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No One Said This Would Be Easy

  |  May 12, 2006   |  Comments

Online is an ever more important marketing channel. That doesn't mean it's getting any easier for marketers or advertisers.

Yahoo released research yesterday that examines at how the Internet has changed consumer shopping habits. It should come as no surprise to marketers -- or anyone with Web access, for that matter -- that the Web enables a large majority of consumers to mine the information that helps shape their purchase decisions.

The questions, as Yahoo sales head Wenda Harris Millard put them, are: "How, why, and what do we as marketers do about it?"

Yahoo's findings certainly underscore the critical nature the Internet plays in the buying and selling of nearly everything consumers buy these days. Yet a series of presentations and discussion around the findings by marketers and analysts at yesterday's Yahoo Summit also emphasize that the size and complexity of the fundamental problems facing marketers, advertisers and organizations working to leverage the online channel. Far from being solved by digital media, these issues are all very much alive, kicking and very possibly growing.

"I don't need to hear from you," snapped Dr. Don E. Schultz, professor emeritus-in-service of Integrated Communications at Northwestern University. Speaking in an ad-barraged consumer's voice, Dr. Schultz continued, "If I need something, I'll go get it."

"It's a radically different marketplace," Schultz continued. "The supply chain has changed to a demand chain."

Dr. Schultz recommends something you've heard before: that organizations re-tool to become truly consumer-focused and respond to consumer demands. "Easier said than done," whispered Wunderman SVP Strategy, Len Ellis, in my ear -- doubtless echoing the sentiments of many of the assembled.

Push Your Agency Out of the Way

Here's what consumers are doing out there. More than two-thirds of shoppers across a number of product categories still make most of their transactions at physical cash registers, Yahoo and research partner OMD found. Yet 62 percent of them use a combination of online and offline sources to gather information before they buy.

"Social shopping" has become central to the decision making process. Online, there are reviews, of course, along with price comparison sites and tools, as well as communities that facilitate coupon swapping and sharing. Mobile is having a remarkable influence on this relatively new social phenomenon.

Not only are consumers calling wives, husbands, parents and friends from the store to check in on brands and products they're considering (Right color? Will it fit on the kitchen counter? What's the price in the store across the street?), they're also text-messaging and snapping pictures to upload to friends and partners for instantaneous consultation.

We watched a man relate on video how he bought a gift for his wife. She shopped with a friend and admired a Banana Republic sweater, which she told him about later at home. Hubby called the friend on his cell phone to make further inquires. As they spoke, the friend instantly went to BananaRepublic.com, found the sweater, and told him which style it was. He visited a physical store and bought it.

That's technology-enabled social shopping. How should marketers deal with it?

"Push your agency out of the way," insisted John Nardone, chief client officer at MMA, in the day's most controversial statement. "They're your single biggest barrier to measurement."

Get Beyond Demographic Targets

Only 47 percent of consumers say traditional advertising helps them to make a decision about products or services. After word-of-mouth (80 percent), the Internet and search (64 percent and 74 percent respectively) beat everything but coupons when it comes to sealing a deal, narrowing options, deciding where to buy and researching decisions. The Web and search (broken out separately in this study) are the sources consumers keep coming back to as the make their decisions -- over four times, on average.

What are marketers to do in this information-heavy environment? "Get beyond demographic targets," is sage advice from AC Nielsen's Steve Warshaw, who oversees the Homescan Media Group. "Don't see the world as women 18 - 34." If you're selling a soft drink, advises Warshaw, get in front of people who buy soft drinks -- whoever they are.

Of course, people who buy soft drinks don't require a whole lot of information. That's why Yahoo assembled a panel of high level marketers from high-consideration verticals (automotive, consumer electronics and finance) to discuss the findings. The dichotomy they face is rooted in Schultz's edict: "The supply chain has changed to a demand chain."

On the one hand, marketers including Charles Schwab CMO Becky Saeger and Gene Kelsey, VP Brand Strategy Group at Panasonic, lauded the Web for the depth of information it can provide to customers and prospects. Kelsey noted that even in the early days, Panasonic never considered the Web as a sales channel.

But integrating the online experience with offline brand touchpoints, particularly stores, face-to-face meetings and dealerships, is where control begins to erode for these brands (a sentiment echoed by GM Planworks' Mary Carpenter). If marketers weren't having enough trouble maintaining control online, Yahoo's study seems to indicate off- and online integration requires even more coordination than before.

How many brands can you name that are doing that right? I can think of, oh┬ůmaybe three.

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ABOUT THE AUTHOR

Rebecca Lieb

Rebecca was previously VP, U.S. operations of Econsultancy, an independent source of advice and insight on digital marketing and e-commerce. Earlier, she held executive marketing and communications positions at strategic e-services companies, including Siegel & Gale, and has worked in the same capacity for global entertainment and media companies, including Universal Television & Networks Group (formerly USA Networks International) and Bertelsmann's RTL Television. As a journalist, she's written on media for numerous publications, including "The New York Times" and "The Wall Street Journal." Rebecca spent five years as Variety's Berlin-based German/Eastern European bureau chief. Rebecca also taught at New York University's Center for Publishing, where she also served on the Electronic Publishing Advisory Group. Rebecca, author of "The Truth About Search Engine Optimization," was ClickZ's editor-in-chief for over seven years.

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