Five Challenges E-Marketing Faces

Last spring I was asked to speak to a group of traditional marketers who wanted to learn about e-marketing. Many wanted jobs in e-marketing because they considered it a more dynamic field than the one they were in.

Back then I worked for an agency that was turning away business daily. Preventing us from being overloaded with work was the main challenge facing our director of business development. As you might expect, my presentation to the group focused on e-marketing’s opportunities.

My, how times have changed.

A year later many interactive agencies are laying off staff, and they are much less choosy about the projects they take on. A sense of extreme urgency has taken hold of just about every company in the Internet industry.

Last week I was asked to address the same organization that I spoke to last year. I was happy to see that the audience members retained their enthusiasm for e-marketing. This time, however, instead of talking only about opportunity, I focused on the challenges facing us.

As I see it, these are five challenges that almost every company involved in e-marketing is facing right now:

  • A bad reputation. A lot of money spent on Internet marketing over the past few years was wasted. Why? One big reason is that the stock market distorted company valuations and rewarded (or at least failed to penalize) profligate attempts to drive traffic or acquire customers — even if only temporarily.

    Now e-marketing has a bad reputation. And half-baked metrics such as click-through rates (CTRs) still paint a picture of inefficacy and failure. Plenty of evidence shows that the Web is the most cost-effective branding medium available, but the Net’s reputation will need to be rebuilt one success at a time.

  • Marketing integration. Most major marketing efforts utilize multiple channels, on- and offline. Email, Web advertising, and viral Internet marketing should serve concrete, measurable objectives as part of an integrated campaign.

    But coordinating e-marketing with other marketing efforts is an underdeveloped art. Some companies have successfully linked the Net to under-the-cap promotions or to teaser campaigns for new product launches. But all too often the Internet is tacked on at the end of a marketing plan. Determining the strengths (and weaknesses) of the Net relative to other channels is a project we all should be working on.

  • E-CRM. Imagine recognizing the needs of customers as they enter your site. Over time, through implicit and explicit data, you learn about the preferences of each and can serve customers based on their habits, needs, and purchase drivers. You build deep loyalty, and you increase your share of your customers’ wallets.

    You’ve probably heard that vision pitched dozens of times. So have your clients. Expectations that the Web will be able to deliver e-CRM are extremely high, but many Web sites are barely usable, let alone optimized for each customer. Successfully managing customer relationships on the Web is harder than many have made it out to be. The industry has a lot of work to do to meet its promises.

  • Privacy. Things have quieted down somewhat since DoubleClick backed away from its plans to merge its online data with offline Abacus data. But the industry’s privacy issues have not been sufficiently resolved.

    Most consumers don’t completely trust Web companies and shy away from offering information about themselves. Companies that collect data responsibly are exposed to misguided regulation that spammers and scammers invite. Sound policy, adopted industrywide, is imperative.

  • Traditional advertising dollars. The discrepancy between the amount of time people spend online and the amount top advertisers spend there is enormous. According to a recent Morgan Stanley Dean Witter report, the top six advertisers spend less than one percent of their advertising dollars on the Web. With dot-com ad spending in decline, attracting traditional advertisers (mainly by addressing the four issues above) is the key to the industry’s growth.

A final note: Many of the members of the organization I addressed last week had over the past year found jobs in e-marketing and subsequently been laid off. Yet despite the lack of security, shifting organizational structures, inexperienced and chaotic management, and long, grueling hours, nobody wanted to return to traditional marketing. There is just too much opportunity in e-marketing to ever want to go back.

Yes, the potential is there. But there is also a lot of work to be done.

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