Contextual Commerce

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E-commerce and mainstream use of the Internet are still in their infancy, but already they have overloaded us with choices. To be heard amid the din of competitors, start-up e-brands have no choice but to try to scream the loudest. In a dot-com company's initial stages, profits aren't even in the picture; share of audience is what's important.

The futures of retail and advertising are heavily bound up with the fortunes of the e-brand. And dot-com spending reflects that. In Britain, industry estimates suggest that up to 55% of start-up funds are spent on marketing. In the U.S., advertising campaigns for start-up companies doubled in value in 1999 over 1998 levels, to an estimated $2 billion.

And yet, nothing compares with the buying and selling "wow" of contextual commerce -- making buying online a seamless experience linked to other, not necessarily commerce-based, activities. Contextual commerce assumes a more fluid relationship among consumers, content and content-connected products.

Perhaps of most importance to marketers, it is based on trust in a brand. In a retail environment in which touch and taste and smell are absent, and in which the sense of sight is limited at best, trust in a brand is the product's greatest source of persuasion.

In a recent survey of perceptions of 250 technology brands by Landor Associates, a division of Young & Rubicam, the strongest brands among Internet users were "gateway" brands: leading PC-related brands, browser-software brands, the most widely used search engines and leading entertainment brands. Examples include Microsoft Windows, Yahoo! and Amazon.com. Search-engine brands, seen as a necessary first stop by many Internet users, were among the strongest in the study.

Specific e-brands earned a high level of awareness and familiarity, according to the Landor study, "either because Internet users have grown up with them, because they have an enduring presence within the home, or because . . . they are used virtually every time the Internet user accesses the Internet."

Brands that scored a high affinity rating appeared to be connecting consumers to the larger Web. In the anarchic and sometimes confusing virtual world, these brands are seen as offering guidance, reliability and direction. By offering this connectivity, Internet products win an emotional premium from consumers that serves to "decommodify" their brands.

The dividends that accrue to perceived Internet connectors have created a race among established real-world brands and e-brands to link up with Internet service providers or create their own ISPs. For example, AOL recently announced plans to capitalize on the strong brand name of Netscape by reinventing it as a free ISP.

Real-world brands that want to give their image an i-makeover can do so by providing customers with free e-mail addresses. Vogue, for example, is set to offer its British readers an e-mail address ending in Vogue.com. For marketers of brands and e-brands, the value of branded e-mail is mind-boggling. It's a form of viral marketing, popping up on desktops everywhere in a form that suggests a personal recommendation of the product.

When the Landor survey evaluated which e-brands were perceived as most appropriate to the Net, respondents once again pointed to those brands that served as a first stop or that pop up on the desktop every time a computer is switched on. These are the brands that succeed in reminding consumers of their function as connectors or entertainers.

The flip side of the premium placed on connectivity appears to be that e-tailers whose sole function is to sell are ignored or frowned on by online consumers. This may be explained by the fact that online shopping is not yet perceived to be an integral part of the Internet experience.

There are obvious exceptions to the rule, most notably Amazon.com, which is highly valued for its convenience, ease of use and customer service. However, while Amazon.com's marketing practices have helped make it a household name, it has yet to see any profits.

The Landor study also found that e-tailers may be deemed "appropriate" if they offer an exciting form of selling that takes advantage of Internet technology -- online auctions, for example, such as those popularized by eBay. These brands benefit by being perceived as going beyond the cash nexus to offer enriched services.

In the disembodied arena of cyberspace, companies are forced to rely heavily on brand attributes to cement relationships with customers. If the anonymity of the Internet makes branding more crucial, it also offers the potential for greater rewards. The e-consumer, forced to build a relationship with a virtual entity, has a heightened appreciation of brand names and attributes. As a result, astute e-brands can quickly build brand personality and an intimate relationship with their client bases.

At the same time, the potential for interactivity allows those companies to negotiate ongoing e-relationships professionally. E-brands astute enough to listen to their customers will find no dearth of ways to do so.

To break through the Internet clutter, a brand must provide compelling reasons for people to visit the site. It must somehow be different from -- and better than -- all the sites crowded around it. A reputation for innovation does not necessarily bring with it market dominance. It must be accompanied by a consistent, meaningful brand message.

Marian Salzman is worldwide director of the Y&R Brand Futures Group.

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