As the industry debates where marketers should spend their online dollars--on Web site development or online advertising--Jupiter Communications proposes a new strategy that advises marketers to allocate Web dollars based on a brand's offline positioning.
In a report to be released today, Jupiter says marketers should employ a "brand action marketing" strategy to simultaneously develop brands online while driving transactions on their Web sites.
Jupiter proposes that a company divide its online resources based on whether the marketer is an indirect seller, a direct seller or a retailer in the offline world.
DEBATE: SPEND ON WEB SITE OR ADS?
The approach takes the middle ground in the ongoing debate between Web sites selling advertising and developers pushing Web site spending as the most effective use of a marketer's online budget.
"Are people so caught up in building Web sites that they're forgetting about the media?" said Richy Glassberg, senior VP-general manager at Turner Interactive Marketing & Sales.
Mr. Glassberg compares Web advertising to the TV model, in which marketers typically spend much more on the TV media buy than on producing commercials.
He argues that some marketers, rather than investing heavily in Web sites, could more effectively market online through banner advertising and micro-sites.
However, those with a stake in the Web development business naturally disagree with this view.
"People who just focus on buying eyeballs are selling things very short. This isn't TV," said Tim Hanlon, associate director at Frankel & Co. Digital Marketing, Chicago, who proposes an integrated approach to online marketing, including site development, media buying and promotions.
In its report, Jupiter defines three groups of marketers: indirect sellers of products, from lower-differentiated brands such as Wrigley's gum to higher-differentiated brands such as Nike shoes; direct sellers of products and services, such as MCI long-distance; and retailers.
LIFESAVERS SHOULD FOCUS ON ADS
According to Jupiter, indirect marketers should spend more on online media than on site development--roughly 75% on the former and 25% on the latter, according to Peter Storck, director of Jupiter's online advertising group, which wrote the report.
"When it comes to LifeSavers, Richy Glassberg is right," said Mr. Storck. "LifeSavers should be focusing more on media than on building their own Web site."
That's because consumers generally don't need much information for this type of purchase, and probably won't spend much time on brand sites, Mr. Storck said.
"Forget about [LifeSavers' Web site] candystand.com trying to be an entertainer competing with the likes of Disney and Viacom," he said. "They are going to lose in the entertainment business. They make candy."
On the media side, indirect sellers should focus on co-op advertising and in-store displays to build brands and lead consumers to retailer sites to buy products.
For example, a banner ad for both Wm. Wrigley Jr. Co. and Wal-Mart Stores would take consumers to an in-store display featuring Wrigley's gum on the Wal-Mart site. The media buy for Wrigley's would involve premier positioning on the Wal-mart site.
In the second category, direct sellers of products such as cars, airline tickets and long-distance service should spend equally on Web site development and media.
Moreover, direct sellers need to focus heavily on sales support and service, since the brand site is the primary place where transactions will occur, said Mr. Storck.
BRANDING AND DRIVING ACTION
On the media side, direct sellers should focus on branding and driving action through banners, sponsorships and interstitials.
Finally, retailers have the most to lose due to online competition, Jupiter said. While their offline advantage is giving consumers a conveniently located place to shop, that advantage is eroded by the advent of online stores such as Peapod and amazon.com, although there is not yet a blockbuster online retailer, Mr. Stock said.
To effectively compete, retailers, like direct sellers, must spend equally on Web site development and media, Jupiter says, focusing on sales support and service, as well as customization, on the site side, and on co-op advertising on the media side.
"Wal-Mart needs to spend more on online marketing than Wrigley's," said Mr. Storck. "They have to have a really kick-ass site with all kinds of complex functionality, and they also have got to drive traffic like crazy."
UNIQUE SELLING PROPOSITION
"What this report does is answer the question in the debate between banner advertising and direct marketing," said Rishad Tobaccowala, president of Leo Burnett's Giant Step interactive agency, Chicago.
"Both things are important, and the way you skew your marketing mix depends on your objectives."
However, Mr. Tobaccowala said, "There's very little discussion about the user, and whatever is said is likely to be obsolete in about a year."
Mr. Glassberg added, "Every single marketer and advertiser must look at their unique selling proposition and use the Web effectively for what their brand's strategy and goals are. It's too huge and too complicated to say everyone should do it one way."
Copyright January 1998, Crain Communications Inc.