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Using the Net: Direct sales vs. branding

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Direct sellers seem more poised than brand advertisers to take advantage of the inherent benefit of the Internet As marketers mull how much to invest in Internet advertising, they would do well to consider this: The Web, according to many experts, is shaping up to be more effective for direct sales than branding.

Many marketers are finding that's true and are shifting money into Web ad campaigns designed to spur direct sales.

The Internet, says Stan Rapp, president-CEO of McCann Relationship Marketing, New York, does not reach enough people and it is still primarily a text medium, while branding is a visual process.

"There are much better media such as network TV, where the visual element enables you to create a perception of a brand," Mr. Rapp says.

$300,000 IN WEB ADS

As an example of Web-driven direct sales, Wayfarer Communications, Mountain View, Calif., which makes Incisa push technology software, is spending roughly $75,000 per quarter to place ads on the Web sites of Business Week, PC World, The New York Times, DoubleClick and Pathfinder to drive traffic to its site so users can download an Incisa demo.

"Demo downloads become concrete leads to follow up on," says Bob Schoettle, VP-marketing at Wayfarer.

Of course, companies can build brand and drive sales at the same time.

To do this, they buy banner ads on high-traffic sites, such as Yahoo and Lycos, and they target industry sites with specific campaigns to drive sales.

PROBLEMATIC PROPOSITION

Lucent Technologies is splitting Web ad money between branding and direct sales campaigns, says Kent Miller, corporate advertising director for Lucent.

But brand-building remains a problematic proposition.

"Part of the difficulty is that we don't have a good feeling for how effective [Web advertising] has been," Mr. Miller says.

While Lucent has placed banner ads on some business technology publication sites to create brand awareness, it is spearheading some new direct sales campaigns that are specific to certain areas of the company, such as Bell Labs.

These companies' plans echo the intentions of a handful of high-tech Web advertisers contacted by Business Marketing, all of whom said driving direct response sales is the most important goal of their Web advertising efforts.

U.S. companies spent an estimated $301 million advertising online in 1996, a fivefold increase from 1995, according to AdSpend data released by Jupiter Communications, New York.

To a degree, the branding problem lies in the numbers.

On average, says Bob Storch, senior VP of Poppe Tyson, New York, 2% of Web surfers click through an ad to a company's individual Web site. While these people may be good prospects, "you won't get 50 million possible impressions on the Net like you can running an ad in a Sunday issue of Parade magazine," he says.

And there are creative concerns, as well.

Banner ads, the online equivalent of billboards, are in many cases creative straitjackets for advertisers trying to imbue any of the persuasive elements that they use in traditional print and broadcast media.

IT'S WHAT YOU SELL

The business-to-business marketers that appear to be having success in driving sales through Web advertising sell information-sensitive products and high-tech goods and services.

But Web advertising, though it provides a different value proposition than traditional advertising, is still often sold using metrics that don't really apply, says Jack Edmonston, editor-publisher of Computer Advertisers' Media Advisor.

"Unfortunately, most Webvertising in the high-tech field is sold on a cost-per-page-view basis," Mr. Edmonston says.

In other words, for a set rate, advertisers are guaranteed that their banners will be seen a certain number of times; advertisers aren't guaranteed that different people will see them.

"When you compare the CPM for page views to the CPM for old-fashioned print ads, it becomes very obvious that this medium should be measured on response -- not on its ability to increase brand awareness," Mr. Edmonston says.

For example, leading publishers Ziff-Davis, International Data Group and CMP Media get $19, $30 and $35 CPMs respectively for a four-color page ad. David Yoder, VP-media at Anderson & Lembke, San Francisco, estimates that, assuming only half of the readers will see the given ad, the cost per thousand impressions ranges from about $40 to $70.

While this number compares favorably with the cost of 1,000 impressions of a banner ad on a high-tech Web site, Mr. Edmonston asks, "Would you rather have 1,000 page views of a small banner or 1,000 people looking at your full-page, four-color ad? It's really no contest. The [print] ad is a better deal if you are measuring the advertising by its ability to increase brand awareness and preference."

INHERENT BENEFITS

Direct sellers seem more poised than brand advertisers to take advantage of the inherent benefit of the Internet: Interacting with customers and prospects.

"We see online advertising as a direct response medium," says Mr. Edmonston. "In direct response, cost per sale or cost per inquiry is the main judge of success."

"Time is as important as information in marketing today," says Mr. Rapp. "And the beautiful thing about the Web is that yesterday's long process of using a medium to elicit an order, take that order, put it into the database, forward it to the fulfillment house, and send out the package is now compressed into one second."

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