The Big Shift in Advertising

Engage the customers you want with interactive marketing

by Bill Koch, Content Editor, definingINSIGHTS

There was a time when “advertising” your website meant calling up your friends and giving them an endless string of letters and symbols that detailed your site’s HTTP address. For your really hip friends, you could drop them an email with a link. For your really, really hip friends, you could ask them to add a link to their website.

But that was back when most websites were either vanity sites detailing your dog’s life-altering trip through the giant Redwoods or a simple “brochure” of your business products. No commerce, no auctions—only primitive reporting to know who visited your site.

In our hurly-burly web-centric world, online advertising has become a vital part of any savvy company’s marketing portfolio. The myriad ways of calling attention to your company can be in the form of emails, web content and banner ads. Now there’s another savvy way to target your customers and get more information about them. The smart money spent on online advertising is now in interactive marketing.

Engage consumers with interactive marketing

Most likely, you’ve already seen great examples of interactive marketing. Pepsi and the movie, The Polar Express, teamed up to create games based on the film that popped up on Yahoo’s home page. Yahoo also features “skins” that can be added to its wildly popular Instant Messaging (IM) feature. For example, a skin based on SHREK 2 featured graphics from the movie that surrounded the IM environment, special “emoticons” of SHREK character faces and even classy audio from the movie (like burps) that you could add to your messages.

Chris Thornton, director of e-marketing at Definition 6, says this type of marketing is much more than just a way to dazzle consumers. “It’s an entirely new way to engage them and deepen brand loyalty,” Thornton says. “It’s also very viral. If one person likes the campaign, he or she can easily send it to a friend. This message—coming from a friend—has much more credence than just another ad being hurled at them.”

By its very nature, consumers spend more time with your brand when they encounter an interactive ad. “They see all aspects of the brand and possibly related products,” Thornton points out. In the SHREK example, the SHREK 2 IM skin reminds them of all the film’s characters and even some lines of dialogue. This keeps the movie fresh in the consumer’s mind, possibly spurring a second trip to the movie theater or boosting DVD sales.

Pay attention to the man behind the curtain

Behind the scenes, Thornton says if you receive an interactive marketing message, most likely, you were highly targeted to receive that particular message. “The real beauty of interactive marketing is not just how consumers respond, but how specifically you can target your message to the audience you want to reach.”

In broadcast media advertising, companies try to target their audience based on who they think might be watching a particular program. Thornton says, “You can place an ad for laundry detergent during a soap opera, hoping to hit a female demographic who buys household products, but you have no idea how engaged that viewer is with the ad. For all you know, she’s left the room during your ad.”

Josh Perlstein, executive vice president of Response Media, expands on this idea. “Online marketing gives you a depth of communication that is just not possible with broadcast or print advertising. When a consumer sees an ad online, there’s an opportunity to follow a link and get more information about your product. This can be pages of information about all your brands, not just a 30-second TV ad or a one-page print ad.”

By its voluntary nature, Perlstein also says online marketing builds more trust with consumers. “When consumers makes a conscious choice to click on a link, they are giving you permission to share more information about your products. In a subtle way, you gain trust with the consumer by bridging this ‘permission gap.’ It’s very different from the way consumers are bombarded with ads on TV, radio, on the sides of buses, almost everywhere.”

It is this bombardment of ad messages that often sends consumers online. “In the privacy of your own home, on your own time, you can learn more about a product if you do it online,” Perlstein says.

With consumers fast-forwarding through TV ads with the help of TiVO and DVRs, then skipping radio ads altogether with the help of satellite radio, Perlstein says online marketing is one way to still get consumers interested in your products. “Studies have shown that consumers only have so much ‘mental bandwidth.’ They only want to hear from about 8 -12 brands. With other forms of media, consumers are opting out of ads. With online marketing, they are making a voluntary choice to opt in.”

Like broadcast media, the web is a voluntary medium. “When you’re online, you go to a particular site because you choose to go there,” Thornton says. “An interactive marketing campaign takes advantage of this fact by targeting its message—and even the specific interactions—and drilling down to a very specific demographic.” With enough historical data from the website itself, you can target an extremely specific audience. “It’s now possible to have your online ad appear only to women ages 18 to 34 who make over $50,000 a year, live in the Northeast and have a college degree.”

Take advantage of more time spent online

What changed on the consumer side that allowed interactive marketing to take hold? “The rapid expansion of DSL and cable modems have made interactive marketing possible in more homes and businesses,” Thornton says. “Pushing out a large amount of graphics and interaction becomes less of a worry every year as data transfer speeds continue to climb.”

Plus, consumers are simply spending more time online. Think of how many more things you do online now than even two years ago. Thornton says, “Many more people do their banking online. They buy gifts online. They order groceries online. These are all opportunities to sell that weren’t there just a few years ago.”

Julie Saxon, national accounts director for Yahoo!, concurs. “The indisputable fact is that more people are spending more time—and money—online each year. It’s an upward spiral with no end in sight,” Saxon says.

Yahoo’s own statistics prove Saxon’s point. “Over 237 million Americans will be online by 2007,” Saxon states. “153 million were online last month. 39% of Internet users go online every day.

“Most importantly, for companies who want to advertise online,” Saxon continues, “is the fact that 53 million people—that’s 25% of all Americans—spent over $200 in online purchases last year.”

Returning to Chris Thorton’s point about the expansion of broadband access, Saxon says broadband connections now reach 63 million American homes. “The growth of that technology means that we can continually push out more graphic intensive interactive marketing, which naturally grabs the attention of more consumers.”

Thornton warns not to completely discount other forms of advertising. “Of course, you can’t build an entire campaign just on interactive online marketing. It’s always part of a bigger mix.” But what online marketing does best is take advantage of the market fragmentation inherent in the online experience. Thornton explains, “TV and radio only find customers and get the message out. Online advertising finds customers when they are ready for more information or even ready to buy your product.”

On the client side, the ability to instantly track the success of your campaign is a huge motivator to shift more resources into online marketing. Thornton says, “Rather than doing a recap six months after a campaign and assembling focus groups, with interactive online marketing, you know instantly how well your campaign is grabbing consumers.”

Josh Perlstein adds, “With interactive online marketing, you can improve the performance of a campaign almost instantly. There are three factors that determine the success of any campaign—the creative aspect, the audience and the product offer. It’s very simple to change any of these factors with an online campaign.”

If a TV campaign is failing, think of how difficult it would be to re-shoot the commercial, buy new ad time or even change the graphics or voice-over to change the offer. “With an online campaign,” Perlstein continues, “these factors have been adjusted quickly for successful campaigns.”

Having this knowledge during a campaign allows you to quickly try new tactics or target different consumers. These reporting mechanisms also transfer easily from one campaign to another. Thornton adds, “You don’t have to re-invent the evaluation tool with every campaign.”

Cross-promote other brands online

Thornton points to Georgia Pacific as a good model for an effective use of interactive marketing. Georgia Pacific produces consumer paper products such as Quilted Northern Toilet Paper, Brawny Paper Towels and Vanity Fair Paper Napkins. Not the sexiest products on the planet, they are things people need and purchase regularly.

Thornton says, “We worked with Georgia Pacific to create interactive marketing that always led consumers to a ‘cohort’ site.” The cohort site contained coupons, lifestyle information and household tips to engage the consumer. Says Thornton, “Just by spending time on the site, they spent more time with the brand. It’s a subtle way to build loyalty, but a very effective one.”

Once you have the consumer engaged on one cohort site, it’s very easy to cross-promote other brands. Thornton says, “If a consumer was interested in getting coupons for Brawny, we made sure they also got coupons for Quilted Northern, and vice versa. If they were happy with Brawny, they might try Quilted Northern after hearing about it.” If nothing else, consumers were exposed to the existence of the different brands.

On the back end, Georgia Pacific learned a great deal about the spending habits of its customers. They received very specific demographic information about when and why certain types of customers bought specific products. Thornton says, “This information will make their next interactive campaign much more effective.”

What about hard, cold numbers? In one year, over one million Georgia Pacific consumers provided data on themselves and requested future marketing materials. During that same year, millions of consumers interacted with the Georgia Pacific sites and thus spent more time with their brands. Thornton explains the benefits of interactive marketing, “We now have firmly engaged those one million consumers for future promotions and gained loyalty from millions of others.”

Consider shifting your ad dollars

While the web is a voluntary experience, it shouldn’t be a boring one. Fun and interesting information can grab the attention of even the most jaded web viewer, but it’s still the message that will capture their imagination—and money. “Your big strategy should be to build a portfolio of brands and create interactive media for each brand,” Thornton advises.

By adding interactive marketing to your advertising mix, you can pinpoint consumers in new ways. You can build brand loyalty during one campaign and obtain valuable data for your next campaign. You can also tweak a campaign while it’s still running. Most importantly, by making your advertising interactive, consumers become actively engaged with your product and message for a longer period of time. Just be sure to use those burp noises judiciously.