in flow are more likely to remember your brand and your company and to feel good about both. They are more likely to come back, visit again, and engage in a desired marketing response. Thus an important marketing objective of a commercial Web site is to facilitate the flow experience.
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Socializing encourages flow, so companies might consider integrating virtual interactive communities into their Web applications. Or a company might think about analyzing the referring links, since the flow experience is also influenced by where visitors come from. Of course, marketers will doubtless ask just when all this effort to increase flow will increase their bottom lines.
The payoff will come when flow is facilitated. Right now, attracting people to the Web is a priority. And doing so is more about offering an engaging experience that will encourage people to learn how to use the medium and get comfortable with it than it is about applications like home shopping a truly punishing experience at modem speeds of We believe that the World Wide Web has great potential as a marketing entity.
But before companies can expect to cash in, they have to work on the basics. George S. Day is the Geoffrey T. For those companies whose managers write—and exploit—the new rules of the game, the evolution of interactive marketing in an electronic medium will be exhilarating. But for most existing organizations, it will be nerve-racking at best. Most companies believe that they must participate in electronic commerce.
Their first reason is defensive. Their second reason is the flip side of the first: if electronic commerce takes off, it will be too profitable to ignore. Unfortunately, the chances of an incumbent—an established, large company—prevailing in the new electronic marketplace are slim. Such companies are prone to falling into several common traps.
The emergence of a challenging technology like interactivity is seldom a surprise. After all, most managers attend industry conferences, read the trade press, buy consulting studies, talk with their customers, and generally monitor developments in the field.
The problem is, all those venues tend to offer conflicting opinions. And although some managers can cut through the confusion and see clear and compelling possibilities for their organizations, many become muddled. As a result, they are simply unable to see beyond the limitations of the crude early applications. To be sure, the early stages of technologies are often marked by diverse approaches, ambiguity over which design or standard will prevail, and uncertainty about customers, competitors, and marketing costs and concepts. It is natural to delay or to scale down efforts until the future is clearer.
Conventional financial-evaluation approaches can also impede new investment because they fail to factor in opportunity costs or the unanticipated options that become available only if the investment is made. In the meantime, another company could very well take a chance and hit on a winning strategy, much as Nokia did in its successful bid for leadership in the cellular telephone industry when it gambled on digital technology.
Indefinite delay—or indefinite cautiousness—may result in stagnation and missed opportunity. To avoid this trap, try to lower the risks of your venture. The odds of picking the wrong technology or interactive approach go up:.
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The culture, risk-avoidance tendency, and controls of an existing structure can be stifling to a new initiative. Senior managers, rightfully concerned about the possibility of cannibalizing existing revenues or about resistance from channel partners or even customers, may hold back from making follow-up commitments after their initial investment in a new technology. How can this trap be sidestepped? Large companies should consider setting up separate organizations specifically designed to pursue the new endeavor.
The objective of organizational separation is to create a boundary that enables the new group to do things differently while still permitting the transfer of resources and ideas from the parent. That would make it feasible for the company as a whole to attack and defend at the same time. Of course, setting up a separate organization brings with it its own set of decisions, chief among them figuring out how much independence is necessary should the new entity be a separate unit?
Novel answers to those questions are emerging as companies take the data networks that make interactive strategies possible and use them to manage dispersed information sources and decision making. Large companies have little patience for continued adverse results, surprises, and the dashed hopes that are so often experienced during the gestation of a new technology.