As the price of growing an Internet business escalates, cyber brands are aggressively trying to secure their positions and lock in new users with TV, radio, print and outdoor campaigns.
This month, CDnow begins the first advertising as part of a $22.5 million commitment on MTV and sister network VH-1 over the next three years.
Women's site iVillage recently broke its first national TV campaign, created by DDB Needham, New York, and online community Tripod kicked off its first consumer campaign, which includes outdoor graffiti-style posters. Outspending many of its rivals is online community theglobe.com, which launched an $8 million campaign in March.
MAKING NOISE WITH LESS
A year ago, only major brands like Yahoo!, America Online and Excite were extensively marketing offline. While these newcomers to traditional media aren't spending heavily on network prime-time TV, they are making noise by stretching their dollars with spot TV, print and outdoor campaigns, all woven with online media.
For instance, CDnow plans to use its position as the exclusive online music retailer of the MTV Music Video Awards in September to integrate online promotions as it did for the Grammy Awards, said Jason Olim, co-founder and president-CEO at CDnow. "We advertise during the telecast to create demand, and then channel that demand to bring people to their computers to buy albums," he said. During the Grammy's, CDnow halved the price on 81 titles from award-winning artists. Mr. Olim said 60% of the orders during the show came from new customers.
CDnow, whose agency is Hampel/Stefanides, New York, also has first dibs on advertising on MTV programs. For instance, CDnow could advertise on VH-1's "Behind the Music" rock musician documentary series, then discount the profiled performer's albums.
Offline branding is also key to generating traffic. Internet community Talk City launched 30-second commercials on network TV in March for its home pages product. Its TV agency is Markman, Tankersly & Balser, San Francisco. "We found that the TV ads tend to have a three- to four-day clear halo around increase in usage and in terms of home page sign-ups," said Christopher Escher, VP-marketing at Talk City, noting that it now has 400,000 home pages.
Susan Berkowitz, director of sales and marketing at theglobe.
com, also sees a direct correlation between its campaign and new memberships. Its commercials, created by Kirshenbaum Bond & Partners, New York, broke in March on cable in New York, San Francisco, Seattle, Boston, Denver and Atlanta. The campaign also includes outdoor and national print ads. According to Media Metrix, theglobe.com had 1.7 million unique visitors in March; in April that number rose to 3.5 million and in May it was 5.2 million. " I'm convinced it's a result of this campaign," she said.
"By the time someone gets online, it's preaching to the converted," Ms. Berkowitz said.
Spending for cyber brands is up overall, said Evan Neufeld, analyst at Jupiter Communications, who estimates Web brands are spending between $6 million and $10 million on traditional advertising this year, compared with between $3 million to $6 million in 1997.
MORE BANG FOR THE BUCK
"I think they're not only spending more, they're trying to get the most bang for their buck," Mr. Neufeld said. "They understand what integrated marketing is. An Amazon.com is much more likely to execute a tightly integrated campaign than a barnesandnoble.com," he said because it has a more vested interest. "It's the difference between slapping a URL on a commercial and making a spot that's all about the Web site."
Copyright July 1998, Crain Communications Inc.