Marketers take Web solutions back in-house

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When executives with J.M. Family Enterprises Inc. looked at their customer base, they saw a market quickly adopting the Internet. And they realized they had to do the same.

So two years ago, the Deerfield Beach, Fla.-based automotive distributorship and financial services company created a department—the Office of the Web—dedicated to handling the company’s corporate and marketing presence online. The department’s vice president and seven staffers work directly with J.M. Family’s 17-person marketing team, which itself has four people who help oversee online marketing. Today, the company dedicates up to 30% of its marketing efforts toward online.

Creating experts from within

The Internet has single-handedly changed how corporate marketing departments are organized and function. With the Web no longer the mystery it was just a few years ago, companies are electing not to outsource all their online marketing needs. Instead, they’re bringing the work in-house, building and staffing departments and creating their own areas of expertise.

Dedicated Web or interactive marketing departments have grown in recent years. According to an annual survey by the Association of National Advertisers, 65% of respondents in 1999 housed online marketing in their advertising/marketing services departments, compared with 56% in 2000.

Significantly, 12% of respondents last year said these efforts were run out of the e-marketing, e-business or e-commerce departments—areas not even mentioned in the survey a year earlier.

"Companies are clear that they absolutely have to have an integrated approach to marketing across different media, including interactive," said Laurence Bunin, CEO of Handshake Dynamics L.L.C., a management consultancy specializing in corporate growth and change issues.

At J.M. Family, the marketing operation can coordinate online and offline efforts and knows the emerging needs of the online market, said Rosie P. Burkman, assistant VP-financial services marketing with Jim Moran & Associates Inc., the J.M. Family division that handles financial and insurance products and services for about 1,400 automotive dealers nationwide.

"We have a terrific pulse of online customer today," Burkman said. "We set up a corporate Web initiative early on to make sure we’re at the forefront of the business and had dedicated talent and technology to stay ahead of the game." Fully half the Office of the Web department was recruited from outside the company.

At many companies, the catalyst for changing the marketing organization stems from the need to incorporate both corporate and product marketing efforts into a single department. At many places, the development of the company’s online apparatus includes disciplines such as marketing message development, database management and the various technologies around the distribution of information.

But creating this kind of in-house, interactive marketing department requires support from senior management and, often, the leadership of a single executive.

"These moves need to be enterprise driven. It cannot be done through factions," Bunin said. "It’s less about organizational structures, and more about the role of corporate governance, policies and guidelines and getting people singing on the same page."

At J.M. Family, for instance, the creation of the Office of the Web was embraced and supported by company Chairwoman Pat Moran. That cut red tape, opened the organization to information sharing and created a shared mandate.

This is also the story at Toledo, Ohio-based glass manufacturer Pilkington North America, where interactive marketing has evolved over the past two years.

Not only do the online marketers work closely with company’s systems technology department, where staffing was increased to handle project requests from various business units for e-commerce sites, but business segment leaders and product managers in the company’s commercial, residential and specialty glass divisions work with the online specialists to set the strategic direction for both online and offline marketing.

"That’s why it’s so easy for us to work hand-in-hand," said Jim Gildea, director of marketing-building products. "You have the key decision-makers heavily involved in the process."

Moving with the customer

The strategy at Pilkington has been to augment existing marketing staff responsibilities with new online marketing tasks.

Pilkington works closely with The Lauerer Markin Group Inc., its advertising shop, for traditional and interactive marketing. Together, client and agency built an internal online marketing group that met the needs of a shrinking sales force that was covering larger territories, said agency President Ken Lauerer.

The catalyst for change was driven by a shift in Pilkington’s customer base, Lauerer said.

A new generation of architects, the primary decision-makers in glass products used in building projects, has arrived with professionals who are skilled in using the Web to select building materials. Two years ago, online marketing efforts were just 10% of the business. Today it’s 30%, and could hit 50% two years from how, Gildea said.

"The days of the salesman pounding the pavement with an armful of samples is on its way out," he said. "The reps will carry CD-ROMs around, and even those will be outdated. With one phone call, the Web site can be changed in 20 minutes."

Organizationally, no single employee is dedicated to interactive marketing at Pilkington. But a marketing analyst within the company has been shifted to oversee market communications for interactive. And the company’s market planning manager, who used to handle market research and sales reporting, now oversees the larger function of management of the Web site and e-commerce team.

FedEx delivers a new title arrived online in 1994. But it wasn’t until fall 1998 that the company created its interactive marketing unit. Today, online marketing comprises about 20% of the company’s b-to-b marketing efforts.

Before deciding how to handle its internal online marketing efforts, FedEx in 1997 researched its customers about acceptance of online media. They found a sophisticated audience that was already doing business online with the company, if only to track packages and find information.

Still, FedEx didn’t add staff to create the unit. Instead, it redirected some of the existing marketing team’s workload. Today, a staff of Webmasters posts content from another staff of content providers, the latter working across both online and offline media.

Despite years of expanding its Web presence, FedEx is only now considering a new kind of marketing title dedicated to new media. With the nod of senior management, FedEx’s 2001-2002 fiscal marketing budget calls for a new post, tentatively called the "new-media specialist."

That job likely will be to steer the company’s online marketing and media efforts, said Steve Pacheco, manager-advertising for FedEx Services, the sales and marketing arm of the company.

Even today, FedEx’s message concepts are developed internally, although it works with Digitas Inc., New York and Boston, for its online b-to-b trafficking and measuring efforts, Pacheco said.

The online unit reports to the advertising group, which in turn reports to Pacheco’s team and the international marketing groups. This ensures the domestic and global marketing units have access to and a voice in the online message development, Pacheco said.

Sweet plans for berry maker

Two years ago, Driscoll Strawberry Associates Inc., the Watsonville, Calif.-based berry producer and wholesaler, drafted a 75-page strategy paper about its conversion to a dynamic Web site, e-commerce and online marketing program.

The plan included beefing up Driscoll’s information technology ranks and bringing its online efforts inside.

Today, the company’s eight marketing staffers are supported by an IT team well versed in online marketing, said marketing director Mark Munger. One of the eight marketing staffers serves as an electronic marketing coordinator and is dedicated to online marketing efforts. All report to Munger.

Indeed, the marketing team turns to the IT staff for guidance on how to best implement interactive marketing initiatives. One example is the company’s current "Berried Treasure Club" online promotion, which gathers customer information and builds a database for future marketing efforts between the company and grocers and even consumers nationwide.

Indicative of the cross-pollination between marketing and IT in the age of the Internet, the company’s marketing team has been exposed to online marketing, and half have been cross-trained in interactive marketing practices. They frequently will sit with the IT staff when sites or initiatives are being programmed on the computers, just to see how the work is being accomplished and what thinking is going into it, Munger said.

"That’s what’s going to allow us to bridge this gap [between IT and marketing] to have a fully dynamic site," Munger said. "It creates a link at the hip between the marketing department and the IT department. There are still times that you almost cannot tell the difference."

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