$137.8B U.S. ad spend for top 200 advertisers
By having banner ads displayed on the desktop computers of employees accessing their company's intranet, marketers believe they will have a direct pipeline to highly qualified prospects.
Imagine the possibilities: Legal book publishers could advertise on law firms' intranets. Software makers could put banner ads on any application development company's intranet. Retailers and grocers could advertise on local companies' private networks.
At the same time, the number of corporate intranets is exploding. Sixty-four percent of Fortune 1000 companies already have an intranet, according to Forrester Research, Cambridge, Mass. Another 32% are building an intranet.
"It's a fascinating business model," said John King, director-technology group at Blue Cross Blue Shield of Massachusetts, Boston, which is trying to enroll customers in benefits plans through an online health network accessible through corporate intranets.
Using corporate intranets, "You can begin to do one-to-one marketing and your success [reaching qualified prospects] will be much greater," said Patrick Flynn, VP-systems development at apparel maker Fruit of the Loom. The Bowling Green, Ky., company in the past two years beefed up information systems efforts to achieve more technology-driven marketing.
INTRANET ADS ARE RARE
While marketers are excited about possibly reaching select audiences, they're not rushing out to buy ads on corporate intranets. Nor are many companies actively selling ad space on their private networks.
According to a recent ComputerWorld poll, just four of 100 information systems professionals said they sell ads to help finance their intranets, although 10% said they would consider selling ads.
For now, both sides are weighing how to take advantage of the technology and create an effective marketing model.
Blue Cross Blue Shield of Massachusetts, for example, is participating in Healtheon, an online healthcare network created by venture capital firm Kleiner Perkins and Netscape Communications Corp. CEO Jim Clark that selected companies access through their intranets.
Employees can get information on premiums and benefits, and sign up for medical coverage. "As you end up with Internet-enabled, informed consumers and can give people better information related to your products, hopefully it will improve business," said Mr. King.
Healtheon is Blue Cross' only intranet marketing so far, though it does provide medical-industry information to healthcare providers through an extended intranet, or extranet, Mr. King said.
Meanwhile, Fruit of the Loom is discussing ways to use corporate intranets to deliver company and product information to distributors.
The apparel maker is in the midst of rolling out a real-time inventory system for its distributors, using proprietary software that dials its intranet to acccess inventory.
Fruit of the Loom plans to use PointCast's push software to deliver timely information such as inventory reports and new-product news, which come from its intranet, straight to distributors' desktops. The I-Server software broadcasts information to users' desktops using a computer screen message .
"These are the folks who make decisions about buying on a day-to-day basis and they can control millions of dollars," said Mr. Flynn.
"Whatever I can do to sway that person will have additional benefits," he said, adding that whenever the Fruit of the Loom logo and information pop up on distributors' computer screens, it adds value.
Some companies are evaluating selling ads to help finance their efforts. First Chicago NBD Corp. is assembling a business case for management to invest in a corporate intranet. "The major issue all companies have with intranets is funding," said Mark Gallagher, first VP-technology administration at First Chicago. One funding model for the bank's intranet includes charging departments for intranet usage. The other involves selling ads.
Mr. Gallagher envisions the following types of intranet advertisers:
But he says there are some concerns about intranet ads, such as breaching corporate policy about acceptability of images displayed on computer screens in public places and being a nuisance to employees.
"I would imagine a number of employees wouldn't like to see advertising on their PC," said Mr. Gallagher. "They might view it as an intrusion."
This story originally ran in the April issue of Advertising Age's Business Marketing.